DEBTOR-IN-POSSESSION
CREDIT AGREEMENT
among
XXXXX XXXXXX CORPORATION,
a Debtor-in-Possession
The Lenders
Party Hereto
and
CHEMICAL BANK,
as Agent
Dated as of July 10, 1995
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . 20
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS. . . . . . . . . . 20
2.1 Revolving Credit Commitments. . . . . . . . . . . . . 20
2.2 Revolving Credit Notes. . . . . . . . . . . . . . . . 21
2.3 Procedure for Revolving Credit Borrowing. . . . . . . 21
2.4 Commitment Fee; Collateral Monitoring Fees. . . . . . 21
2.5 Termination or Reduction of Commitments . . . . . . . 22
2.6 Optional Prepayments; Mandatory Prepayments . . . . . 22
2.7 Interest Rates and Payment Dates. . . . . . . . . . . 24
2.8 Computation of Interest and Fees. . . . . . . . . . . 24
2.9 Pro Rata Treatment and Payments . . . . . . . . . . . 24
2.10 Requirements of Law. . . . . . . . . . . . . . . . . 25
2.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 25
2.12 L/C Commitment.. . . . . . . . . . . . . . . . . . . 27
2.13 Procedure for Issuance of Letters of Credit. . . . . 28
2.14 Fees, Commissions and Other Charges. . . . . . . . . 28
2.15 L/C Participations.. . . . . . . . . . . . . . . . . 29
2.16 Reimbursement Obligation of the Borrower.. . . . . . 30
2.17 Obligations Absolute.. . . . . . . . . . . . . . . . 31
2.18 Letter of Credit Payments. . . . . . . . . . . . . . 31
2.19 Application. . . . . . . . . . . . . . . . . . . . . 31
2.20 Increased Costs. . . . . . . . . . . . . . . . . . . 32
2.21 Further Assurances . . . . . . . . . . . . . . . . . 32
2.22 Nature of Obligations; Indemnities . . . . . . . . . 32
2.23 Superpriority of Obligations . . . . . . . . . . . . 34
2.24 Payments of Prior Indebtedness . . . . . . . . . . . 35
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 35
3.1 Financial Condition . . . . . . . . . . . . . . . . . 35
3.2 No Change . . . . . . . . . . . . . . . . . . . . . . 36
3.3 Corporate Existence; Compliance with Law. . . . . . . 36
3.4 Corporate Power; Authorization; Enforceable
Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.5 No Legal Bar. . . . . . . . . . . . . . . . . . . . . 37
3.6 No Material Litigation. . . . . . . . . . . . . . . . 37
3.7 No Default. . . . . . . . . . . . . . . . . . . . . . 37
3.8 Ownership of Property; Liens. . . . . . . . . . . . . 37
3.9 Intellectual Property . . . . . . . . . . . . . . . . 37
3.10 No Burdensome Restrictions . . . . . . . . . . . . . 38
3.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 38
3.12 Federal Regulations. . . . . . . . . . . . . . . . . 38
3.13 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 38
3.14 Investment Company Act; Other Regulations. . . . . . 39
3.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . 39
3.16 Purpose of Loans . . . . . . . . . . . . . . . . . . 39
3.17 Accuracy and Completeness of Information . . . . . . 39
3.18 Collateral Documents . . . . . . . . . . . . . . . . 39
3.19 Environmental Matters. . . . . . . . . . . . . . . . 40
3.20 Prior Agreement. . . . . . . . . . . . . . . . . . . 41
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . 41
4.1 Conditions to Initial Extension of Credit . . . . . . 41
4.2 Conditions to Each Extension of Credit. . . . . . . . 45
SECTION 5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . 46
5.1 Financial Statements. . . . . . . . . . . . . . . . . 46
5.2 Certificates; Other Information . . . . . . . . . . . 47
5.3 Business Plans. . . . . . . . . . . . . . . . . . . . 48
5.4 Payment of Obligations. . . . . . . . . . . . . . . . 48
5.5 Conduct of Business and Maintenance of Existence. . . 48
5.6 Maintenance of Quality Control Procedures . . . . . . 48
5.7 Maintenance of Property; Insurance. . . . . . . . . . 48
5.8 Inspection of Property; Books and Records;
Discussions. . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.9 Notices . . . . . . . . . . . . . . . . . . . . . . . 49
5.10 Environmental Laws . . . . . . . . . . . . . . . . . 50
5.11 Maintenance of Liens of the Collateral Documents.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.12 Further Assurances; Intellectual Property. . . . . 50
5.13 Cash Management System. . . . . . . . . . . . . . 51
5.14 Payment of Rent Obligations. . . . . . . . . . . . . 51
5.15 Payment of Certain Prior Indebtedness. . . . . . . . 52
5.16 Certain Post-Closing Matters . . . . . . . . . . . . 52
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . 52
6.1 Financial Condition Covenants . . . . . . . . . . . . 53
6.2 Limitation on Indebtedness. . . . . . . . . . . . . . 54
6.3 Limitation on Liens . . . . . . . . . . . . . . . . . 54
6.4 Limitation on Guarantee Obligations . . . . . . . . . 55
6.5 Limitation on Fundamental Changes . . . . . . . . . . 56
6.6 Limitation on Sale of Assets. . . . . . . . . . . . . 56
6.7 Limitation on Dividends . . . . . . . . . . . . . . . 57
6.8 Limitation on Capital Expenditures. . . . . . . . . . 57
6.9 Limitation on Investments, Loans and Advances . . . . 57
6.10 Limitation on Transactions with Affiliates . . . . . 58
6.11 Limitation on Sales and Leasebacks . . . . . . . . . 58
6.12 Limitation on Changes in Fiscal Year . . . . . . . . 58
6.13 Limitation on Lines of Business. . . . . . . . . . . 58
6.14 Limitation on Negative Pledge Clauses. . . . . . . . 58
6.15 Chapter 11 Claims. . . . . . . . . . . . . . . . . . 58
SECTION 7. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . 59
SECTION 8. THE AGENT. . . . . . . . . . . . . . . . . . . . . 62
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . 62
8.2 Delegation of Duties. . . . . . . . . . . . . . . . . 63
8.3 Exculpatory Provisions. . . . . . . . . . . . . . . . 63
8.4 Reliance by Agent . . . . . . . . . . . . . . . . . . 63
8.5 Notice of Default . . . . . . . . . . . . . . . . . . 64
8.6 Non-Reliance on Agent and Other Lenders . . . . . . . 64
8.7 Indemnification . . . . . . . . . . . . . . . . . . . 64
8.8 Agent in Its Individual Capacity. . . . . . . . . . . 65
8.9 Successor Agent . . . . . . . . . . . . . . . . . . . 65
SECTION 9. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . 66
9.1 Amendments and Waivers. . . . . . . . . . . . . . . . 66
9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . 66
9.3 No Waiver; Cumulative Remedies. . . . . . . . . . . . 68
9.4 Survival of Representations and Warranties. . . . . . 68
9.5 Payment of Expenses and Taxes . . . . . . . . . . . . 68
9.6 Successors and Assigns; Participations and
Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.7 Adjustments; Set-off. . . . . . . . . . . . . . . . . 71
9.8 Counterparts. . . . . . . . . . . . . . . . . . . . . 72
9.9 Severability. . . . . . . . . . . . . . . . . . . . . 72
9.10 Integration. . . . . . . . . . . . . . . . . . . . . 72
9.11 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . 72
9.12 Acknowledgements . . . . . . . . . . . . . . . . . . 73
9.13 WAIVERS OF JURY TRIAL. . . . . . . . . . . . . . . . 73
9.14 Parties Including Trustees; Court Proceedings. . . . 73
SCHEDULES
Schedule 1.1 Commitments
Schedule 2.12 Existing Letters of Credit
Schedule 3.9 Certain Intellectual Property Matters
Schedule 3.15 Subsidiaries
Schedule 3.19 Certain Environmental Matters
Schedule 6.2 Existing Indebtedness
Schedule 6.3 Existing Liens
Schedule 6.4 Existing Guarantee Obligations
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Legal Opinion
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Borrowing Certificate
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Form of Security Agreement
Exhibit G - Form of Collateral Monitoring Reporting
Requirements
Exhibit H - Form of Interim Borrowing Order
Exhibit I - Form of Final Borrowing Order
Exhibit J - Form of Subsidiary Guaranty
Exhibit K - Form of Borrower Pledge Agreement
Exhibit L - Form of Guarantor Pledge Agreement
Exhibit M - Form of Compliance Certificate
This DEBTOR-IN-POSSESSION CREDIT AGREEMENT is dated as
of July 10, 1995, and entered into by and among XXXXX CORONA
CORPORATION, a Delaware corporation, as debtor and debtor-in-possession
(the "Borrower"), the several banks and other financial
institutions from time to time parties to this Agreement (the
"Lenders") and CHEMICAL BANK, a New York banking corporation, as
agent for the Lenders hereunder (in such capacity, the ``Agent'').
INTRODUCTORY STATEMENT
WHEREAS, on July 5, 1995, the Borrower filed a
voluntary petition for relief under the Bankruptcy Code (as
hereinafter defined), with the United States Court for the District
of Delaware, (the "Court") (such proceedings, Case No. 95-788HSB,
are hereinafter referred to as the "Chapter 11 Case"). The
Borrower continues to operate its business and manage its
properties as a debtor in possession pursuant to Sections 1107 and
1108 of the Bankruptcy Code.
WHEREAS, the Borrower has requested the Lenders to
provide, subject to the terms and conditions contained herein, a
revolving credit facility (including letters of credit) of up to
$24,000,000 (including a letter of credit subfacility of
$5,000,000) to fund working capital, issue letters of credit, repay
and terminate the Existing Credit Facilities (as hereinafter
defined) and make certain other payments during the Chapter 11
Case, all as set forth herein, and the Lenders are willing to
extend such postpetition credit to the Borrower in accordance with
and on the terms and conditions set forth herein; and
WHEREAS, the Borrower and Guarantors desire to secure
their respective obligations hereunder and under the other Loan
Documents by granting to the Agent, on behalf of Lenders, a first
or second priority (as the case may be) security interest in
substantially all of their assets as set forth in the Pledge and
Security Agreement and other Collateral Documents.
NOW, THEREFORE, the parties hereto agree that,
effective as of the Effective Date, the Prior Agreement shall be
amended and restated 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 in effect on such day plus 1% or (c) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. For purposes
hereof: "Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Agent as its prime rate
in effect at its principal office in New York City (the Prime Rate
not being intended to be the lowest rate of interest charged by
Chemical Bank in connection with extensions of credit to its
customers); "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 Agent from three New York
City negotiable certificate of deposit dealers of recognized
standing selected by it; and "Federal Funds Effective Rate" shall
mean, for any day, the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Agent from three federal funds brokers
of recognized standing selected by it. If for any reason the Agent
shall have determined (which determination shall be conclusive
absent manifest error) that it is unable to ascertain the Base CD
Rate or the Federal Funds Effective Rate, or both, for any reason,
including the inability or failure of the Agent to obtain
sufficient quotations in accordance with the terms thereof, the ABR
shall be determined without regard to clause (b) or (c), or both,
of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. 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.
"Account Debtor": each debtor, customer or obligor in
any way obligated on or in connection with any Account.
"Accounts": all "accounts" (as defined in the UCC).
"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 Extensions of Credit": as to
any Lender at any time, an amount equal to the sum of (a) the
aggregate principal amount of all Loans made by such Lender then
outstanding and (b) such Lender's Commitment Percentage of the L/C
Obligations then outstanding.
"Agreement": this Debtor-in-Possession Credit
Agreement, as amended, supplemented or otherwise modified from time
to time.
"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.
"Assignee": as defined in subsection 9.6(c).
"Available Commitment": as to any Lender at any time,
an amount equal to the excess, if any, of (a) the amount of such
Lender's Commitment over (b) such Lender's Aggregate Outstanding
Extensions of Credit.
"BAI": Bank of America Illinois, a bank organized
under the laws of the State of Illinois.
"Bankruptcy Code": Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any
successor statute.
"Borrower Pledge Agreement": that certain Pledge
Agreement dated as of the date hereof executed by the Borrower,
substantially in the form attached as Exhibit K hereto, as such
Pledge Agreement may be amended, supplemented or otherwise modified
from time to time.
"Borrowing Base": at any date of determination
thereof, an amount equal to (a) the sum of (i) 70% of Eligible
Accounts at such date, (ii) 40% of Eligible Inventory at such date,
(iii) 20% of Eligible Service Depot Inventory at such date,
provided that 20% of Eligible Service Depot Inventory may not
exceed $500,000, (iv) 40% of finished goods inventory in transit to
the United States, which is subject to the Agent's security
interest under the Security Agreement, from (I) the Borrower's
facility in Singapore, (II) Samsung Corporation, Korea, and (III)
such other third parties as may be designated by the Borrower from
time to time which are reasonably acceptable to the Agent at such
date, less the amount of (b) a reserve for ocean freight, customs
duty and other fees for inventory in transit from the Borrower's
facility in Singapore to the United States, calculated as 5% of the
dollar amount in transit from Singapore, net of intercompany profit
at such date.
"Borrowing Base Certificate": the Certificate of the
Borrower, substantially in the form of Exhibit E required to be
delivered pursuant to subsection 5.2(d).
"Borrowing Date": any Business Day specified in a
notice pursuant to subsection 2.3 as a date on which the Borrower
requests the Lenders to make Loans hereunder.
"Business": as defined in subsection 3.19.
"Business Day": a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized
or required by law to close.
"Business Plan": a business plan delivered to the
Lenders pursuant to subsection 5.3 that is approved in writing by
the Lenders on or prior to September 15, 1995 provided that it is
understood and agreed that (a) no Lender shall have any obligation
to approve such business plan and (b) the approval of any Lender
may be withheld or granted in the sole and absolute discretion of
such Lender without any liability to, or on the part of, any
Lender.
"Business Plan Event": the failure of Lenders to
approve in writing by September 15, 1995 the business plan
delivered by the Borrower to the Lenders pursuant to subsection
5.3; provided that it is understood and agreed that (a) no Lender
shall have any obligation to approve such business plan and (b) the
approval of any Lender may be withheld or granted in the sole and
absolute discretion of such Lender without any liability to, or on
the part of, any Lender.
"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.
"Carve-Out": as defined in subsection 2.23.
"Cash": money, currency or a credit balance in any
deposit account.
"C/D Assessment Rate": for any day as applied to any
ABR Loan, the net annual assessment rate (rounded upward to the
nearest 1/100th of 1%) determined by Chemical to be payable on such
day to the Federal Deposit Insurance Corporation or any successor
("FDIC") for FDIC's insuring time deposits made in Dollars at
offices of Chemical 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 of Governors of the
Federal Reserve System (or any successor) (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 having a maturity of 30
days or more.
"Change in Control": shall be deemed to have occurred
if (a) any person or group (within the meaning of Rule 13d-5 of the
Securities and Exchange Act of 1934 as in effect on the date
hereof) other than HNRC or any direct or indirect wholly owned
subsidiary of HNRC, shall own directly or indirectly, beneficially
or of record, shares representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding
capital stock of the Borrower; provided, however, that, at any time
that HNRC or any direct or indirect wholly owned subsidiary of HNRC
shall fail to own, directly and of record, shares representing at
least 35% of the aggregate ordinary voting power represented by the
issued and outstanding capital stock of the Borrower, a Change in
Control shall be deemed to have occurred if any person or group
other than HNRC or any direct or indirect subsidiary of HNRC shall
own, directly or indirectly, beneficially or of record, shares
representing more than 25% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the
Borrower; (b) a majority of the seats (other than vacant seats) on
the board of directors of the Borrower shall at any time have been
occupied by persons who were neither (i) nominated by the
management of the Borrower, nor (ii) appointed by directors so
nominated; or (c) any person or group (other than HNRC or any
wholly owned subsidiary of HNRC) shall otherwise directly or
indirectly control the Borrower; provided, however, that the sale
by HNRC of its shares shall not constitute a Change in Control
except pursuant to (a) above.
"Chapter 11 Case" has the meaning assigned to that term
in the introductory statement hereto.
"Chemical": Chemical Bank.
"Code": the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral Access Agreements": the agreements among
the Borrower and the landlord of each premises at which the
Borrower maintains Collateral, each of such agreements providing
for (i) access by the Lenders to the premises where the Collateral
is located and (ii) waivers by the landlords of landlord's liens on
the Collateral arising by operation of law existing or which may
come to exist.
"Collateral Documents": the Security Agreement, the
Borrower Pledge Agreement, the Guarantor Pledge Agreement, the
Subsidiary Guaranty and all other instruments or documents
(including without limitation the Mortgage) now or hereafter
granting Liens to Agent for the benefit of Agent and/or Lenders.
"Commitment": as to any Lender, the obligation of such
Lender to make Loans to, or issue or participate in Letters of
Credit for the account of, the Borrower hereunder in an aggregate
principal amount at any one time outstanding not to exceed the
amount set forth opposite such Lender's name on Schedule 1.1, as
such amount may be reduced from time to time in accordance with the
provisions of this Agreement.
"Commitment Percentage": as to any Lender at any time,
the percentage which such Lender's Commitment then constitutes of
the aggregate Commitments (or, at any time after the Commitments
shall have expired or terminated, the percentage which the
aggregate principal amount of such Lender's Aggregate Outstanding
Extensions of Credit constitutes of the aggregate principal amount
of the total Aggregate Outstanding Extensions of Credit).
"Commitment Period": the period from and including the
Effective Date to but not including the Termination Date or such
earlier date on which the Commitments shall terminate as provided
herein.
"Commonly Controlled Entity": an entity, whether or
not incorporated, which is under common control with the Borrower
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 of the Code.
"Contractual Obligation": as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such Person is
a party or by which it or any of its property is bound.
"Cortland Distribution Property": the real property of
the Borrower that is the subject of the X.X. Xxxxxx Contract.
"Cortland Warehouse Property": the real property of
the Borrower located in Cortland, New York that is not the subject
of the X.X. Xxxxxx Contract.
"Court" shall have the meaning assigned to it in the
introductory statement hereto.
"Credit Party": the Borrower and any Subsidiary of the
Borrower that is or becomes a party to a Loan Document.
"Default": any of the events specified in Section 7,
whether or not any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
"Defective Stock": laminators (LX2000, LX900, LX400,
and LX800), address writers (also referred to as envelope
printers), and handifaxes, and other products determined to be
defective in the reasonable judgment of the Agent.
"Dollars" and "$": dollars in lawful currency of the
United States of America.
"Effective Date": the date on which the conditions
precedent set forth in subsection 4.1 shall be satisfied.
"Eligible Accounts": at the time of any determination
thereof, all Accounts of the Borrower which meet the following
criteria at the time of creation and continue to meet such criteria
at all times relevant to such determination, and which are and
which continue to be acceptable to the Agent in all respects.
Standards of eligibility may be fixed and revised from time to time
solely by the Agent in its exclusive reasonable judgment. The
following requirements shall apply in determining whether a
particular Account constitutes an Eligible Account:
(a) such Account is evidenced by an invoice and has
arisen from the sale of goods which have been shipped or delivered
to an Account Debtor on an absolute sale basis, have not been
shipped or delivered on a consignment, approval, or sale-or-return
basis, and are not subject to any repurchase or return agreement or
arrangement, other than those repurchase or return agreements that
(i) arise in the ordinary course of the Borrower's business, and
(ii) are consistent with standard industry practices;
(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, and is not subject to any
material delivery, freight or financing charges, or late or other
fees, or set-offs, counterclaims, defenses, or disputes existing or
asserted with respect to such Account;
(c) the Account Debtor in respect of such Account
is not insolvent or the subject of any bankruptcy case or
insolvency proceeding of any kind, unless such Account is due from
such Account Debtor as an administrative claim under the Bankruptcy
Code and the Agent, in the exercise of its reasonable business
judgment, deems such Account Debtor to be creditworthy;
(d) the Account Debtor in respect of such Account
is located within the United States of America;
(e) the Account Debtor in respect of such Account
is not the United States of America or any state, territory,
subdivision, department or agency thereof, unless all applicable
requirements of the Assignment of Claims Act of 1940 have been met;
(f) such Account is at all times subject to the
Agent's duly perfected, first-priority Lien except for Liens
permitted by subsection 6.3;
(g) such Account does not arise out of transactions
with an employee, officer, agent, director, stockholder,
Subsidiary, or Affiliate of the Borrower;
(h) such Account is not later than sixty (60) days
after the due date stated on the invoice therefor, provided that
the aggregate Accounts of any Account Debtor with original due
dates more recent than 60 days prior to the date of determination
shall be reduced by the amount of net credit balances of such
Account Debtor the dates of which are earlier than 60 days prior to
such date of determination;
(i) for each of the ten Accounts with the highest
aggregate balances on the Borrower's accounts receivable aging
summary, the balance under clause (h) above (``not later than 60
days'clause) is less than 25% of the total face value of such
Account, and for each other Account, the aggregate balance under
clause (h) above is less than 50% of the total face value of such
Account;
(j) such Account has not been and is not required
to be charged off or written off as uncollectible in accordance
with the customary business practice of the Borrower;
(k) such Account does not arise out of any claim in
tort, is not evidenced by chattel paper, a promissory note, a
negotiable instrument, or any other instrument of any kind or, if
such Account is evidenced by chattel paper, a promissory note, a
negotiable instrument, or any other instrument, the Borrower has
delivered and properly endorsed such chattel paper, promissory
note, negotiable instrument or other instrument to the Agent, on
behalf of the Lenders;
(l) the amount of the face value of such Account
listed on any schedule of Accounts and shown on all invoices and
statements delivered to the Agent with respect to such Account is
not subject to any retainages or holdbacks of any type, is actually
and absolutely owing to such Borrower, and is not contingent for
any reason and has not been sold or discounted without recourse;
(m) such Account does not arise out of a cash on
delivery (COD) sale except to the extent that, in the ordinary
course of such Borrower's business, such Borrower has received
payment on such Account, but has not yet applied such payment to
such Account; or
(n) such Account does not arise out of the delivery
of samples or trial merchandise to customers of Account Debtors.
Such Accounts shall be reduced by the greater of (1) the value
of an allowance earned but not taken, or (2) the value of an
accrual for the estimated current liability, in both cases with
respect to advertising/preparation allowances, or "Key City"
allowances, volume and other rebate programs, and downward price
adjustments or price protection and transition programs
(collectively referred to as the "Programs"), where (1) and (2) are
calculated as follows: (1) the allowance earned but not taken with
respect to the Programs, equal to the general ledger provision for
the Programs (giving effect to adjustments for additions and/or
reversals) minus (I) credits issued (also referred to as payments)
to date and (II) total chargebacks requested by customers as
recorded on the Borrower's transaction code summary aging of
accounts report; and (2) the estimate of the current liability for
the Programs, equal to the one-month rolling average of the last
twelve months of credits issued (also referred to as payments) plus
chargebacks requested by customers as recorded in the current to 60
days past due aging categories on the Borrower's transaction code
summary aging of accounts report.
"Eligible Inventory": at any time of determination,
"inventory" (as defined in the UCC) shown on the most recent
schedule of Inventory delivered by the Borrower and meeting the
following requirements (which the Agent may, in its sole
discretion, revise from time to time):
(a) such Inventory consists of finished goods
Inventory owned by the Borrower and is not raw materials,
work-in-process or packing materials or supplies not related to the
Inventory;
(b) such Inventory is merchantable and is currently
salable in the normal course of such Borrower's business;
(c) such Inventory is either (i) located in the
United States and is on the premises listed on the schedule of
Inventory locations attached to the Security Agreement or (ii) in
transit to a location in the United States, provided that the
Borrower has taken all steps necessary for the Agent to perfect its
security interest in such in-transit Inventory, provided further
that with respect to any such Inventory located on leased property
the Borrower shall have delivered a Collateral Access Agreement
executed by the lessor of such property;
(d) such Inventory has not been consigned and does
not represent any goods sold pursuant to a ``xxxx and hold or
``sale or return'' arrangement, or is otherwise in-transit to third
parties;
(e) such Inventory is at all times subject to the
Agent's duly perfected, first-priority Lien except for Liens
permitted by subsection 6.3;
(f) such Inventory does not constitute
reconditioned product, service depot, rework, or discontinued (as
each such term is used in the inventory records of the Borrower
delivered to the Agent), or Defective Stock;
(g) such Inventory is net of intercompany profits;
and
(h) such Inventory is net of products using
electrical current of other than 110 volts.
``Eligible Service Depot Inventory'': an amount equal
to 70% of Service Depot Inventory, where 70% is an estimation of
such Inventory to be returned to Eligible Inventory. Standards of
eligibility may be revised from time to time solely by the Agent in
its exclusive reasonable judgment.
``Environmental Laws'': any and all foreign, Federal,
state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, requirements of any
Governmental Authority 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 now or may at any time hereafter be in effect.
``ERISA'': the Employee Retirement Income Security Act
of 1974, as amended from time to time.
``Event of Default'': any of the events specified in
Section 7, provided that any requirement for the giving of notice,
the lapse of time, or both, or any other condition, has been
satisfied.
``Existing Guarantees'': the Guarantee Obligations
outstanding on the Effective Date to the extent set forth on
Schedule 6.4 and, but only if, immediately after giving effect
thereto, no Default or Event of Default would exist.
``Existing Letters of Credit'': as defined in
subsection 2.12(a).
``Federal Funds Effective Rate'': means, for any
period, a fluctuating interest rate equal for each day during such
period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business
Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing
selected by the Agent.
``Final Borrowing Order'': an order of the Court
entered in the Chapter 11 Case after a final hearing under
Bankruptcy Rule 4001(c)(2) in the form attached as Exhibit I with
any modifications approved by Lenders in their sole discretion.
The Final Borrowing Order shall also contain a finding consistent
with the representation of Borrower set forth in subsection 3.5.
``Final Order'': an order, judgment or other decree of
the Court or any other court or judicial body with proper
jurisdiction, as the case may be, which has not been reversed,
stayed, modified or amended and to which (i) any right to appeal or
seek certiorari, review or rehearing has been waived or (ii) the
time to appeal or seek certiorari, review or rehearing has expired
and as to which no appeal or petition for certiorari, review or
rehearing is pending.
``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.
``GAAP'': generally accepted accounting principles in
the United States of America in effect from time to time.
``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.
``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 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 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 Pledge Agreement'': that certain Pledge
Agreement dated as of the date hereof executed by the Subsidiary
Guarantors party thereto, substantially in the form attached as
Exhibit L hereto, as such Pledge Agreement may be amended,
supplemented or otherwise modified from time to time.
``Hazardous Materials'': any hazardous materials,
hazardous wastes, hazardous constituents, hazardous or toxic
substances, petroleum products (including crude oil or any fraction
thereof), defined or regulated as such in or under any
Environmental Law.
``HNRC'': Xxxxxx Natural Resources Company, any entity
that owns 100% of the capital stock of Xxxxxx Natural Resources
Company or any wholly-owned Subsidiary of such entity.
``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 current 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
letters of credit or acceptances issued or created for the account
of such Person and (e) all liabilities 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.
``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
3.9.
``Interest Payment Date'': the last day of each
calendar month to occur while any Loan is outstanding.
``Interim Borrowing Order'': an order of the Court
entered in the Chapter 11 Case after an interim hearing under
Bankruptcy Rule 4001(e)(2) in the form attached as Exhibit H with
any modifications approved by Lenders in their sole discretion.
The Interim Borrowing Order shall also contain a finding consistent
with the representation of Borrower set forth in subsection 3.5.
``Issuing Lender'': (a) with respect to Letters of
Credit issued after the Effective Date, either Chemical or BAI and
(b) with respect to each of the Existing Letters of Credit and any
extension, amendment and renewal thereof, the bank listed as the
issuing bank of such Existing Letters of Credit on Schedule 2.12.
``Inventory'': all ``inventory'' (as defined in the
UCC).
``X.X. Xxxxxx Contract'': that certain purchase and
sale agreement by and between the X.X. Xxxxxx Center, Inc. and the
Borrower, as such agreement may be amended from time to time to
extend the date by which the sale of the property contemplated by
such agreement may be consummated.
``Letters of Credit'': as defined in subsection 2.12.
``L/C Commitment'': as defined in subsection 2.12.
``L/C Obligations'': at a particular time the sum of
(a) the undrawn and unexpired amount of the Letters of Credit and
(b) the aggregate amount of drawings under the Letters of Credit
which have not been reimbursed pursuant to subsection 2.16.
``L/C Participants'': the collective reference to all
the Lenders other than the Issuing Lender.
``Lien'': any mortgage, pledge, hypothecation,
assignment, 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'': any loan made by any Lender pursuant to this
Agreement.
``Loan Documents'': this Agreement, the Collateral
Documents, the Notes and any Application.
``Material Adverse Effect'': a material adverse effect
on (a) the business, operations, property or condition (financial
or otherwise) of the Borrower and its Subsidiaries taken as a whole
or (b) the validity or enforceability of this Agreement, any of the
Notes or any of the other Loan Documents or the rights or remedies
of the Agent or the Lenders hereunder or thereunder.
``Materials of Environmental Concern'': any gasoline
or petroleum (including crude oil or any fraction thereof) or
petroleum products or any hazardous or toxic substances, materials
or wastes, defined or regulated as such in or under any
Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
``Maximum Available Credit'': as at any date of
determination, the remainder of (a) the lesser of (i) the sum of
the Borrowing Base and the Permitted Overadvance Amount or (ii) the
aggregate amount of the Commitments as reduced from time to time in
accordance with this Agreement minus (b) if the Borrower rejects or
moves to reject any lease of real property on which Inventory is,
at any time located, unless the Lenders have received a Collateral
Access Agreement in form and substance satisfactory to the Lenders
with respect to such property, an amount equal to the sum of (i)
the maximum amount of the claim asserted or that could be asserted
by the applicable lessor in the Chapter 11 Case as a result of such
rejection and (ii) all accrued and unpaid obligations owed by the
Borrower to such lessor, including without limitation all
obligations owed with respect to any period prior to the Petition
Date.
``Mortgage'': as defined in subsection 4.1(n).
``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 sale of
assets, an amount equal to the gross cash proceeds (including cash
payments when and as received on any note or instrument received as
part of the consideration of such asset sale) net of the following
amounts (but only to the extent such amounts are paid or incurred
by the Borrower or any Subsidiary): (i) reasonable attorneys' fees,
accountants' fees, brokerage, consultant and other customary fees
and other reasonable fees and expenses actually incurred in
connection with such asset sale, (ii) taxes paid or reasonably
estimated to be payable as a result thereof, after taking into
account all available deductions and credits in connection with
such asset sale, (iii) appropriate amounts to be provided by the
Borrower or any of its Subsidiaries as a reserve, in accordance
with GAAP, against any liabilities associated with such asset sale
and retained by the Borrower or such Subsidiary, as the case may
be, after such asset sale, (iv) in the case of an asset sale
involving an asset subject to a Lien securing any Indebtedness
permitted hereunder, payments required to be made to repay such
Indebtedness, including payments and penalties and (v) in the case
of a sale of the Singapore Property or any property of the Borrower
and its Subsidiaries located in Mexico, Canada or Germany, expenses
related to employee termination, severance and other wind-down
expenses, which expenses are necessary to consummate the asset sale
and remit the proceeds to the Borrower.
``Non-Excluded Taxes'': as defined in subsection 2.11.
``Notes'': the collective reference to the Revolving
Credit Notes.
``Obligations'': all obligations of every nature of the
Borrower and the other Credit Parties from time to time owed to the
Agent, Lenders or any of them under the Loan Documents, whether for
principal, interest, reimbursement of amounts drawn under Letters
of Credit, fees, expenses, indemnification or otherwise.
``Participant'': as defined in subsection 9.6(b).
``PBGC'': the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
``Permitted Investments'': (a) direct obligations of,
or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the
full faith and credit of the United States of America), in each
case maturing within 270 days from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from Standard &
Poor's Ratings Group or from Xxxxx'x Investors Service, Inc.; (c)
investments in certificates of deposit, banker's acceptances and
time deposits maturing within 270 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any Lender, or any domestic
office of any commercial bank organized under the laws of the
United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than
$500,000,000 and whose short-term debt is rated A-1 or better by
Standard & Poor's Ratings Group or P-1 by Moody's Investor's
Service, Inc., or similarly rated by any successor to either of
such rating services; and (d) other investment instruments
approved in writing by the Required Lenders and offered by
financial institutions which have a combined capital and surplus
and undivided profits of not less than $500,000,000.
``Permitted Overadvance Amount'': the remainder of (a)
the lesser of (i) $10,000,000 and (ii) $25,000,000 minus the
Borrowing Base as of the last day of fiscal month June 1995 minus
(b) the aggregate amount of reductions in such amount in accordance
with subsection 2.6(c); provided that in no event shall the
Permitted Overadvance Amount be less than zero.
``Person'': an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity
of whatever nature.
``Petition Date'': July 5, 1995.
``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 (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be
deemed to be) an ``employer'' as defined in Section 3(5) of ERISA.
``Prepetition Indebtedness'': Indebtedness of Borrower
outstanding on the Petition Date.
``Prior Agreement'': that certain Amended and Restated
Revolving Credit Agreement dated as of April 7, 1995 by and among
Xxxxx Xxxxxx Corporation, the Lenders and the Agent, and that
certain Security Agreement dated as of April 7, 1995 by and between
Xxxxx Corona Corporation and the Agent as each such agreement has
been amended, supplemented or otherwise modified to the date
hereof, including without limitation as supplemented by that
certain letter agreement dated as of June 16, 1995.
``Prior Indebtedness'': all obligations outstanding
under the Prior Agreement.
``Properties'': as defined in subsection 3.19(a).
``Register'': as defined in subsection 9.6(d).
``Regulation U'': Regulation U of the Board of
Governors of the Federal Reserve System as in effect from time to
time.
``Reimbursement Obligation'': the obligation of the
Borrower to reimburse the Issuing Lender pursuant to subsection
2.16.
``Reorganization'': with respect to any Multiemployer
Plan, the condition that such plan is in reorganization within the
meaning of Section 4241 of ERISA.
``Reports'': the Borrower's Annual Report on Form 10-K
for the fiscal year ended June 30, 1994 and any other document that
has been both (a) filed subsequent to June 30, 1994 under the
Securities Exchange Act of 1934, as amended, in the form (including
exhibits) filed with the Securities and Exchange Commission and (b)
delivered to the Agent.
``Reportable Event'': any of the events set forth in
Section 4043(b) of ERISA, other than those events as to which the
thirty day notice period is waived under subsections .13, .14, .16,
.18, .19 or .20 of PBGC Reg. SS 2615.
``Required Lenders'': at any time, Lenders the
Commitment Percentages of which aggregate 100%.
``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, 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 property or to which such Person or any
of its property is subject.
``Responsible Officer'': the chief executive officer
or the president of the Borrower or, with respect to financial
matters, the chief financial officer, treasurer, vice president -
finance or controller of the Borrower.
``Revolving Credit Loans'': as defined in subsection
2.1.
``Revolving Credit Note'': as defined in subsection
2.2.
``SCC Singapore'': Xxxxx Xxxxxx Private Ltd., a
corporation organized under the laws of the Republic of
Singapore.
``SCC UK'': Xxxxx Corona (United Kingdom) Limited, a
corporation organized under the laws of the United Kingdom.
``Security Agreement'': the Security Agreement, dated
as of the date hereof, between the Borrower and the Agent, as the
same may from time to time be amended, modified or supplemented.
``Service Depot Inventory'': the Inventory currently
described by the Borrower in its books and records as ``department
390 inventory''.
``Single Employer Plan'': any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
``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 the Borrower.
``Subsidiary Guarantors'': the Subsidiaries of the
Borrower named as guarantors on Schedule 3.15 and any other
Subsidiary of the Borrower that becomes a party to the Subsidiary
Guaranty.
``Termination Date'': the earliest to occur of: (i)
June 30, 1996; (ii) the date the Lenders elect to terminate the
Commitments pursuant to Section 7; (iii) the date of prepayment in
full by the Borrower of the Loans and all other amounts owed under
this Agreement (including without limitation the L/C Obligations)
and termination of the Commitments in accordance with the
provisions of Section 2.5; (iv) August 2, if the Final Borrowing
Order has not been entered by the Court by such date and (v) if a
Business Plan Event has occurred, November 15, 1995.
``Transferee'': as defined in subsection 9.6(f).
``UCC'': shall mean the Uniform Commercial Code as
from time to time in effect in the State of New York.
``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.
1.2 Other Definitional Provisions. (a) Unless
otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in the Notes or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in the Notes, and any
certificate or other document made or delivered pursuant hereto,
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. Subject to the
terms and conditions hereof, each Lender severally agrees to make
revolving credit loans (``Revolving Credit Loans'') to the Borrower
from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding which, when added to
such Lender's Commitment Percentage of the then outstanding L/C
Obligations, does not exceed the lesser of (i) the amount of such
Lender's Commitment and (ii) such Lender's Commitment Percentage
multiplied by the Maximum Available Credit in effect at such time.
During the Commitment Period, the Borrower may use the Commitments
by borrowing, prepaying the Revolving Credit Loans in whole or in
part, and reborrowing, all in accordance with the terms and
conditions hereof.
2.2 Revolving Credit Notes. The Revolving Credit
Loans made by each Lender shall be evidenced by a promissory note
of the Borrower, substantially in the form of Exhibit A, with
appropriate insertions as to payee, date and principal amount (a
``Revolving Credit Note''), payable to the order of such Lender and
in a principal amount equal to the lesser of (a) the amount of the
initial Commitment of such Lender and (b) the aggregate unpaid
principal amount of all Revolving Credit Loans made by such Lender.
Each Lender is hereby authorized to record the date and amount of
each Revolving Credit Loan made by such Lender, the date and
amount of each payment or prepayment of principal thereof on the
schedule annexed to and constituting a part of its Revolving Credit
Note, and any such recordation shall constitute prima facie
evidence of the accuracy of the information so recorded; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect the rights of such Lender or the
Borrower's obligations in respect of the applicable Revolving
Credit Loans . 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 2.7.
2.3 Procedure for Revolving Credit Borrowing. The
Borrower may borrow under the Commitments during the Commitment
Period on any Business Day, provided that the Borrower shall give
the Agent irrevocable notice (which notice (x) must be received by
the Agent prior to 10:00 A.M., New York City time, on the requested
Borrowing Date and (y) may be given to the Agent telephonically and
confirmed via facsimile by the Borrower), specifying (i) the amount
to be borrowed and (ii) the requested Borrowing Date. Each
borrowing under the Commitments shall be in an amount equal to
$100,000 or a whole multiple thereof (or, if the then Available
Commitments are less than $100,000, such lesser amount). Upon
receipt of any such notice from the Borrower, the Agent shall
promptly notify each Lender thereof. Each Lender will make the
amount of its pro rata share of each borrowing available to the
Agent for the account of the Borrower at the office of the Agent
specified in subsection 9.2 prior to 12:00 Noon, New York City
time, on the Borrowing Date requested by the Borrower in funds
immediately available to the Agent. Such borrowing will then be
made available to the Borrower by the Agent crediting the account
of the Borrower on the books of the Agent with the aggregate of the
amounts made available to the Agent by the Lenders and in like
funds as received by the Agent.
2.4 Commitment Fee; Collateral Monitoring Fees. (a)
The Borrower agrees to pay to the Agent for the account of each
Lender a commitment fee for the period from and including the first
day of the Commitment Period to the Termination Date equal to the
average of the daily excess of the aggregate amount of the
Commitments over the aggregate principal amount of Loans
outstanding multiplied by 1/2 of 1% per annum, payable quarterly
in arrears on the last day of each March, June, September and
December and on the Termination Date or such earlier date on which
the Commitments shall terminate as provided herein, commencing on
the first of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Agent, for its
own account, a non-refundable collateral monitoring fee equal to
$2,800 per month, payable quarterly in advance on the last day of
each March, June, September and December.
2.5 Termination or Reduction of Commitments. The
Borrower shall have the right, upon not less than five Business
Days' notice to the Agent, to terminate the Commitments or, from
time to time, to reduce the amount of the Commitments, provided
that no such termination or reduction shall be permitted if, after
giving effect thereto and to any prepayments of the Loans made on
the effective date thereof, the then outstanding principal amount
of the Loans, when added to the then outstanding L/C Obligations,
would exceed the amount of the Commitments then in effect. Any
such reduction shall be in an amount equal to $100,000 or a whole
multiple thereof and shall reduce permanently the Commitments then
in effect.
2.6 Optional Prepayments; Mandatory Prepayments. (a)
The Borrower may, at any time and from time to time, prepay the
Loans, in whole or in part, without premium or penalty, upon at
least three Business Days' irrevocable notice to the Agent,
specifying the date and amount of prepayment. Upon receipt of any
such notice the Agent shall promptly notify each 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 any amounts payable pursuant to subsection 2.16.
(b) In the event that any Borrowing Base Certificate
delivered pursuant to subsection 5.2(d) shall indicate that, as of
the date thereof, the amount of the Aggregate Outstanding
Extensions of Credit of all Lenders then outstanding exceeds the
amount of the Maximum Available Credit then, without notice or
demand, the Borrower shall, on the date of such certificate, make
a mandatory prepayment of the Loans in an amount equal to such
excess.
(c) If the Borrower or any Subsidiary shall receive
any Net Cash Proceeds from any sale of assets (other than the sale
of Inventory in the ordinary course of business), the Borrower
(i) may, as long as no Default has occurred and is
continuing, retain the first $2,000,000 of such Net Cash Proceeds
as assets of the Borrower;
(ii) (a) shall use 50% of the next $3,000,000 of such Net
Cash Proceeds to prepay the Loans and the L/C Obligations (provided
that each such prepayment shall be accompanied by automatic
permanent reductions of the Commitments and the Permitted
Overadvance Amount, each in the amount of such prepayment) and (b)
may, as long as no Default has occurred and is continuing, retain
the remaining 50% of such Net Cash Proceeds as assets of the
Borrower; and
(iii) (a) thereafter, shall use 80% of all other Net Cash
Proceeds to prepay the Loans and the L/C Obligations (provided that
each such prepayment shall be accompanied by automatic permanent
reductions of the Commitments and the Permitted Overadvance Amount,
each in the amount of such prepayment) and (b) may, as long as no
Default has occurred and is continuing, retain the remaining 20% of
such Net Cash Proceeds as assets of the Borrower;
provided that if a Default has occurred and is continuing, all Net
Cash Proceeds shall be used to prepay the Loans and L/C Obligations
(and all such prepayments shall be accompanied by automatic
permanent reductions of the Commitments and the Permitted
Overadvance Amount, each in the amount of such prepayment; and
provided further that nothing in this subsection 2.6(c) shall be
deemed to permit any sale of assets otherwise prohibited by this
Agreement or any other Loan Document. If, after giving effect to
any such reductions in the Commitments, the Aggregate Outstanding
Extensions of Credit for all Lenders shall exceed the sum of the
Commitments as so reduced, the Borrower shall first, prepay the
Revolving Credit Loans and, second, cash collateralize the L/C
Obligations to the extent of such excess in the manner provided in
subsection 2.6(d). Notwithstanding anything to the contrary
contained in this subsection 2.6(c), to the extent that any Net
Cash Proceeds are derived from a sale of or containing assets which
would otherwise be included in the calculation of the Borrowing
Base, the reduction of the Permitted Overadvance Amount shall be
limited to the excess, if any, of (A) the amount of Net Cash
Proceeds which would be payable to the Lenders pursuant to the
foregoing provisions, over (B) the reduction, if any, in the
Borrowing Base immediately after giving effect to such sale.
(d) With respect to any Letter of Credit for which
presentment for honor shall not have occurred at the time
prepayment of the L/C Obligations is required pursuant to
subsection 2.6(c), the Borrower may satisfy such required
prepayment obligation hereunder by depositing in a cash collateral
account opened and maintained by the Agent, having terms and
conditions satisfactory to the Agent, an amount equal to 105% of
the then undrawn and unexpired amount of such Letter of Credit.
The Borrower hereby grants to the Agent, for the benefit of the
Issuing Lender and the L/C Participants, a security interest in
such cash collateral and cash collateral account to secure all
Obligations in respect of such Letters of Credit. Amounts held in
such cash collateral account shall be applied by the Agent to the
payments of drafts drawn under the Letters of Credit and any fees,
costs and expenses customarily incurred by the Issuing Lenders in
connection with honoring such Letters of Credit. After all the
Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other
obligations in respect of such Letters of Credit shall have been
paid in full, the balance, if any, in such collateral account shall
be returned to the Borrower. The Borrower shall execute and
deliver to the Agent, for the account of the Issuing Lender and the
L/C Participants, such further documents and instruments as the
Agent may request to evidence the creation and perfection of the
security interest referred to above in such cash collateral
account.
2.7 Interest Rates and Payment Dates. (a) Each Loan
shall bear interest at a rate per annum equal to the ABR plus 2%.
Upon the occurrence and during the continuance of an Event of
Default each Loan and other amounts due hereunder shall bear
interest at a rate per annum equal to the ABR plus 4%.
(b) Interest shall be payable in arrears on each
Interest Payment Date, provided that interest accruing pursuant to
paragraph (b) of this subsection shall be payable from time to time
on demand.
2.8 Computation of Interest and Fees. Commitment fees
and interest shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual days elapsed. Any
change in the interest rate on a Loan resulting from a change in
the ABR shall become effective as of the opening of business on the
day on which such change becomes effective. The Agent shall as
soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change in interest rate.
2.9 Pro Rata Treatment and Payments. (a) Each
borrowing by the Borrower from the Lenders hereunder, each payment
by the Borrower on account of any commitment fee hereunder and any
reduction of the Commitments of the Lenders shall be made pro rata
according to the respective Commitment Percentages of the Lenders.
Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Loans shall be made pro rata
according to the respective outstanding principal amounts of the
Loans then held by the Lenders. All payments (including
prepayments) to be made by the Borrower hereunder and under the
Notes, whether on account of principal, interest, fees or
otherwise, shall be made without set off or counterclaim and shall
be made prior to 12:00 Noon, New York City time, on the due date
thereof to the Agent, for the account of the Lenders, at the
Agent's office specified in subsection 9.2, in Dollars and in
immediately available funds. The Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder becomes due and payable on a
day other than a Business Day, 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.
(b) Unless the 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 Commitment Percentage
of such borrowing available to the Agent, the Agent may assume that
such Lender is making such amount available to the Agent, and the
Agent may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. If such amount is not made
available to the Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the 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 Agent. A certificate of
the 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 Commitment Percentage of such
borrowing is not made available to the Agent by such Lender within
three Business Days of such Borrowing Date, the Agent shall also be
entitled to recover such amount with interest thereon from the end
of such grace period at the rate per annum applicable to ABR Loans
hereunder, on demand, from the Borrower.
2.10 Requirements of Law. 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 made subsequent to the date hereof 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 its
obligations hereunder 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, after submission by such Lender to the Borrower (with a copy
to the Agent) of a written request therefore, the Borrower shall
pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction.
2.11 Taxes. (a) All payments made by the Borrower
under this Agreement and the 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 net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on the Agent or
any Lender as a result of a present or former connection between
the Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection
arising solely from the Agent or such Lender having executed,
delivered or performed its obligations or received a payment under,
or enforced, this Agreement or the 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 Agent or any Lender
hereunder or under the Notes, the amounts so payable to the Agent
or such Lender shall be increased to the extent necessary to yield
to the 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 the Notes,
provided, however, that the Borrower 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 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 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
Agent the required receipts or other required documentary evidence,
the Borrower shall indemnify the Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by
the 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 Notes and all other amounts
payable hereunder.
(b) Each Lender that is not incorporated under the
laws of the United States of America or a state thereof shall:
(i) deliver to the Borrower and the 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, and (B) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be;
(ii) deliver to the Borrower and
the 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 Agent;
unless in any such case an event (including, without limitation,
any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required 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 such Lender so advises the Borrower and the
Agent. Such Lender shall certify (i) in the case of a Form 1001 or
4224, that it is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal
income taxes and (ii) in the case of a Form W-8 or W-9, that it is
entitled to an exemption from United States backup withholding tax.
Each Person that shall become a Lender or a Participant pursuant to
subsection 9.6 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms and statements
required pursuant to this subsection, provided that in the case of
a Participant such Participant shall furnish all such required
forms and statements to the Lender from which the related
participation shall have been purchased.
2.12 L/C Commitment.
(a) Prior to the Effective Date, the Issuing Lender
has issued, for the account of Xxxxx Xxxxxx Corporation, the
letters of credit listed on Schedule 2.12 (the ``Existing Letters
of Credit'') and the Borrower hereby assumes all obligations of
Xxxxx Corona Corporation in respect of such letters of credit. All
Existing Letters of Credit shall, as of the Effective Date, be
deemed to be issued and outstanding pursuant to this Agreement and
all Prior Indebtedness in respect of the Existing Letters of Credit
shall be Obligations. Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other
Lenders set forth in subsection 2.15, agrees to issue irrevocable
letters of credit (together with the Existing Letters of Credit,
``Letters of Credit'') for the account of the Borrower on any
Business Day during the 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, (1) the Aggregate Outstanding
Extensions of Credit would exceed the lesser of (i) the Commitments
or (ii) the Borrowing Base as of such time, or (2) the aggregate of
the L/C Obligations would exceed $5,000,000. The commitment to
issue Letters of Credit as set forth in this subsection 2.12(a) is
referred to as the ``L/C Commitment.''
(b) Each Letter of Credit:
(i) shall be denominated in Dollars and shall be an
irrevocable commercial letter of credit issued in respect of the
purchase of goods or services by the Borrower and its Subsidiaries
in the ordinary course of business; and
(ii) if issued or extended after 30 days prior to the
Termination Date, expire no later than the Termination Date.
(c) 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.
(d) The Issuing Lender shall not at any time be
obligated to 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.
2.13 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 satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and
information as the Issuing Lender may 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.
2.14 Fees, Commissions and Other Charges.
(a) The Borrower shall pay to the Agent (i) a fronting
fee with respect to each Letter of Credit for the account of the
Issuing Lender in an amount equal to 1% of the face amount of such
Letter of Credit and (ii) for the account of the Lenders, an amount
equal to 2-1/2% per annum on the average daily face amount of all
Letters of Credit, to be shared ratably among them in accordance
with their respective Commitment Percentages. Such fronting fee
provided in clause (i) above shall be payable in advance on the
date of issuance of each Letter of Credit and shall be
nonrefundable and the fee provided in clause (ii) above shall be
payable quarterly in arrears on the last day of each March, June,
September and December and on the Termination Date or such earlier
date on which the Commitments shall terminate as provided herein,
commencing on the first of such dates to occur after the date
hereof.
(b) In addition to the foregoing fees and commissions,
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 Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants
all fees and commissions received by the Agent for their respective
accounts pursuant to this subsection.
2.15 L/C Participations.
(a) Effective on the Effective Date in the case of an
Existing Letter of Credit, and effective on the date of issuance in
the case of a Letter of Credit issued after the Effective Date, 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 Commitment Percentage 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 accordance with the terms of
this Agreement, 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
Commitment Percentage of the amount of such draft, or any part
thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to paragraph 2.15(a) 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 payment is
due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (1) such amount, times (2) the
daily average Federal Funds Effective Rate, as quoted by the
Issuing Lender, 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 (3) 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
paragraph 2.15(a) 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 Loans hereunder. A certificate of the Issuing
Lender submitted to any L/C Participant with respect to any amounts
owing under this subsection 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 2.15(a), the Issuing Lender receives any payment
related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied
thereto by the Issuing Lender), or any payment of interest on
account thereof, the Issuing Lender will distribute to such L/C
Participant its pro rata share thereof; 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.
2.16 Reimbursement Obligation of the Borrower.
(a) The Borrower agrees to reimburse the Issuing
Lender on each date on which the Issuing Lender notifies the
Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Lender, for the amount of
(1) such draft so paid and (2) any taxes, fees, charges or other
costs or expenses 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 lawful money
of the United States of America and in immediately available funds.
(b) Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this subsection from the
date such amounts become payable (whether at stated maturity, by
acceleration or otherwise) until payment in full at the rate which
would be payable on any outstanding Loans which were then overdue.
(c) Each drawing under any Letter of Credit shall
constitute a request by the Borrower to the Agent for a borrowing
pursuant to subsection 2.3 of Loans in the amount of such drawing.
The Borrowing Date with respect to such borrowing shall be the date
of such drawing.
(d) On the Termination Date, Borrower shall deposit in
a cash collateral account opened by Agent an amount equal to 105%
of the aggregate then undrawn and unexpired amount of all Letters
of Credit to secure its obligations with respect thereto.
2.17 Obligations Absolute.
(a) The Borrower also agrees with the Issuing Lender
that the Issuing Lender shall not be responsible for, and the
Borrower's Reimbursement Obligations under subsection 2.16(a) shall
not be affected by, among other things, (1) 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 (except where the failure to detect such invalidity,
fraud or forgery is the result of acts or omissions of the Issuing
Lender constituting gross negligence or willful misconduct), or (2)
any dispute between or among the Borrower and any beneficiary of
any Letter of Credit or any other party to which such Letter of
Credit may be transferred or (3) any claims whatsoever of the
Borrower against any beneficiary of such Letter of Credit or any
such transferee.
(b) The Issuing Lender shall not 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 the Issuing Lender's gross negligence or
willful misconduct.
(c) 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 of 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 to the
Borrower.
2.18 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 connection with any draft
presented for payment under any Letter of Credit shall, in the
absence of gross negligence or willful misconduct by the Issuing
Lender and 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.
2.19 Application.
To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions
of this Section 2, the provisions of this Section 2 shall apply.
2.20 Increased Costs. If, following the Effective
Date, any law or regulation or any change in the interpretation or
application thereof by any court or administrative or Governmental
Authority charged with the administration thereof shall either (i)
impose, modify, assess or deem applicable any reserve, special
deposit, assessment or similar requirement against any L/C
Commitment or Letters of Credit issued by the Issuing Lender or any
Lender or (ii) impose on the Issuing Lender or any Lender any other
condition regarding any Letter of Credit, and the result of any
event referred to in clauses (i) or (ii) above shall be to increase
the cost to the Issuing Lender or such Lender of issuing or
maintaining such Letter of Credit, any L/C Commitment or its
participation therein, as the case may be (which increase in cost
shall be the result of the Issuing Lender's or such Lender's
reasonable allocation of the aggregate of such cost increases
resulting from such events), then, upon demand by the Issuing
Lender, the Agent or such Lender, the Borrower shall immediately
pay to the Issuing Lender or such Lender from time to time as
specified by the Issuing Lender or such Lender additional amounts
which shall be sufficient to compensate the Issuing Lender or such
Lender for such increased cost, together with interest on each such
amount from the date demanded until payment in full thereof at the
rate provided in subsection 2.16(b). A certificate as to the fact
and amount of such increased cost incurred by the Issuing Lender or
any Lender as a result of any event mentioned in clauses (a) or (b)
above, submitted by the Issuing Lender or any such Lender to the
Borrower, shall be conclusive, absent manifest error.
2.21 Further Assurances. The Borrower hereby agrees
from time to time, to do and perform any and all acts and to
execute any and all further instruments required or reasonably
requested by the Issuing Lender or the Required Lenders more fully
to effect the purposes of this Agreement and the issuance of the
Letters of Credit hereunder.
2.22 Nature of Obligations; Indemnities. (a) The
obligations of the Borrower hereunder 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, the Agent, any
Lender or any beneficiary of a Letter of Credit, provided, however,
that this provision shall be deemed a waiver by the Borrower of the
assertion of a compulsory counterclaim only to the extent permitted
by applicable law. The Borrower assumes all risks of the acts or
omissions of the users of the Letters of Credit and all risks of
the misuse of the Letters of Credit. Neither the Issuing Lender,
any of its correspondents or any Lender shall be responsible: (i)
for the form, validity, sufficiency, accuracy, genuineness or legal
effect of any document specified in any of the Applications for any
of the Letters of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent,
or forged; (ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
of the Letters of Credit or any of the rights or benefits
thereunder or proceeds thereof in whole or in part; (iii) for
failure of any draft to bear any reference or adequate reference to
any of the Letters of Credit, or failure of anyone to note the
amount of any draft on the reverse of any of the Letters of Credit
or to surrender or to take up any of the Letters of Credit or to
send forward any such document apart from drafts as required by the
terms of any of the Letters of Credit, each of which provisions, if
contained in a Letter of Credit itself, it is agreed, may be waived
by the Issuing Lender; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher;
(v) for any error, neglect, default, suspension or insolvency of
any correspondents of the Issuing Lender; (vi) for errors in
translation or for errors in interpretation of technical terms;
(vii) for any loss or delay, in the transmission or otherwise, of
any such document or draft or of proceeds thereof; or (viii) for
any other circumstances whatsoever in making or failing to make
payment under a Letter of Credit. None of the above shall affect,
impair or prevent the vesting of any of the rights or powers of the
Issuing Lender, the Agent or any of the Lenders. The Issuing
Lender or the Agent shall have the right to transmit the terms of
the Letter of Credit involved without translating them.
(b) In furtherance and extension and not in limitation
of the specific provisions hereinabove in these subsections 2.12
through 2.22 set forth, (i) any action taken or omitted by the
Issuing Lender, the Agent, any Lender or by any of their respective
correspondents under or in connection with any of the Letters of
Credit, if taken or omitted in good faith and without willful
misconduct or gross negligence, shall be binding upon the Borrower
and shall not put the Issuing Lender, the Agent, any Lender or
their respective correspondents under any resulting liability to
the Borrower and (ii) the Issuing Lender may accept documents that
appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to
the contrary; provided that if the Issuing Lender shall receive
written notification from both the beneficiary of a Letter of
Credit and the Borrower that sufficiently identifies (in the
opinion of the Issuing Lender) documents to be presented to the
Issuing Lender which are not to be honored, the Issuing Lender
agrees that it will not honor such documents.
(c) The Borrower hereby agrees at all times to
protect, indemnify and save harmless each of the Issuing Lender,
the Agent, its correspondents and any Lender, from and against any
and all claims, actions, suits and other legal proceedings, and
from and against any and all losses, claims, demands, liabilities,
damages, costs, charges, counsel fees and other expenses which they
or any of them may, at any time, sustain or incur by reason of or
in consequence of or arising out of the issuance of any of the
Letters of Credit; it being the intention of the parties that this
Agreement shall be construed and applied to protect and indemnify
each of the Issuing Lender, the Agent, its correspondents and any
Lender against any and all risks involved in the issuance of all of
the Letters of Credit, all of which risks, whether or not
foreseeable, being hereby assumed by the Borrower (except as
otherwise provided for herein), including, without limitation, any
and all risks of all acts by any Governmental Authority, domestic
or foreign. The Issuing Lender, the Agent or any Lender shall not,
in any way, be liable for any failure by it or anyone else to pay
a draft drawn under any of the Letters of Credit as a result of any
acts, whether rightful or wrongful, of any Governmental Authority,
or any other cause not readily within their control or the control
of their respective correspondents, agents, or subagents. Without
limiting the generality of the foregoing, the Borrower shall
reimburse each of the Issuing Lender, the Agent, its correspondents
and any Lender, and shall pay and indemnify each of the Issuing
Lender, the Agent, its correspondents and any Lender against
payment of, out-of-pocket costs and expenses, withholding taxes,
liabilities and damages including, without limitation, reasonable
counsel fees, incurred or sustained by any of them in connection
with any of the Letters of Credit or by reason of any such failure
to pay. Also, without limiting the generality of the foregoing,
the Borrower shall reimburse the Issuing Lender or the Agent
forthwith upon its receipt of any demand therefor, for any and all
commissions, fees and other charges paid or payable by the Issuing
Lender or the Agent to any foreign bank which shall be an advising
bank or a beneficiary of a Letter of Credit which shall, in
reliance thereon, have issued its own letter of credit in respect
of obligations of the Borrower. Notwithstanding the foregoing
provisions of this subsection 2.22(c), the Borrower shall have no
obligation to indemnify any Issuing Lender, the Agent, any
correspondent or any Lender from or against any liabilities or
other costs of any nature whatsoever resulting from any acts or
omissions of any such party constituting gross negligence or
willful misconduct.
2.23 Superpriority of Obligations.
All Obligations under the Loan Documents shall constitute
allowed administrative expense claims against the Borrower in the
Chapter 11 Case with priority under Section 364(c)(1) of the
Bankruptcy Code over any and all other administrative expenses of
the kind specified or ordered pursuant to any provision of the
Bankruptcy Code, including, but not limited to, Sections 105, 326,
328, 503(b), 506(c), 507(a), 507(b) and 726 of the Bankruptcy Code;
provided that, upon the occurrence and during the continuance of an
Event of Default under this Agreement or the exercise by Agent or
any Lender of its remedies after an Event of Default, such claims
shall be subject to: (i) unpaid professional fees and expenses
allowed in the Chapter 11 Case in an aggregate amount (determined
without regard to fees and expenses awarded or otherwise paid on an
interim basis) not to exceed $1,000,000 inclusive of aggregate fee
holdbacks (the ``Carve-Out''); and (ii) fees payable to the United
States Trustee pursuant to 28 U.S.C. SS 1930(a)(6).
2.24 Payments of Prior Indebtedness.
All proceeds of the Loans shall be applied first to
payment of the unpaid loans included within the Prior Indebtedness
until such loans have been paid in full.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to
the Agent and each Lender that:
3.1 Financial Condition. The consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at June
30, 1994 and the related consolidated statements of income and of
cash flows for the fiscal year ended on such date, reported on by
Deloitte & Touche, LLP, copies of which have heretofore been
furnished to each Lender, are complete and correct and present
fairly the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for
the fiscal year then ended. The unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at May
31, 1995 and the related unaudited consolidated statements of
income and of cash flows for the eleven-month period ended on such
date, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, are complete and correct
and present fairly the consolidated financial condition of the
Borrower and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated
cash flows for the eleven-month period then ended (subject to
normal year-end audit adjustments). All quarterly and annual
financial statements of the Borrower and its Subsidiaries delivered
to the Lenders that are filed with the Securities and Exchange
Commission or otherwise generally made available to the public
shall be prepared in accordance with GAAP and all other financial
statements (including interim financial statements and projections)
delivered to the Lenders will be prepared on a basis consistent
with the basis on which the financial statements delivered pursuant
to the Prior Agreement were prepared. Neither the Borrower nor any
of its consolidated Subsidiaries had, at the date of the most
recent balance sheet referred to above, any material Guarantee
Obligation, contingent liability or liability for taxes, or any
long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign
currency swap or exchange transaction, which is not reflected in
the foregoing statements or in the notes thereto. During the
period from May 31, 1995 to and including the date hereof there has
been no sale, transfer or other disposition by the Borrower or any
of its consolidated Subsidiaries of any material part of its
business or property and no purchase or other acquisition of any
business or property (including any capital stock of any other
Person) material in relation to the consolidated financial
condition of the Borrower and its consolidated Subsidiaries at May
31, 1995.
3.2 No Change. Since the Petition Date, there has
been no development or event which has had or could have a Material
Adverse Effect except as disclosed in the Reports filed and
delivered to the Agent prior to the date hereof or as otherwise
disclosed to the Agent in connection with the filing of the Chapter
11 Case.
3.3 Corporate Existence; Compliance with Law. Each of
the Borrower and its Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its organization, (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, (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 (provided
that Borrower is not required to be in good standing in the States
of Connecticut and Hawaii until the date that is forty-five (45)
days after the Effective Date) and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply
therewith could not, in the aggregate, have a Material Adverse
Effect.
3.4 Corporate Power; Authorization; Enforceable
Obligations. The Borrower has the corporate power and authority,
and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and to borrow hereunder and has
taken all necessary corporate action to authorize the borrowings on
the terms and conditions of this Agreement, the Notes and the
Applications and to authorize the execution, delivery and
performance of the Loan Documents to which it is a party. By the
Effective Date, the execution, delivery and performance of the Loan
Documents and the issuance, delivery and payment of the Notes will
be duly authorized by the Court. No consent or authorization of,
filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan
Documents to which the Borrower is a party. This Agreement has
been, and each other Loan Document to which it is a party will be,
duly executed and delivered on behalf of the Borrower. This
Agreement constitutes, and each other Loan Document to which it is
a party when executed and delivered will constitute, a legal, valid
and binding obligation of the Borrower enforceable against the
Borrower 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).
3.5 No Legal Bar. The execution, delivery and
performance of the Loan Documents to which the Borrower is a party,
the borrowings hereunder and the use of the proceeds thereof will
not, subject to Court approval, violate any Requirement of Law or
Contractual Obligation (the performance or enforceability of which
has not been excused by the Bankruptcy Code or an applicable order
of the Court) of the Borrower or of any of its Subsidiaries and
will not result in, or require, the creation or imposition of any
Lien on any of its or their respective properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation.
3.6 No Material Litigation. Except as disclosed in
the Reports filed and delivered to the Agent prior to the date
hereof, no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority that relates to any period
after the Petition Date is pending or, to the knowledge of the
Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of its or their respective properties
or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby, or (b) which could
have a Material Adverse Effect.
3.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default (other than any default under or with
respect to obligations existing on the Petition Date that was
caused solely by the filing of the Chapter 11 Case) under or with
respect to any of its Contractual Obligations in any respect which
could have a Material Adverse Effect, provided that the Borrower
shall furnish the Agent with copies of any and all waivers granted
for the benefit of the Borrower or any of its Subsidiaries in
respect of Contractual Obligations. No Default or Event of Default
has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the
Borrower and its Subsidiaries has good record and marketable title
in fee simple to, or a valid leasehold interest in, all its real
property, and good title to, or a valid leasehold interest in, all
its other property, and none of such property is subject to any
Lien except as permitted by subsection 6.3.
3.9 Intellectual Property. The Borrower and each of
its Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, technology, know-how and processes
necessary for the conduct of its business as currently conducted
except for those the failure to own or license which could not have
a Material Adverse Effect (the ``Intellectual Property''). Except
as set forth in Schedule 3.9 hereto, 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 valid
basis for any such claim. To the Borrower's knowledge, 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 that, in the aggregate, do not have a
Material Adverse Effect.
3.10 No Burdensome Restrictions. No Requirement of
Law or Contractual Obligation of the Borrower or any of its
Subsidiaries has a Material Adverse Effect.
3.11 Taxes. Except to the extent payment has been
excused by the Bankruptcy Code or an applicable order of the Court,
each of the Borrower and its Subsidiaries has filed or caused to be
filed all tax returns which, to the knowledge of the Borrower, are
required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority
(other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect
to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); no
tax Lien has been filed, and, to the knowledge of the Borrower, no
claim is being asserted, with respect to any such tax, fee or other
charge.
3.12 Federal Regulations. No part of the proceeds of
any Loans will be used for ``purchasing'' or ``carrying'' any
``margin stock'' within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in
effect or for any purpose which violates the provisions of the
Regulations of such Board of Governors. If requested by any Lender
or the Agent, the Borrower will furnish to the Agent and each
Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in said Regulation U.
3.13 ERISA. Neither a Reportable Event nor an
``accumulated funding deficiency'' (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code. No termination of a Single
Employer Plan has occurred, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period. Except as set forth
on Schedule 3.13 hereto, the present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date
prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such
accrued benefits. Neither the Borrower nor any Commonly Controlled
Entity has made, has been required to make or is currently required
to make any contributions to a Multiemployer Plan.
3.14 Investment Company Act; Other Regulations. The
Borrower is not an ``investment company'', or a company
``controlled'' by an ``investment company'', within the meaning of
the Investment Company Act of 1940, as amended. The Borrower is
not subject to regulation under any Federal or State statute or
regulation which limits its ability to incur Indebtedness.
3.15 Subsidiaries. Schedule 3.15 is a complete and
accurate list of all of the Subsidiaries of the Borrower at the
date hereof.
3.16 Purpose of Loans. The proceeds of the Loans
shall be used by the Borrower for general corporate purposes.
3.17 Accuracy and Completeness of Information. All
information, reports and other papers and data with respect to the
Borrower and its Subsidiaries (other than projections) furnished to
the Lenders by the Borrower were, at the time the same were so
furnished, complete and correct in all material respects, or have
been subsequently supplemented by other information, reports or
other papers or data, to the extent necessary to give the Lenders
a true and accurate description of the subject matter of such
information, reports, or other papers and data in all material
respects. All projections with respect to the Borrower and its
Subsidiaries, furnished to the Lenders by or on behalf of the
Borrower, as supplemented, were prepared and presented in good
faith by the Borrower, it being recognized by the Lenders that such
projections as to future events are not to be viewed as facts and
that actual results during the period or periods covered by any
such projections may differ from the projected results. No fact is
known or should be known to the Borrower which has or may have a
Material Adverse Effect, which has not been set forth in the
financial statements referred to in subsection 3.1 or in such
information, reports, papers and data or otherwise disclosed in
writing to the Lenders prior to the Effective Date. No document
furnished or statement made in writing to the Lenders by the
Borrower in connection with the negotiation, preparation or
execution of this Agreement contains any untrue statement of a
material fact, or omits to state a material fact necessary in order
to make the statements contained therein, in the light of the
circumstances in which they were made, not misleading, in either
case which has not been corrected, supplemented or remedied by
subsequent documents furnished or statements made in writing to the
Lenders.
3.18 Collateral Documents. The provisions of the
Collateral Documents are effective to create in favor of the Agent,
for the ratable benefit of the Lenders, a legal, valid and non-voidable
security interest in all right, title and interest of the
Borrower in the collateral described therein. Schedule 3 to the
Security Agreement lists the proper filing offices for all UCC
financing statements that must be filed by the Agent in order to
perfect, pursuant to the UCC, for the benefit of the Agent, a fully
perfected, first-priority security interest in all right, title and
interest of the Borrower in the collateral granted pursuant to the
Security Agreement, subject to any Liens permitted by subsection
6.3.
3.19 Environmental Matters. Except as disclosed in
the Reports filed and delivered to the Agent prior to the date
hereof or as set forth in Schedule 3.19 hereto,
(a) The facilities and properties owned, leased or
operated by the Borrower or any of its Subsidiaries (the
``Properties'') do not contain, and have not previously contained,
any Materials of Environmental Concern in amounts or concentrations
which (i) constitute or constituted a violation of, or (ii) could
give rise to liability under, any Environmental Law, except in
either case insofar as such violation or liability, or any
aggregation thereof, is not reasonably likely to result in the
payment of an amount which could have a Material Adverse Effect.
(b) The Properties and all operations at the
Properties are in compliance, and have in the last five years been
in compliance in all material respects, with all applicable
Environmental Laws, and there is no contamination at, under or
about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the Borrower
or any of its Subsidiaries (the ``Business'') which could
materially interfere with the continued operation of the Properties
or materially impair the fair saleable value thereof.
(c) Neither the Borrower nor any of its Subsidiaries
has received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding
environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor does the
Borrower have knowledge or reason to believe that any such notice
will be received or is being threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation
of, or in a manner or to a location which could give rise to any
material liability under, any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation
of, or in a manner that could give rise to any material liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the
Borrower, threatened, under any Environmental Law to which the
Borrower or any Subsidiary is or will be named as a party with
respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect
to the Properties or the Business.
(f) There has been no release or, to the best
knowledge of the Borrower, threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any Subsidiary in
connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could
give rise to any material liability under Environmental Laws.
3.20 Prior Agreement. Pursuant to the Prior
Agreement, the Lenders hold valid, perfected and nonvoidable
security interests in the Collateral other than the Cortland
Distribution Property (as such terms are defined therein) to secure
all obligations and indebtedness covered thereby, including the
Prior Indebtedness.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Extension of Credit. The
agreement of each Lender to make the initial extension of credit
requested to be made by it is subject to the satisfaction,
immediately prior to or concurrently with the making of such
extension of credit on the Effective Date, of the following
conditions precedent:
(a) Loan Documents. The Agent shall have received
(i) this Agreement and each Collateral Document, each executed
and delivered by a duly authorized officer of the applicable Credit
Party, with a respective counterpart for each Lender and (ii) for
the account of each Lender, a Revolving Credit Note conforming to
the requirements hereof and executed by a duly authorized officer
of the Borrower.
(b) Perfection of First-Priority Liens. The Agent
shall have, for the benefit of the Agent and the Lenders, a first-
priority (subject to permitted Liens), perfected security interest
in the collateral granted pursuant to the Collateral Documents,
including without limitation the stock pledged pursuant to the
Borrower Pledge Agreement.
(c) Borrowing Certificate. The Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrower, dated as of the Effective Date, substantially in the form
of Exhibit D, with appropriate insertions and attachments,
satisfactory in form and substance to the Agent, executed by the
Chief Executive Officer, President or any Vice President of the
Borrower.
(d) Corporate Proceedings of the Credit Parties. The
Agent shall have received, with a counterpart for each Lender, a
copy of the resolutions, in form and substance satisfactory to the
Agent, of the Board of Directors of each Credit Party authorizing
(i) the execution, delivery and performance of each Loan Document
to which such Credit Party is a party and (ii) with respect to the
Borrower, the borrowings contemplated hereunder, certified by the
Secretary or an Assistant Secretary of the applicable Credit Party
as of the Effective Date, which certificate shall be in form and
substance satisfactory to the Agent and shall state that the
resolutions thereby certified have not been amended, modified,
revoked or rescinded.
(e) Incumbency Certificate. The Agent shall have
received, with a counterpart for each Lender, a Certificate of each
Credit Party, dated as of the Effective Date, as to the incumbency
and signature of the officers of the applicable Credit Party
executing any Loan Document satisfactory in form and substance to
the Agent, executed by the Chairman and Chief Executive Officer,
President, any Vice President, the Secretary or any Assistant
Secretary of the applicable Credit Party.
(f) Corporate Documents. The Agent shall
have received, with a counterpart for each Lender, true and
complete copies of the certificate of incorporation and by-laws of
each Credit Party, certified as of the Effective Date as complete
and correct copies thereof by the Secretary or an Assistant
Secretary of the applicable Credit Party.
(g) Good Standing Certificates. The Agent shall have
received, for itself and for each Lender, copies of certificates
dated as of a recent date from the Secretary of State or other
appropriate authority, evidencing the good standing of each Credit
Party in each State where the ownership, lease or operation of
property or the conduct of business requires it to qualify as a
foreign corporation, except where the failure to so qualify would
not have a Material Adverse Effect; provided that the good standing
certificates for the Borrower from the respective Secretaries of
State of Connecticut and Hawaii shall be delivered as soon as
available and, in any event, within 45 days after the Effective
Date.
(h) Litigation. No suit, action, investigation,
inquiry or other proceeding (including, without limitation, the
enactment or promulgation of a statute or rule of which the
Borrower is aware after reasonable inquiry) by or before any
arbitrator or any Governmental Authority shall be pending and no
preliminary or permanent injunction or order by a state or federal
court shall have been entered (i) in connection with this Agreement
or the other Loan Documents or any of the transactions contemplated
hereby or thereby or (ii) which, in any such case, in the
reasonable judgment of the Agent, is reasonably likely to have a
Material Adverse Effect.
(i) No Violation. The consummation of the
transactions contemplated hereby shall not contravene, violate or
conflict with, nor involve the Agent or any Lender in a violation
of, any Requirement of Law.
(j) Consents, Licenses, Approvals, Etc. The Agent
shall have received, with a counterpart for each Lender, a
certificate of a Responsible Officer or the treasurer of the
Borrower either (i) attaching copies of all consents, licenses and
approvals required in connection with the execution, delivery and
performance by the Borrower and the validity and enforceability
against the Borrower of the Loan Documents and such consents,
licenses and approvals shall be in full force and effect, or (ii)
stating that no such consents, licenses or approvals are so
required.
(k) Legal Opinion. The Agent shall have received,
with a counterpart for each Lender, the executed legal opinion of
Winthrop, Stimson, Xxxxxx & Xxxxxxx, counsel to the Borrower,
substantially in the form of Exhibit B.
(l) Borrowing Base Certificate. The Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrower, substantially in the form of Exhibit E with appropriate
insertions and attachments, duly executed by a Responsible Officer.
(m) Fees and Interest. All accrued and unpaid fees
and interest payable to the Lenders party to the Prior Agreement
shall be paid in full and distributed to such Lenders in accordance
with the Prior Agreement.
(n) Security Interest in Real Property and Leaseholds.
The Agent shall have received in respect of the Cortland Warehouse
Property, the following:
(1) an executed mortgage encumbering the Cortland
Warehouse Property (the ``Mortgage''), reasonably acceptable to the
Agent and the Agent's counsel; provided, however, the face amount
of the Mortgage shall not exceed 125% of the appraised value of the
Cortland Warehouse Property;
(2) an appraisal of the Cortland Warehouse Property in
compliance with all FIRREA regulations;
(3) a Phase I environmental audit, with a copy for each
Lender, from an environmental consulting or auditing firm
reasonably satisfactory to the Agent and in form and substance
satisfactory to the Agent, which audit, in any event, shall address
and provide conclusions in respect of any environmental hazards,
conditions or liabilities (contingent or otherwise) with respect to
the Cortland Warehouse Property;
(4) a survey, consisting of maps or plats of an as-built
survey of the site of the Cortland Warehouse Property certified to
the Agent and the title insurance company issuing the policy
referred to in subsection 5.12(e) (the ``Title Insurance Company'')
in a manner satisfactory to them, dated a date reasonably
satisfactory to them by an independent professional licensed land
surveyor reasonably satisfactory to the 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 or
necessary or desirable to use the sites; (iv) all roadways, paths,
driveways, easements, encroachments and overhanging projections and
similar encumbrances affecting the site, 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;
(5) a mortgagee's title policy (or policies) or
marked-up unconditional commitments for such insurance dated
within 30 days of the Effective Date. Each such policy shall
(i) be in an amount reasonably satisfactory to the Agent; (ii) be
issued at ordinary rates; (iii) insure that the Cortland Warehouse
Property insured thereby creates a valid first Lien on the property
covered by the Mortgage free and clear of all defects and
encumbrances, except such as may be reasonably approved by the
Agent and its counsel; (iv) name the Agent for the benefit of the
Lenders as the insured thereunder; (v) be in the form of an
acceptable New York State mortgage form; (vi) contain such
endorsements and affirmative coverage as the Agent may reasonably
request and (vii) be issued by a title insurance company
satisfactory to the Agent (including any such title insurance
companies acting as co-insurers or reinsurers, at the option of the
Agent). The Agent shall have received evidence reasonably
satisfactory to it that all premiums in respect of each such
policy, and all charges for recording of the Mortgage and for
mortgage recording tax, if any, have been paid;
(6) with respect to any parcel of improved real
property encumbered by the Mortgage which is within an area
designated as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency, the Agent shall have
received (i) a policy of flood insurance which (A) covers any
parcel of such improved real property, (B) is written in an amount
not less than the outstanding principal amount of the Indebtedness
secured by the Mortgage which is reasonably allocable to such real
property or the maximum limit of coverage made available with
respect to the particular type of property, whichever is less, and
(C) has a term ending not later than the maturity of the
indebtedness secured by the Mortgage and (ii) original copies of
each of the notice(s), if any, required pursuant to Section
208(e)(3) of Regulation H of the Board of Governors of the Federal
Reserve System, duly executed by the Borrower;
(o) Prior Indebtedness. All Prior Indebtedness (other
than reimbursement obligations in respect of outstanding letters of
credit) shall be paid in full, concurrently with the extension of
the initial Loans under this Agreement.
4.2 Conditions to Each 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, its
initial Loan) is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by each Credit Party in or
pursuant to the Loan Documents shall 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 extension of credit requested to be made on such date.
(c) Borrowing Order. The Interim Borrowing Order or
the Final Borrowing Order, as applicable, shall be in full force
and effect.
(d) Additional Matters. All corporate and other
proceedings, and all documents, instruments and other legal matters
in connection with the transactions contemplated by this Agreement
and the other Loan Documents shall be satisfactory in form and
substance to the Agent, and the Agent shall have received such
other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as
it shall reasonably request.
Each borrowing by, and each issuance of a Letter of Credit for the
account of, the Borrower hereunder shall constitute a
representation and warranty by the Borrower as of the date of such
Loan that the conditions contained in this subsection 4.2 have been
satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the
Commitments remain in effect, any Note or any Letter of Credit
remains outstanding and unpaid or any other amount is owing to any
Lender or the Agent hereunder, the Borrower shall and (except in
the case of delivery of financial information, reports and notices)
shall cause each of its Subsidiaries to:
5.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within
95 days after the end of each fiscal year of the Borrower, a
copy of the consolidated and consolidating balance sheets of the
Borrower and its consolidated Subsidiaries as at the end of such
year, the related consolidated and consolidating statements of
income and retained earnings and the related consolidated
statements of cash flows for such year, setting forth in each case
in comparative form the figures for the previous year, and, with
respect to the consolidated financial statements, reported on
without a qualification arising out of the scope of the audit, by
Deloitte & Touche, LLP or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later
than 50 days after the end of each of the first three quarterly
periods of each fiscal year of the Borrower, the unaudited
consolidated and consolidating balance sheets of the Borrower and
its consolidated Subsidiaries as at the end of such quarter, the
related unaudited consolidated and consolidating statements of
income and retained earnings and the related unaudited consolidated
statements of 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 each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments); and
(c) not later than 20 days after the end of each
calendar month, the unaudited consolidated and consolidating
balance sheets of the Borrower and its consolidated Subsidiaries as
at the end of such month, the related unaudited consolidated and
consolidating statements of income and retained earnings and the
related consolidated statements of cash flows of the Borrower and
its consolidated Subsidiaries for such month, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal audit adjustments).
All quarterly and annual financial statements of the Borrower and
its Subsidiaries delivered to the Lenders that are filed with the
Securities and Exchange Commission or otherwise generally made
available to the public shall be prepared in accordance with GAAP
and all other financial statements (including interim financial
statements and projections) delivered to the Lenders will be
prepared on a basis consistent with the basis on which the
financial statements delivered pursuant to the Prior Agreement were
prepared. For purposes of this Section 5.1, the term
``consolidating balance sheets'' shall refer to the consolidated
balance sheet (which contains consolidating accounting entries) in
substantially the form prepared by the Borrower and delivered to
the Lenders prior to the Effective Date.
5.2 Certificates; Other Information. Furnish to each
Lender:
(a) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a), 5.1(b) and 5.1(c), a
certificate of a Responsible Officer, substantially in the form
attached hereto as Exhibit M, stating that, to the best of such
Officer's knowledge, the Borrower during such period has observed
or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement, any
Applications and in the Notes to be observed, performed or
satisfied by it, and that such Officer has obtained no knowledge of
any Default or Event of Default except as specified in such
certificate and setting forth calculations evidencing compliance
with the financial covenants contained in subsection 6.1;
(b) within five days after the same are sent, copies
of all financial statements and reports which the Borrower sends to
its stockholders, and within five days after the same are filed,
copies of all financial statements and reports which the Borrower
may make to, or file with, the Securities and Exchange Commission
or any successor or analogous Governmental Authority;
(c) promptly, such additional financial and other
information as any Lender may from time to time reasonably request;
(d) within 20 days after the end of each fiscal month
(or more frequently as may be agreed by the Borrower and the
Agent), a Borrowing Base Certificate, substantially in the form of
Exhibit E or in such other form as the Agent shall reasonably
request, as of the close of business on the last day of such fiscal
month, accompanied by the reports described on Exhibit G or in such
other form as the Agent shall reasonably request, and certified as
complete and correct as of the date thereof by a Responsible
Officer of the Borrower; provided that if a Default has occurred
and is continuing, Borrower shall deliver a Borrowing Base
Certificate and the accompanying reports from time to time as often
as the Agent may request; and
(e) promptly give notice to the Agent and each Lender
if the Borrower should reasonably know that an account debtor of
the Borrower or a Subsidiary becomes a debtor in any bankruptcy,
insolvency or reorganization proceeding and such account debtor
owes the Borrower or a Subsidiary an amount equal to or greater
than 2% of all Accounts of the Borrower.
5.3 Business Plans. By September 5, 1995, furnish to
each Lender a business plan containing detailed financial
projections, including without limitation consolidating balance
sheets and income statements and consolidated statements of cash
flows, in each case for the Borrower and its Subsidiaries prepared
on a monthly basis through June 30, 1996, and proposed covenant
amounts for the remaining term of this Agreement for the financial
covenants contained in subsections 6.1(a) and (b).
5.4 Payment of Obligations. Pay, discharge or
otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its obligations of whatever
nature, except where the amount or validity thereof is currently
being contested in good faith by appropriate proceedings and
reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the
case may be.
5.5 Conduct of Business and Maintenance of Existence.
Engage solely in the business in which it is presently engaged 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 its business except as otherwise permitted pursuant to
subsection 6.5; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, have a Material Adverse
Effect.
5.6 Maintenance of Quality Control Procedures.
Maintain in accordance with historical practice the quality of
products and services offered.
5.7 Maintenance of Property; Insurance. Keep all
property useful and necessary in its business in good working order
and condition; maintain with financially sound and reputable
insurance companies insurance on all its property in at least such
amounts and against at least such risks as are usually insured
against in the same general area by companies engaged in the same
or a similar business; and furnish to each Lender, upon written
request, full information as to the insurance carried.
5.8 Inspection of Property; Books and Records;
Discussions. Keep proper books of records and account in which
full, true and correct entries in conformity in all material
respects with GAAP and all 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 make abstracts from
any of its books and records upon reasonable prior notice and
during normal business hours and as often as may reasonably be
desired 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.
5.9 Notices. As soon as possible after a Responsible
Officer of the Borrower has knowledge of any of the following, give
notice to the Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries
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, could have a Material
Adverse Effect;
(c) any litigation or proceeding affecting the
Borrower or any of its Subsidiaries in which the amount involved is
$1,000,000 or more and not covered by insurance or in which
injunctive or similar relief is sought;
(d) the following events, as soon as possible and in
any event within 30 days after the Borrower knows or has reason to
know thereof: (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan, a failure to make any
required contribution to a Plan, the creation of any Lien in favor
of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the
PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan;
(e) any amendment of the certificate of incorporation or
by-laws of the Borrower; and
(f) any development or event which has had a Material
Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Borrower
proposes to take with respect thereto.
5.10 Environmental Laws. (a) Comply with, and ensure
compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply with and
maintain, and ensure that all tenants and subtenants obtain and
comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable
Environmental Laws.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply with all
lawful orders and directives of all Governmental Authorities
regarding Environmental Laws.
5.11 Maintenance of Liens of the Collateral Documents.
Promptly, upon the reasonable request of the Agent or any Lender,
at the Borrower's expense, execute, acknowledge and deliver, or
cause the execution, acknowledgement and delivery of, and
thereafter register, file or record, or cause to be registered,
filed or recorded, in an appropriate governmental office, any
document or instrument supplemental to or confirmatory of any
Collateral Document or otherwise deemed by the Agent necessary or
desirable for the continued validity, perfection and priority of
the Liens on the collateral covered thereby (subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar law).
5.12 Further Assurances; Intellectual Property.
Execute and deliver such further documents and do such other acts
and things as the Agent or Lenders may at any time or from time to
time reasonably request in order to effect fully the purposes of
this Agreement and the other Loan Documents and to provide for
payment of the obligations hereunder and the under the other Loan
Documents in accordance with the terms of this Agreement and the
other Loan Documents and to grant a perfected, first-priority
security interest in all of its real, personal and mixed property,
including without limitation, deliver to the Agent the stock
certificates (together with signed, undated stock powers duly
endorsed in blank) representing the stock pledged pursuant to the
Borrower Pledge Agreement. Without limiting any of the foregoing,
in the event the Borrower or any of its Subsidiaries registers any
trademark, copyright or patent with any governmental authority,
then, the Borrower upon the request of the Agent, shall or shall
cause its Subsidiaries to execute and deliver such guaranties,
Collateral Documents and such other agreements, pledges,
assignments in a mutually satisfactory fashion, documents and
certificates (including, without limitation, any amendments to the
Loan Documents) as may be necessary or as the Agent may reasonably
request and do such other acts and things as the Agent may
reasonably request in order to have such trademark, copyright or
patent secure the Obligations and the other obligations secured by
the Collateral Documents, as the case may be, and effect fully the
purposes of this Agreement and the other Loan Documents and to
provide for payment of the Obligations in accordance with the terms
of this Agreement and the other Loan Documents.
Upon the request of the Agent or Lenders, the Borrower
shall cause any or all of its Subsidiaries to execute and deliver
guaranties of the Obligations and the other obligations secured by
the Collateral Documents, pledge agreements and security
agreements, in each case in form and substance satisfactory to the
Agent, and shall cause each such Subsidiary to take all actions and
deliver all documents required or reasonably requested to give the
Agent a valid and perfected first-priority security interest in all
of its property (real, personal or mixed), as requested by the
Agent. If requested by the Agent or the Lenders, the Borrower
shall cause an opinion or opinions of counsel covering the matters
described in this paragraph and otherwise in form and substance
satisfactory to the Agent and Lenders and all applicable corporate
documents (including without limitation resolutions of the board of
directors, organizational documents and signature and incumbency
certificates) to be delivered to the Agent and the Lenders.
5.13 Cash Management System. Within 30 days after
the Effective Date, the Borrower shall establish a cash management
system reasonably acceptable to the Lenders and the Agent and shall
take all actions and execute all documents as shall be reasonably
directed by the Lenders and the Agent in connection with the
establishment of such cash management system. It is understood
that such establishment of such cash management system will not
require that the Borrower's account debtors be instructed to change
their method or location of payments but rather will involve
entering into agreements with the banks at which the Borrower's
existing collection accounts are maintained to provide that (i)
such collection accounts will be maintained in the name of and
under the control of the Agent, (ii) only proceeds of the Lenders'
collateral will be deposited in such collection accounts and (iii)
collected and available funds in such collection accounts will be
transferred daily to the Agent without the requirement of any
further instruction or notification by the Agent.
5.14 Payment of Rent Obligations. Timely pay all
amounts due with respect to any period after the Petition Date to
each lessor of real property at which Inventory is located at any
time after the Petition Date; provided that nothing contained
herein shall require the Borrower to elect to assume or reject any
such lease of real property.
5.15 Payment of Certain Prior Indebtedness.
Notwithstanding anything to the contrary contained in this
Agreement (including without limitation subsections 2.5 and 2.6
hereof), if the Borrower elects to prepay the Loans and other
Obligations (including any prepayment from the proceeds of
refinancing Indebtedness) or terminate the Commitments, it shall
not incur any such Indebtedness or terminate the Commitments or
this Agreement unless the Borrower has paid in full, in Cash all
Prior Indebtedness incurred during the period from June 16, 1995
and the Petition Date in accordance with that certain letter
agreement dated as of June 16, 1995 among the Borrower, the Lenders
and the Agent.
5.16 Certain Post-Closing Matters.
(a) Cortland Distribution Property. If the X.X.
Xxxxxx Contract is terminated or if the sale of the Cortland
Distribution Property is not consummated in accordance with the
terms of the X.X. Xxxxxx Contract, shall promptly execute a
mortgage with respect to the Cortland Distribution Property
substantially in the form of the Mortgage and shall deliver with
respect to the Cortland Distribution Property each of the items set
forth in Section 4.1(n) with respect to the Cortland Warehouse
Property.
(b) SCC UK. Without limiting the generality of
subsection 5.12, prior to the entry of the Final Borrowing Order,
the Borrower shall cause SCC UK to execute such documents and take
such actions as are necessary to grant a security interest in its
property to secure its obligations under the Subsidiary Guaranty.
(c) SCC Singapore. Prior to the entry of the Final
Borrowing Order, the Borrower shall cause SCC Singapore to execute
a counterpart of the Subsidiary Guaranty and such documents and
instruments as are necessary, or that the Lenders may reasonably
request, to grant a security interest in SCC Singapore's property
in favor of the Agent, on behalf of the Lenders, to secure the
Obligations; provided that, if the laws applicable to SCC Singapore
prohibit the execution of such documents, or otherwise make any
such guaranty or security interest illegal, invalid or otherwise
ineffective to accomplish the purposes of this subsection 2.25,
then the Borrower shall, upon the request of the Lenders, take such
actions and execute such documents as are reasonably necessary to
add SCC Singapore as a borrower under the Credit Agreement and the
other Loan Documents.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the
Commitments remain in effect, any Note or any Letter of Credit
remains outstanding and unpaid or any other amount is owing to any
Lender or the Agent hereunder, the Borrower shall not, and (except
with respect to subsection 6.1) shall not permit any of its
Subsidiaries to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Maximum Inventory. Permit the aggregate amount of Inventory
of the Borrower and its Subsidiaries, calculated on a consolidated
basis in accordance with GAAP, as of the last day of any Fiscal
Month set forth below to be greater than the corresponding amount
set forth below:
Fiscal Month Amount
August 1995 $ 64,400,000
September 1995 $ 62,100,000
October 1995 $ 61,000,000
; provided that unless a Business Plan Event has occurred, this
subsection 6.1(a) shall be automatically amended on September 15,
1995 to add applicable covenant amounts, which shall be the
covenant amounts contained in the Business Plan, for each fiscal
month during the remaining term of this Agreement.
(b) Maximum Cash Disbursements. (i) Permit the
aggregate amount of Cash disbursements, measured on a consolidated
basis for the Borrower and its Subsidiaries, for any fiscal month
set forth below to be greater than the corresponding amount
indicated below:
Fiscal Month Amount
July 1995 $ 11,973,000
August 1995 $ 9,266,000
September 1995 $ 15,207,000
; provided that, unless a Business Plan Event shall have occurred,
the covenant set forth in this clause (i) of this subsection shall
be automatically amended on September 15, 1995 to add applicable
covenant amounts, which shall be the covenant amounts contained in
the Business Plan, for each of the fiscal months in the remaining
term of this Agreement.
(ii) If a Business Plan Event shall have occurred,
permit the aggregate Cash disbursements, measured on a consolidated
basis for the Borrower and its Subsidiaries, for any fiscal month
occurring during the remaining term of this Agreement to be greater
than the sum of (A) the average of the aggregate Cash disbursements
for the three consecutive fiscal months preceding the applicable
fiscal month plus (B) $1,000,000.
6.2 Limitation on Indebtedness. Create, incur, assume
or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement;
(b) Indebtedness of the Borrower to any Subsidiary and
of any Subsidiary to the Borrower or any other Subsidiary; and
(c) Borrower may become and remain liable with
respect to Prepetition Indebtedness without giving effect to any
extensions, renewals, refinancings, supplemental borrowings or
other incurrences thereof, it being understood that all such
Indebtedness shall be permitted under this clause (c) only to the
extent listed on Schedule 6.2 hereto.
6.3 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 created pursuant to the Security
Agreement;
(b) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that
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;
(c) 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;
(d) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(e) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(f) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and which do
not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct
of the business of the Borrower or such Subsidiary;
(g) Liens in existence on the date hereof listed on
Schedule 6.3, securing Indebtedness permitted by subsection
6.2(c), 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;
(h) Liens securing Indebtedness of the Borrower and
its Subsidiaries permitted by subsection 6.2 incurred to finance
the acquisition of fixed or capital assets, provided that (i) such
Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not
at any time encumber any property other than the property financed
by such Indebtedness, (iii) the amount of Indebtedness secured
thereby is not increased and (iv) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed 80%
of the lesser of the original purchase price of such property or
the fair value (as determined in good faith by the board of
directors of the Borrower) of such property at the time it was
acquired;
(i) Liens arising solely as a result of precautionary
filings of UCC financing statements in respect of personal property
leased pursuant to operating leases; and
(j) Liens on Inventory granted after the Effective
Date to secure claims to freight forwarders not in excess of
$250,000 in the aggregate, provided that such Liens shall be
subordinate to the Liens granted herein to the Lenders and shall
cover Inventory having a value at the lower of cost or market not
more than 110% of such obligations
6.4 Limitation on Guarantee Obligations. Create,
incur, assume or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the
date hereof and listed on Schedule 6.4;
(b) Guarantee Obligations in respect of Indebtedness
incurred pursuant to subsection 6.2(d);
(c) guarantees made in the ordinary course of its
business by the Borrower of obligations of any of its Subsidiaries,
which obligations are otherwise permitted under this Agreement; and
(d) Guarantee Obligations of the Subsidiary Guarantors
pursuant to the Subsidiary Guaranty.
6.5 Limitation on Fundamental Changes. Merge into or
consolidate with any other Person in a transaction in which the
Borrower is not the surviving entity, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or,
except as expressly permitted under subsection 6.6(b), convey,
sell, lease, assign, transfer or otherwise dispose of, all or
substantially all of its property, business or assets, or, except
as expressly permitted under subsection 6.8, purchase, lease or
otherwise acquire all or substantially all of the assets of any
other Person, or make any material change in its present method of
conducting business, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with any one or more wholly owned Subsidiaries of the
Borrower (provided that the wholly owned Subsidiary or Subsidiaries
shall be the continuing or surviving corporation);
(b) any wholly owned Subsidiary may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or any other
wholly owned Subsidiary of the Borrower; and
(c) the Borrower and any Subsidiary of the Borrower
may purchase inventory in the ordinary course of business.
6.6 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, issue or
sell any shares of such Subsidiary's Capital Stock to any Person
other than the Borrower or any wholly-owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn
out property in the ordinary course of business;
(b) the sale of Inventory in the ordinary course of
business;
(c) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection
with the compromise or collection thereof;
(d) the sale or other disposition of property
(other than Inventory), provided that (i) such property shall be
disposed of for not less than fair market value and (ii) the net
proceeds (excluding proceeds pursuant to the X.X. Xxxxxx Contract)
of all such dispositions from and after the Effective Date shall
not exceed $500,000; and
(e) as permitted by subsection 6.5(b).
6.7 Limitation on Dividends. Declare or pay any
dividend (other than dividends payable solely in 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 Stock, whether now or
hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property
or in obligations of the Borrower or any Subsidiary (all of the
foregoing, ``Restricted Payments''); provided that any Subsidiary
of the Borrower may make Restricted Payments to the Borrower.
6.8 Limitation on Capital Expenditures. Make or
commit to make (by way of the acquisition of assets or securities
of a Person or otherwise) any expenditure in respect of the
purchase or other acquisition of fixed or capital assets (excluding
any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) except
for expenditures for assets and acquisitions of securities not
exceeding (a) $500,000 in the aggregate for the Borrower and its
Subsidiaries during the period from June 30, 1995 to and including
December 31, 1995 and (b) $500,000 in the aggregate for the
Borrower and its Subsidiaries during the period from January 1,
1996 to and including June 30, 1996; provided, the acquisition by
the Borrower of the building covered by the X.X. Xxxxxx Contract
for the approximate amount of $550,000 (approximately $250,000 of
which will be in cash, and the balance of which will result from
the assumption by the Borrower of the existing first mortgage
encumbering such building) shall not be regarded as a capital
expenditure for purposes of the above restriction.
6.9 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, any Person, except :
(a) extensions of trade credit in the ordinary course
of business;
(b) Permitted Investments; and
(c) subject to subsection 6.8, investments by the
Borrower in its wholly owned Subsidiaries now or hereafter existing
and loans and advances made by the Borrower to its wholly owned
Subsidiaries in the ordinary course of the Borrower's business to
the extent authorized by the Bankrupcty Court.
6.10 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, (b) in the ordinary
course of the Borrower's or such Subsidiary's business and (c) upon
fair and reasonable 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.
6.11 Limitation on Sales and Leasebacks. Enter into
any arrangement with any Person providing for the leasing by the
Borrower or any Subsidiary of real or personal property which has
been or is to be sold or transferred by the Borrower or 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.
6.12 Limitation on Changes in Fiscal Year. Permit the
fiscal year of the Borrower to end on a day other than June 30.
6.13 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for the
business in which the Borrower is presently engaged or similar or
related businesses.
6.14 Limitation on Negative Pledge Clauses. Enter
into any agreement with any Person other than the Lenders pursuant
to this Agreement or any other Loan Document which prohibits or
limits the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter
acquired; provided that, the Borrower may enter into such an
agreement in connection with any Lien permitted by this Agreement,
when such prohibition or limitation is by its terms effective only
against the assets subject to such Lien.
6.15 Chapter 11 Claims. Without limiting the
provisions of subsection 6.3 hereof, incur, create, assume, suffer
or permit any claim or Lien or encumbrance against it or any of its
property or assets in any Chapter 11 Case (other than the claims
specifically referred to in subsections 2.23 (i) and (ii) but only
to the extent therein described) pari passu with or senior to the
claims and Liens of the Agent and the Lenders against the Borrower
in respect of the Obligations hereunder, or apply to the Court for
authority to do so, except to the extent expressly permitted
herein.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal of,
or interest on, any Note or any Reimbursement Obligation or any
other amount payable hereunder when due in accordance with the
terms thereof or hereof; or
(b) Any representation or warranty made or deemed made
by the Borrower herein or which is contained in any certificate,
document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any 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) The Borrower shall default in the observance or
performance of any agreement contained in Section 6; or
(d) The Borrower 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), and such default shall continue
unremedied for a period of 10 days; or
(e) The Borrower or any of its Subsidiaries shall
(i) default in any payment of principal of or interest on any
Indebtedness (other than the Notes, Prepetition Indebtedness,
amounts payable to employees of any Subsidiary and accounts payable
of the Subsidiaries of Borrower incurred by such Subsidiaries in
the ordinary course) or in the payment of any Guarantee Obligation,
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 provided that, the
aggregate principal amount of such Indebtedness or Guarantee
Obligation shall be greater than $100,000; or (ii) default in the
observance or performance of any other agreement or condition
relating to any such Indebtedness or Guarantee Obligation or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is
to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such 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 if required,
such Indebtedness to become due prior to its stated maturity or
such Guarantee Obligation to become payable; or
(f) (i) Any Person shall engage in any ``prohibited
transaction'' (as defined in Section 406 of ERISA or Section 4975
of the Code) involving any Plan, (ii) any ``accumulated funding
deficiency'' (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the 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, or any Single Employer
Plan shall terminate, which Reportable Event or commencement of
proceedings, appointment of a trustee or termination is, in the
reasonable opinion of the Required Lenders, likely to result in the
imposition of a Lien on any property of the Borrower, (iv) the
Borrower or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency
or Reorganization of, a Multiemployer Plan or (v) any other event
or condition shall occur or exist with respect to a Plan (other
than the fact of termination of a Plan), and in each case in
clauses (i) through (iv) above, such event or condition, together
with all other such events or conditions, if any, could have a
Material Adverse Effect; or
(g) One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of
$100,000 or more (with respect to the Borrower) or $300,000 or more
(with respect to the Subsidiaries of the Borrower), and all such
judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 60 days from the entry
thereof; or
(h) There shall have occurred a Change in Control; or
(i) Xxxxxx X. Xxxxxxx shall cease to be the President
and Chief Executive Officer of the Borrower or shall at any time
fail to have, in any material respect, any of the authority
associated on the Effective Date with the positions of President
and Chief Executive Officer; or
(j) (i) The entry of an order authorizing the Borrower
in the Chapter 11 Case to obtain additional financing under Section
364(c) or (d) or the Bankruptcy Code, or authorizing any Person to
recover from any portions of the Collateral any costs or expenses
of preserving or disposing of such Collateral under Section 506(c)
of the Bankruptcy Code, or authorizing the use of Cash Collateral
without Requisite Lenders prior written consent under Section
363(c) of the Bankruptcy Code; (ii) the appointment of an interim
or permanent trustee in the Chapter 11 Case or the appointment of
an examiner in the Chapter 11 Case with expanded powers to operate
or manage the financial affairs, the business, or reorganization of
any Credit Party; (iii) the dismissal of the Chapter 11 Case, or
the conversion of the Chapter 11 Case to a case under Chapter 7 of
the Bankruptcy Code; (iv) the entry of an order granting relief
from or modifying the automatic stay of Section 362 of the
Bankruptcy Code with respect to obligations in an aggregate amount
in excess of $200,000 (a) to allow any creditor to execute upon or
enforce a Lien on any Collateral or on any other property or assets
of the Borrower or (b) with respect to any Lien of, or the granting
of any Lien on any Collateral or any other property or assets of
the Borrower or any of its Subsidiaries to, any State or local
environmental or regulatory agency or authority; (v) the entry of
an order amending, supplementing, staying, vacating or otherwise
modifying the Interim Borrowing Order or the Final Borrowing Order,
as applicable, or this Agreement or any other Loan Document or any
of the Agent's or Lenders' rights, benefits, privileges or remedies
under the Borrowing Order, this Agreement or any other Loan
Document, in any case without the Required Lenders' prior consent;
(vi) an order shall be entered approving, or there shall arise, any
other administrative expense claim (other than those specifically
referred to in subsection 2.23) having any priority over, or being
pari passu with the administrative expenses priority of the
Obligations in respect of the Chapter 11 Case;
then, and in any such event, either or both of the following
actions may (notwithstanding the provisions of Sections 105 and 362
of the Bankruptcy Code and without application or motion to, or
order from, the Court) be taken: (i) with the consent of the
Required Lenders, the Agent may, or upon the request of the
Required Lenders, the Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the consent
of the Required Lenders, the Agent may, or upon the request of the
Required Lenders, the 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 the Notes to be
due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any
kind are hereby expressly waived.
Further, upon the occurrence and during the continuance
of any Event of Default, the Agent may exercise all rights and
remedies of the Agent set forth in the Security Agreement, in
addition to all rights and remedies allowed by applicable laws of
the United States and of any state thereof, including but not
limited to the Uniform Commercial Code; provided that, any other
provision of this Agreement or any other Loan Document to the
contrary notwithstanding, with respect to the foregoing, the Agent
shall give the Borrower and counsel to any official committees in
respect of the Chapter 11 Case three Business Days' prior notice
(which notice shall be delivered by facsimile or overnight courier)
of the exercise of its rights and remedies with respect to the
collateral granted pursuant to the Security Agreement or any other
Loan Documents and file a copy of such notice with the clerk of the
Court.
Neither the Agent nor the Lenders shall have any
obligation of any kind to make a motion or application to the
Bankruptcy Court to exercise their rights and remedies set forth or
referred to in this Agreement or in the other Loan Documents.
With respect to all Letters 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
shall at such time deposit in a cash collateral account opened by
the Agent an amount equal to 105% of the aggregate then undrawn and
unexpired amount of such Letters of Credit. The Borrower hereby
grants to the 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 the Borrower under this Agreement and the
other Loan Documents. Amounts held in such cash collateral account
shall be applied by the Agent to the payment of drafts drawn under
such Letters 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 the Notes. After all such 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 the Notes shall have been paid in
full, the balance, if any, in such cash collateral account shall be
returned to the Borrower. The Borrower shall execute and deliver
to the Agent, for the account of the Issuing Lender and the L/C
Participants, such further documents and instruments as the Agent
may request to evidence the creation and perfection of the within
security interest in such cash collateral account.
SECTION 8. THE AGENT
8.1 Appointment. Each Lender hereby irrevocably
designates and appoints Chemical Bank as the Agent of such Lender
under this Agreement and the other Loan Documents, and each Lender
irrevocably authorizes Chemical Bank, as the 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 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 Agent shall not have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist
against the Agent.
8.2 Delegation of Duties. The 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 Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys in-fact selected by it with reasonable
care.
8.3 Exculpatory Provisions. Neither the Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection
with this Agreement or any other Loan Document (except for its or
such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower 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 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 the Notes or any other Loan
Document or for any failure of the Borrower to perform its
obligations hereunder or thereunder. The Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Borrower.
8.4 Reliance by Agent. The 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 Agent.
The 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
Agent. The Agent shall be fully justified 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 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 Agent shall in
all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the Notes and the other Loan
Documents in accordance with a request of the Required Lenders, and
such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future
holders of the Notes.
8.5 Notice of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the 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 Agent
receives such a notice, the Agent shall give notice thereof to the
Lenders. The Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the
Required Lenders; provided that unless and until the Agent shall
have received such directions, the 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.
8.6 Non-Reliance on Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and
that no act by the Agent hereinafter taken, including any review of
the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender
represents to the Agent that it has, independently and without
reliance upon the Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Agent or any
other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders
by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other
information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness
of the Borrower which may come into the possession of the Agent or
any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
8.7 Indemnification. The Lenders agree to indemnify
the Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to
do so), ratably according to their respective Commitment
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 Commitments shall have terminated and
the Loans shall have been paid in full, and the L/C Obligations
have been cash collateralized ratably in accordance with their
Commitment 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 Notes) be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of this Agreement, any
of the other Loan Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated
hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender
shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Agent's
gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Notes and all other
amounts payable hereunder.
8.8 Agent in Its Individual Capacity. The Agent and
its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as
though the Agent were not the Agent hereunder and under the other
Loan Documents. With respect to its Loans made or renewed by it
and any Note issued to it and with respect to any Letter of Credit
issued or participated in by it, the Agent 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 it were not the
Agent, and the terms ``Lender'' and ``Lenders'' shall include the
Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent
upon 10 days' notice to the Lenders and the Borrower. If the Agent
shall resign as Agent under this Agreement and the other Loan
Documents, then the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent
shall be approved by the Borrower, whereupon such successor agent
shall succeed to the rights, powers and duties of the Agent, and
the term ``Agent'' shall mean such successor agent effective upon
such appointment and approval, and the former Agent's rights,
powers and duties as Agent shall be terminated, without any other
or further act or deed on the part of such former Agent or any of
the parties to this Agreement or any holders of the Notes. After
any retiring Agent's resignation as 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 Agent under this Agreement
and the other Loan Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement,
any Note or 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 Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto and to the
Notes and the other Loan Documents for the purpose of adding any
provisions to this Agreement, the Notes or the other Loan Documents
or changing in any manner the rights of the Lenders or of the
Borrower hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Agent, as the case may
be, may specify in such instrument, any of the requirements of this
Agreement, the Notes 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 Note or of any installment thereof, or reduce the stated rate
of any interest or fee payable hereunder or extend the scheduled
date of any payment thereof or increase the amount or extend the
expiration date of any Lender's Commitment, in each case without
the consent of each Lender affected thereby, or (ii) amend, modify
or waive any provision of this subsection or reduce the percentage
specified in the definition of Required Lenders, or consent to the
assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents or
release any material portion of the Collateral (as defined in the
Security Agreement), in each case without the written consent of
all the Lenders, or (iii) amend, modify or waive any provision of
Section 8 without the written consent of the then Agent. Any such
waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the
Borrower, the Lenders, the Agent and all future holders of the
Notes. In the case of any waiver, the Borrower, the Lenders and
the Agent shall be restored to their former position and rights
hereunder and under the outstanding Notes and any other Loan
Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
9.2 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 3 days after being deposited in the
mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Agent, and as set forth on the applicable signature page hereto 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 Notes:
The Borrower: Xxxxx Xxxxxx Corporation
00 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxxxxxxxxx
Attention: Xxxx Xxxxxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
With a copy to: Xxxxxxx X. Xxxxxx, Esq.
Winthrop, Stimson, Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
With a copy to: Xxxxx Xxxxxx, Esq.
Young, Conaway, Stargatt & Xxxxxx
Eleventh Floor
Xxxxxx Square North
X.X. Xxx 000
Xxxxxxxxxx, XX 00000-0000
The Agent: Chemical Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx III
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
With a copy to: Chemical Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx
Telecopy: (000) 000-0000
With a copy to: O'Melveny & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
With a copy to: Potter, Xxxxxxxx & Xxxxxxx
350 Delaware Trust Building
000 Xxxxxx Xxxxxx, Xxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
provided that any notice, request or demand to or upon the Agent or
the Lenders pursuant to subsection 2.3, 2.5, 2.6, 2.7 or 2.12 shall
not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the 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.
9.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the Notes and the
making of the Loans hereunder until all obligations of the Borrower
hereunder have been discharged.
9.5 Payment of Expenses and Taxes. The Borrower agrees
(a) to pay or reimburse the Agent and each Lender, promptly upon
presentation of statements, for all its out-of-pocket costs and
expenses incurred in connection with the negotiation, development,
preparation and execution of, and any amendment, supplement or
modification to, this Agreement, the Notes and the other Loan
Documents and any other documents prepared in connection herewith
or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees and disbursements of counsel and
financial advisors to the Agent, (b) to promptly pay or reimburse
each Lender and the Agent for all of their costs and expenses
incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes, the other Loan Documents
and any such other documents, including, without limitation, the
fees and disbursements of counsel and financial advisors to the
Agent and to the several Lenders (including, without duplication,
the allocated cost of in-house counsel), (c) to promptly pay,
indemnify, and hold each Lender and the Agent harmless from, any
and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise
and other 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 Notes, the other Loan Documents and any such other documents,
(d) to promptly pay or reimburse each Lender and the Agent for all
of their costs and expenses incurred in the Chapter 11 Case
(including, without limitation, the on-going monitoring by the
Agent of the Chapter 11 Case, including attendance by the Agent and
their counsel at hearings or other proceedings and the on-going
review of documents filed with the Court in respect thereof) and
the Agent's and Lenders' interests with respect to the Borrower
(including, without limitation, the on-going review of the
Borrower's business, assets, operations, prospects or financial
condition as the Agent shall deem necessary), the Collateral or the
Obligations, (e) to pay, indemnify, and hold each Lender and the
Agent harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever
with respect to the Chapter 11 Case or the execution, delivery,
enforcement, performance and administration of this Agreement, the
Notes, the other Loan Documents and any such other documents,
including, without limitation, any of the foregoing relating to the
violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower, any
of its Subsidiaries or any of the Properties (all the foregoing in
this clause (d), collectively, the ``indemnified liabilities''),
provided that the Borrower shall have no obligation hereunder to
the Agent or any Lender with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of the
Agent or any such Lender. The agreements in this subsection shall
survive repayment of the Notes and all other amounts payable
hereunder.
9.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure
to the benefit of the Borrower, the Lenders, the Agent, all future
holders of the Notes and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its
rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law,
at any time sell to one or more banks or other entities (each a
``Participant'') participating interests in any Loan owing to such
Lender, any Note held by such Lender, any 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 Note for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other
Loan Documents. The Borrower agrees that if amounts outstanding
under this Agreement and the Notes are due or unpaid, or shall have
been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed
to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement and any Note to the
same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement or any Note,
provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in subsection 9.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees
that each Participant shall be entitled to the benefits of
subsections 2.10 and 2.11 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if it
was a Lender; provided that, in the case of subsection 2.15, such
Participant shall have complied with the requirements of said
subsection and provided further that no Participant shall be
entitled to receive any greater amount pursuant to any such
subsection than the transferor Lender would have been entitled to
receive in respect of the amount of the participation transferred
by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may, in the ordinary course of its
commercial banking 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 consent of the Borrower and the
Agent (which in each case shall not be unreasonably withheld), to
an additional bank or financial institutions (an ``Assignee'') all
or any part of its rights and obligations under this Agreement and
the Notes in an aggregate principal amount not less than
$10,000,000 pursuant to an Assignment and Acceptance, substantially
in the form of Exhibit C, 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 Agent) and
delivered to the Agent for its acceptance and recording in the
Register. Upon such execution, delivery, acceptance and recording,
from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a
party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment as set forth therein, and (y) the assigning
Lender thereunder shall, to the extent provided in such Assignment
and Acceptance, be released from its obligations under this
Agreement (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).
(d) The Agent shall maintain at its address referred to
in subsection 9.2 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
Commitment of, and principal amount of the Loans owing to, each
Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Agent and the Lenders may treat each Person whose name is recorded
in the Register as the owner of the Loan recorded therein for all
purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case
of an Assignee that is not then a Lender or an affiliate thereof,
by the Agent) together with payment to the Agent of a registration
and processing fee of $2,000, the Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and
recordation to the Lenders and the Borrower. On or prior to such
effective date, the Borrower, at its own expense, shall execute and
deliver to the Agent (in exchange for the Revolving Credit Note of
the assigning Lender) a new Revolving Credit Note to the order of
such Assignee in an amount equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning
Lender has retained a Commitment hereunder, a new Revolving Credit
Note, to the order of the assigning Lender in an amount equal to
the Commitment retained by it hereunder. Such new Notes shall be
dated the Effective Date or the Termination Date, as the case may
be, and shall otherwise be in the form of the Note replaced
thereby.
(f) The Borrower authorizes each Lender to disclose to
any Participant or Assignee (each, a ``Transferee'') and any
prospective Transferee any and all financial information in such
Lender's possession concerning the Borrower and its 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 the Borrower and its Affiliates prior
to becoming a party to this Agreement.
(g) Nothing herein shall prohibit any Lender from
pledging or assigning any Note to any Federal Reserve Bank in
accordance with applicable law.
9.7 Adjustments; Set-off. (a) If any Lender (a
``Benefitted Lender'') shall at any time receive any payment of all
or part of its Loans, 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 7(f), or otherwise), 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 Loans or
the Reimbursement Obligation owing to it, or interest thereon, such
benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's
Loan or the Reimbursement Obligation 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
the Borrower to the extent permitted by applicable law, upon any
amount becoming due and payable by the Borrower hereunder or under
the Notes (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against 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 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 the Borrower and the 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.
9.8 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 said counterparts
taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrower and the Agent.
9.9 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.
9.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Agent and
the Lenders with respect to the subject matter hereof, and there
are no promises, undertakings, representations or warranties by the
Agent or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Loan
Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND
THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Acknowledgements. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the Notes and the
other Loan Documents;
(b) neither the Agent nor any 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 Agent and Lenders, on 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 among the Lenders or among the Borrower and the
Lenders.
9.13 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
9.14 Parties Including Trustees; Court Proceedings.
This Agreement and the other Loan Documents shall be binding upon,
and inure to the benefit of, the successors of Agent and each
Lender, and the assigns, transferees and endorsees of the Agent and
each Lender. The security interests and Liens created in this
Agreement and the other Loan Documents shall be and remain valid
and perfected, and the claims of the Agent and Lenders hereunder
valid and enforceable in accordance with the terms hereof,
notwithstanding the discharge of the Borrower pursuant to 11 U.S.C.
article 1141, the conversion of the Chapter 11 Case or any other
bankruptcy case of the Borrower to a case under Chapter 7 of the
Bankruptcy Code, the dismissal of the Chapter 11 Case or any
subsequent Chapter 7 case or the release of any Collateral from the
property of the Borrower. Further, the security interests and
Liens created in this Agreement and the other Loan Documents shall
be and remain valid and perfected without the necessity that the
Agent file financing statements or otherwise perfect the Lenders'
security interests or Liens under applicable law. This Agreement,
the claims of the Agent and Lenders hereunder, and all security
interests or Liens created hereby or pursuant hereto or by or
pursuant to any other Loan Document shall at all times be binding
upon the Borrower, the estate of the Borrower and any trustee
appointed in the Chapter 11 Case or any Chapter 7 case, or any
other successor in interest to the Borrower. This Agreement shall
not be subject to Section 365 of the Bankruptcy Code.
[Remainder of page intentionally left blank.]
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.
XXXXX XXXXXX CORPORATION,
as Debtor and Debtor-In-Possession
By:
Title:
CHEMICAL BANK,
as Agent and as a Lender
By:
Title:
BANK OF AMERICA ILLINOIS
By:
Title:
Address:
SCHEDULE 1.1
COMMITMENTS
Commitment
Bank Commitment Percentage
CHEMICAL BANK $15,000,000 62.50%
BANK OF AMERICA ILLINOIS $ 9,000,000 37.50%
___________ __________
$24,000,000 100%
SCHEDULE 2.12
EXISTING LETTERS OF CREDIT
Number Amount Expiration
6010523 $357,549.50 8/24/95
6076318 $190,950.00 10/16/95
6088712 $411,000.00 7/31/95
6977429 $29,840.00 7/15/95
SCHEDULE 3.9
CERTAIN INTELLECTUAL PROPERTY MATTERS
XXXXX CORONA - U.S. PATENTS
T-NO. TITLE INVENTOR XXX. NO. ISSUE DATE EXPIRE
T-206 DUAL SEGMENT CONT. XXXXXXXXXXX 4131374 12/26/78 12/26/95
MOTION RIBBON FEED
MECHANISM
T-208 RIBBON FEED MECH. XXXXXXXXXXX 4140407 02/20/79 02/20/96
RESPONSIVE TO CASE XXXXXXXX
SHIFT MECHANISM
T-213 TYPEWRITER SPIRAL XXXX 4149809 04/17/79 04/17/96
DISC PRINTER
T-191 LOW SILHOUETTE DANNATT 4188137 02/12/80 02/12/97
KEYBOARD
T-216 TYPEWRITER KEY XXXXXXX 4191483 03/04/80 03/04/97
ACTION
T-218 PLATEN VARIABLE XXXXX 4235556 11/25/80 11/25/97
XXXXXX
T-214 MULTI BAR ENCODING XXXXXXX 4258356 03/24/81 03/24/98
APPARATUS UTILIZING
ACOUSTIC ENERGY
T-217 KEY MECHANISM LONGROD 4269521 05/26/81 05/26/98
HAVING SNAP ACTION
T-226 ACOUSTIC XXXXXX 4311991 01/19/82 01/19/99
TRANSMISSION
T-233 RELEASABLE RIBBON CAPPOTTO 4337001 06/29/82 06/29/99
LOCKING DEVICE IN A
RIBBON CARTRIDGE
T-223 ELECTRIC MOTOR XXXXX 4340830 07/20/82 07/20/99
-XXXXXXXX
T-246 HALFSPACE CONTROL XXXXX 4408918 10/11/83 10/11/00
SYSTEM FOR ELECTRONIC
TYPEWRITER WITH
CORRECTION REGISTER
T-280 AUTOMATIC WORD XXXXXXXXX 4561793 12/31/85 12/31/02
CORRECTING SYSTEM
T-290 ONE-TOUCH CHARACTER XXXX 4585362 04/29/86 04/29/03
CORRECTION AND RE-
PLACEMENT SYSTEM
T-300 SPELLING ERROR XXXXX 4655620 04/07/87 04/07/04
FINDING FEATURE XXXX
INCLUDING AN
ELECTRONIC SPELLING
DICTIONARY
T-304 RIGHT MARGIN ZONE XXXXXX 4678351 07/07/87 07/07/04
HYPHENATION
T-310 PRINT HAMMER XXXXXX 4743128 05/10/88 05/10/05
SOLENOID XXXXXXX
CONDITIONED SINGLE
SOLENOID RIBBON AND
TAPE FEED SYSTEM
T-305 SOLENOID DEVICE XXXXXX 4745386 05/17/88 05/17/05
T-307 PRINTING ELEMENT XXXXXXX 4746235 05/24/88 05/24/05
HOMING DEVICE XXXXXX
T-308 TYPEWRITER LID XXXXXXX 4768891 09/06/88 09/06/05
ACTUATED PRINTING
ELEMENT HOMING
AND CARRIER
REPOSITIONING DEVICE
T-291 COMPACT SPELLING XXXX 4782464 11/01/88 11/01/05
-CHECK XXXXX
DICTIONARY XXXXXX
T-292 SPELLING CHECK XXXX 4783761 11/08/88 11/08/05
DICTIONARY WITH XXXXX
EARLY ERROR SIGNAL XXXXXX
T-299 WORD PROCESSOR XXXXXX 4797855 01/10/89 01/10/06
HAVING SPELLING XXXX
CORRECTOR XXXXXXXX
ADAPTIVE TO OPERATOR
ERROR EXPERIENCE
T-301 DICTIONARY MEMORY XXXXXX 4807181 02/21/89 02/21/06
WITH VISUAL XXXXX
SCANNING FROM A XXXX
SELECTABLE STARTING
POINT
T-314 ELECTRONIC KEYBOARD XXXXXX 4818828 04/04/89 04/04/06
LONGROD
T-316 DICTIONARY XXXXX 4847766 07/11/89 07/11/06
TYPEWRITER WITH XXXXXXX
CORRECTION OF
COMMONLY CONFUSED
WORDS
T-328 KEYBUTTON GUIDE XXXXXX 4855548 08/08/89 08/08/06
ASSY FOR A KEYBOARD LONGROD
T-324 TAPE CASSETTE FOR XXXXXXX 4886383 12/12/89 12/12/06
METERING CORRECTION
TAPE FEED
T-327 RIBBON TENSIONING CAPPOTTO 4886385 12/12/89 12/12/06
MECH.
T-326 PUNCTUATION CHECK XXXXX 4887920 12/19/89 12/19/06
FEATURE FOR AN XXXXXXX
ELECTRONIC
TYPEWRITER
T-317 MEMORY TYPEWRITER XXXXX 4888730 12/19/89 12/19/06
WITH COUNT OF XXXXXXX
OVERUSED WORDS
T-322 INK RIBBON AND XXXXXXX 4900171 02/13/90 02/13/07
CORRECTION TAPE CAPPOTTO
CASSETTE CAPABILITY
T-311 AUTO-REALIGNED PRINT XXXXXX 4907900 03/13/90 03/13/07
CORRECTION
T-325 THESAURUS FEATURE XXXXXXXXX 4923314 05/08/90 05/08/07
FOR ELECTRONIC XXXXXXX
TYPEWRITERS
T-329C PLURAL CASSETTES XXXXXXX 4971462 11/20/90 11/20/07
HAVING COMPATIBILITY CAPPOTTO
ARRANGEMENT
T-331 PRINT CARRIER RACK LONGROD 4976556 12/11/90 12/11/07
DRIVE
T-343 PLAIN PAPER CARTRIDGE XXXXXX 5057930 10/15/91 10/15/08
FOR FACSIMILE MACHINE
T-330 ELECTRONIC XXXXXX 5060154 10/22/91 10/22/08
TYPEWRITER OR WORD
PROCESSOR WITH
DETECTION AND/OR
CORRECTION OF
SELECTED PHRASES
T-344 THERMAL PAPER XXXXXX 5060076 10/21/91 10/21/08
CARTRIDGE FOR
FACSIMILE MACHINE
T-347 RIBBON CASSETTE WITH XXXXXXXX 5074689 12/24/91 12/24/08
CIP INTEGRAL PAPER GUIDE
T-342 FACSIMILE CARTRIDGE XXXXXX 5089897 02/18/92 02/12/09
SYSTEM
T-347 RIBBON CASSETTE WITH XXXXXXXX 5098208 03/24/92 03/24/09
CONT INTEGRAL PAPER GUIDE
T-349 THERMAL PRINT HEAD XXXXXXXX 5106213 04/21/92 04/21/09
CONTROL MECHANISM XXXXXX
T-352 BRAKE MECHANISM XXXXXXX 5109573 05/05/92 05/05/09
FOR A PIVOTABLE
CHARACTER DISPLAY
T-362 INTEGRAL LOCKING BARON 5158382 10/27/92 10/27/09
DEVICE FOR A XXXXXXXX, JR.
TYPEWRITER
T-346 HINGE FOR USE WITH XXXXXXX 5165145 11/24/92 11/24/09
PORTABLE ELECTRONIC
APP.
T-361 PRINTING DEVICE XXXXXXXX 5174666 12/29/92 12/29/09
HAVING PRINTWHEEL XXXXXXX
COUPLING MEANS
T-363 PRINTING MECHANISM XXXXXX 5174671 12/29/92 12/29/92
WITH PRINT HAMMER XXXXXX
HAVING NOISE XXXXXXXX, JR.
DAMPENER
T-358 QUIET IMPACT XXXXXX 5183344 02/02/93 02/02/10
PRINTER MECH. XXXXXX
XXXXX
X-000 QUIET IMPACT. XXXXXX 5199804 04/06/93 04/06/10
CIP PRINTER MECH XXXXXX
T-329C4CASSETTE HAVING CAPPOTTO 5267803 12/07/93 12/07/10
COMPATIBILITY
ARRANGEMENT
T-368 MINIATURE KEYBOARD SMILEY 5383735 01/24/95 01/24/12
DIV
XXXXX XXXXXX - U.S. DESIGN PATENTS
ISSUE
T-NO. TITLE INVENTOR XXX. NO. DATE EXPIRE
TD-225 CARRYING CASE FOR A XXXXXXXXX D259,975 07/28/81 07/28/95
TYPEWRITERS
TD-224 TYPEWRITER XXXXXXXXX D262,036 11/24/81 11/24/95
TD-227 RIBBON CARTRIDGE CHRISTIE D265,566 07/27/82 07/27/96
CAPPOTTO
TD-238 RIBBON CARTRIDGE CHRISTIE D265,567 07/27/82 07/27/96
CAPPOTTO
TD-241 TYPEWRITER XXXXXXXX D266,674 10/26/82 10/26/96
TD-236 PRINT ELEMENT XXXXXXX D266,742 11/02/82 11/02/96
CONTAINER
TD-240 CONTROL KNOB FOR XXXXXXXX D267,254 12/14/82 12/14/96
OFFICE MACHINES
TD-248 RIBBON CARTRIDGE XXXXX D267,542 01/11/83 01/11/97
SHIPPING TRAY
TD-262 CONTROL KNOB FOR AN XXXXXXXX D268,846 05/03/83 05/03/97
OFFICE MACHINE
TD-260 PRINTER XXXXXXXXX D269,346 06/14/83 06/14/97
TD-259 CASE FOR A XXXXXXXXX D269,647 07/12/83 07/12/97
TYPEWRITER
TD-258 TYPEWRITER XXXXXXX D270,070 08/09/83 08/09/97
XXXXXXXX
XX-255 TYPEWRITER XXXXXXX D270,545 09/13/83 09/13/97
TD-273 TYPEWRITER XXXXXXXX D271,024 10/18/83 10/18/97
TD-275 TYPEWRITER XXXXXXXX D277,968 03/12/85 03/12/99
TD-278 TYPEWRITER XXXXXXXXX D281,253 11/05/85 11/05/99
TD-281 TYPEWRITER XXXXXXXX D281,509 11/26/85 11/26/99
TD-293 RIBBON CASSETTE CAPPOTTO D289,529 04/28/87 04/28/01
XXXXXXXXX
XX-297 TYPEWRITER XXXXXX D289,902 05/19/87 05/19/01
TD-294 TYPEWRITER LID XXXXXX D290,468 06/23/87 06/23/01
XXXXXX
XX-303 TYPEWRITER XXXXXXXXXX D301,041 05/09/89 05/09/03
TD-323 RIBBON CASSETTE XXXXXXX D308,070 05/22/90 05/22/04
XXXXXX
XX-319 TYPEWRITER XXXXXXXXXX D308,535 06/12/90 06/12/04
TD-335 PORTABLE WORD XXXXX D309,859 08/14/90 08/14/04
PROCESSOR
TD-332 HAND HELD ELECTRONIC XXXXXXXXXX D310,209 08/28/90 08/28/04
DICTIONARY
TD-323 RIBBON CASSETTE XXXXXXX D310,384 09/04/90 09/04/04
CIP XXXXXX
XX-312 TYPEWRITER XXXXXXXXXX D311,926 11/06/90 11/06/04
TD-336 PRINTER XXXXX D315,172 03/05/91 03/05/05
TD-333 TYPEWRITER XXXXXX D316,558 04/30/91 04/30/05
TD-313 TYPEWRITER XXXXXXXXXX D317,321 06/04/91 06/04/05
TD-334 TYPEWRITER XXXXXX D317,934 07/02/91 07/02/05
TD-339 POCKET ELECTRONIC XXXXXX D319,223 08/20/91 08/20/05
DICTIONARY XXXXXXXXXX
XX-338 WORD PROCESSOR XXXXX D319,636 09/03/91 09/03/05
TD-348 RIBBON CASSETTE XXXXX D319,652 09/03/91 09/03/05
TD-337 TYPEWRITER XXXXXXXXXX D322,087 12/03/91 12/03/05
TD-340 TYPEWRITER XXXXXX D332,960 02/02/93 02/02/07
TD-353 WORD PROCESSOR XXXXX D333,830 03/09/93 03/09/07
TD-355 WORD PROCESSOR SMILEY D333,816 03/09/93 03/09/07
TD-354 PORTABLE WORD SMILEY D335,123 04/27/93 04/27/07
PROCESSOR
XXXXX XXXXXX, FOREIGN PATENTS
T-NO. TITLE COUNTRY XXX. NO. ISSUE
DATE
T-223 ELECTRIC MOTOR ASSEMBLY CANADA 1156704 00/00/00
X-000 XXXXXX XXXXXXXXX XXXXXXXX XXXXXX 1156593 11/08/83
APPARATUS
T-244 SPACEBAR TOUCH CONTROL CANADA 1150657 07/26/83
APPARATUS
T-253 REVERSE TABULATION CANADA 1193993 09/24/85
T-276 CABLE DRIVE SYSTEM CANADA 1214423 11/25/86
T-276 CABLE DRIVE SYSTEM JAPAN 2-39,989 09/07/90
T-280 AUTOMATIC WORD CANADA 1219680 03/24/87
CORRECTING SYSTEM
T-280 AUTOMATIC WORD GREAT 2156559 01/22/87
CORRECTING SYSTEM BRITAIN
T-280 AUTOMATIC WORD ITALY 1184976 10/28/87
CORRECTING SYSTEM
T-280 AUTOMATIC WORD GERMANY P35 08 472.3 10/06/88
CORRECTING SYSTEM
T-280 AUTOMATIC WORD JAPAN 0000000 09/28/92
CORRECTING SYSTEM
T-314 ELECTRONIC KEYBOARD CANADA 1294020 07/01/92
T-322 CASSETTE COMPATIBILITY TAIWAN UM 71575 06/02/92
T-322 XXXXXXXX XXXXXXXXXXXXX XXXXXX 000000 00/00/00
X-000 XXXXXXXX XXXXXXXXXXXXX XXXXXX XX-00000 03/05/91
T-322 CASSETTE COMPATIBILITY CANADA 1309371 10/27/92
X-000 XXXXXXXX XXXXXXXXXXXXX XXXXX 00000 00/00/00
X-000 XXXX XXXXXXXX XXX XXXXXX XX-00000 06/26/90
METERING CORRECTION
TAPE FEED
T-324 TAPE CASSETTE FOR CANADA 1316138 04/13/93
METERING CORRECTION
TAPE FEED
T-324 TAPE CASSETTE FOR EUROPEAN 0330777 07/17/91
METERING CORRECTION
TAPE FEED
T-324 TAPE CASSETTE FOR KOREA 43988 08/30/91
METERING CORRECTION
TAPE FEED
T-324 TAPE CASSETTE FOR MEXICO 164035 07/10/92
METERING CORRECTION
TAPE FEED
T-324 TAPE CASSETTE FOR SINGAPORE 1136/92 11/12/92
METERING CORRECTION
TAPE FEED
T-327 RIBBON TENSIONING MECH. KOREA 51177 05/01/92
T-328 KEYBUTTON GUIDE ASSY CANADA 1327222 02/22/94
FOR A KEYBOARD
T-328 KEYBUTTON GUIDE ASSY KOREA 47427 02/04/92
FOR A KEYBOARD
T-329 PLURAL CASSETTES HAVING EUROPEAN 0319285 03/03/93
COMPATIBILITY ARRANGEMENT
(RIBBON CASSETTE)
T-329 PLURAL CASSETTES HAVING SINGAPORE 627/93 06/16/93
COMPATIBILITY ARRANGEMENT
(RIBBON CASSETTE)
T-329 PLURAL CASSETTES HAVING GERMANY DE3878853T2 03/03/93
COMPATIBILITY ARRANGEMENT
(RIBBON CASSETTE)
T-329 PLURAL CASSETTES HAVING ITALY 67608 BE-93 03/08/93
COMPATIBILITY ARRANGEMENT
(RIBBON CASSETTE)
T-331 CARRIER RACK DRIVE AUSTRALIA 000000 03/31/92
T-331 CARRIER RACK DRIVE EUROPEAN 0378290 00/00/00
X-000 XXXXXX XXXXXXXX WITH TAIWAN NI-41,704 01/12/91
INTEGRAL PAPER GUIDE
T-347 RIBBON CASSETTE WITH MEXICO 173158 02/02/94
INTEGRAL PAPER GUIDE
T-359 SYSTEM INCLUDING INK GREAT 0449392 05/18/94
RIBBON AND CORRECTION BRITAIN
TAPE CASSETTES HAVING A
COMPATIBILTY ARRANGEMENT
T-360 CORRECTION TAPE CASSETTE GREAT 448184 07/06/94
HAVING COMPATIBILITY BRITAIN
ARRANGEMENT
T-360 CORRECTION TAPE CASSETTE ITALY 70350 BE-94 10/04/94
HAVING COMPATIBILITY
ARRANGEMENT
XXXXX XXXXXX, FOREIGN PATENT - DESIGN
T-NO. TITLE COUNTRY XXX. NO. ISSUE DATE
XX-000 XXXXXX XXXXXXXX XXXXXX 00000 00/00/00
XX-000 XXXXXX XXXXXXXX XXXXXX 88 3447 09/08/89
TD-323 RIBBON CASSETTE GREAT 1051115 01/04/89
BRITAIN
TD-323 RIBBON CASSETTE GERMANY MR 29 654 06/30/88
XX-000 XXXXXX XXXXXXXX XXXXX 00000 04/02/90
TD-323 RIBBON CASSETTE JAPAN 82 7791 10/25/91
XX-000 XXXXXX XXXXXXXX XXXXX 00000 10/12/89
TD-323 RIBBON CASSETTE MEXICO 3 955 11/14/90
TD-323 RIBBON CASSETTE SWITZERLAND 116899 09/26/88
TD-323CIP RIBBON CASSETTE FRANCE 88 7313 11/17/89
TD-323CIP RIBBON CASSETTE GERMANY M 88 03 078.4 11/09/88
TD-323CIP RIBBON CASSETTE ITALY 57 054 02/07/92
TD-323CIP RIBBON XXXXXXXX XXXXX 000000 04/17/90
TD-323CIP RIBBON CASSETTE KOREA 102,578-1 04/17/90
TD-323CIP RIBBON CASSETTE SWITZERLAND 117158 11/25/88
XX-000 XXXXXX XXXXXXXX XXXXXX 00000 00/00/00
XX-000 XXXXXX XXXXXXXX XXXXXX 02 96095 05/30/91
TD-348 RIBBON CASSETTE GREAT 2011375 01/30/92
BRITAIN
TD-348 RIBBON CASSETTE ITALY 59 774 09/13/93
TD-348 RIBBON CASSETTE JAPAN 87 0306 03/25/93
XX-000 XXXXXX XXXXXXXX XXXXX 000000 11/04/91
XX-000 XXXXXX XXXXXXXX XXXXXX 0000 09/08/92
XX-000 XXXXXX XXXXXXXX XXXXXXXX 00000 03/23/93
XX-000 XXXXXX XXXXXXXX XXXXX 000000 10/29/91
TD-348 RIBBON CASSETTE SWEDEN 50 488 09/18/91
XX-000 XXXXXX XXXXXXXX XXXXXX XX 00000 12/06/90
TD-348 RIBBON CASSETTE DENMARK 0254/92 03/19/92
XXXXX XXXXXX, U.S. APPLICATIONS
T-NO. TITLE S.N. FILING DATE
MECH.
--------
T-366 INTEGRAL LINEFINDER 08/144,387 11/02/93
AND RIBBON GUIDE
T-368 MINIATURE KEYBOARD 08/095,470 07/23/93
T-372 LABEL PRINTER AND TAPE 08/174,936 12/28/93
AND INK CARTRDIGE FOR
USE THEREIN
DES.
------
TD-373 LABEL PRINTER 29/018,252 02/02/94
TD-374 RIBBON AND TAPE CART. 29/018,262 02/02/94
XXXXX CORONA, FOREIGN APPLICATIONS
T-NO. TITLE COUNTRY S.N. FILING DATE
T-314 ELECTRONIC KEYBOARD JAPAN 63-325,750 12/23/88
T-314 ELECTRONIC KEYBOARD KOREA 17,062/1988 12/20/88
T-322 CASSETTE COMPATIBILITY TAIWAN 80 212,802 07/28/88
T-324 TAPE CASSETTE FOR METERING JAPAN 63-221,514 09/06/88
CORRECTION TAPE FEED
T-327 RIBBON TENSIONING MECH. JAPAN 1-116,249 05/11/89
T-328 KEYBUTTON GUIDE ASSEMBLY JAPAN 1-46,358 02/27/89
FOR A KEYBOARD
T-331 CARRIER RACK DRIVE CANADA 2004580 00/00/00
X-000 XXXXXXX XXXX XXXXX XXXXX 1-338862 12/28/89
T-331 CARRIER RACK DRIVE KOREA 2371990 01/08/90
X-000 XXXXXXX XXXX XXXXX XXXXXX 00000 01/05/90
T-331 CARRIER RACK DRIVE NORWAY P900067 01/08/90
T-331 CARRIER RACK DRIVE PORTUGAL 92,810L 01/09/90
T-347 RIBBON CASSETTE WITH CANADA 2031152 11/29/90
INTEGRAL PAPER GUIDE
T-347 RIBBON CASSETTE WITH JAPAN 2-414792 12/27/90
INTEGRAL PAPER GUIDE
T-347 RIBBON CASSETTE WITH KOREA 20522/1990 12/13/90
INTEGRAL PAPER GUIDE
T-347 RIBBON CASSETTE WITH NORWAY P905335 01/07/91
INTEGRAL PAPER GUIDE
T-347 RIBBON CASSETTE WITH PORTUGAL 96466 01/11/91
INTEGRAL PAPER GUIDE
T-352 BRAKE MECHANISM FOR A CANADA 2037323 02/28/91
PIVOTABLE CHARACTER DISPLAY
T-352 BRAKE MECHANISM FOR A JAPAN 3-94696 04/01/91
PIVOTABLE CHARACTER DISPLAY
T-358CIP QUIET IMPACT PRINTER MECH. CANADA 2076992 08/27/92
T-358CIP QUIET IMPACT PRINTER MECH. JAPAN 4-265,306 09/08/92
T-358CIP QUIET IMPACT PRINTER MECH. MEXICO 92-6123 10/23/92
T-363 PRINTING MECH. WITH PRINT CANADA 2076900 08/27/92
HAMMER HAVING NOISE
DAMPENER
T-363 PRINTING MECH. WITH PRINT JAPAN 4-266,489 09/09/92
HAMMER HAVING NOISE
DAMPENER
T-363 PRINTING MECH. WITH PRINT MEXICO 92-6188 10/27/92
HAMMER HAVING NOISE
DAMPENER
T-372 LABEL PRINTER AND TAPE AND CANADA N.A. 11/17/94
INK CARTRIDGE FOR USE
THEREIN
T-372 LABEL PRINTER AND TAPE AND EUROPEAN 94308594.4 11/22/94
INK CARTRIDGE FOR USE
THEREIN
SCHEDULE 2
----------
TRADEMARKS AND TRADEMARK LICENSES
Trade Name
----------
Xxxxx Xxxxxx Corporation
Trademark License
-----------------
SCM Office Supplies, Inc. and Ampad Corporation
July 5, 1994
TRADEMARKS
----------
A. U.S. TRADEMARKS
TRADEMARK GOODS REGNO EXPIRES C_UDATE
--------- ----- ----- ------- -------
2J SUPPLIES & ACCESSORIES FOR
PRINTERS ABANDONED
AUTOSPELL TYPEWRITERS 1469029 2007/12/15 2007/06/
CHARACTERSWAP TYPEWRITERS/PWPS 1783432 2003/07/20 1998/07/
CITATION TYPEWRITERS 727463 2002/02/13 2001/07/
CORONA TYPEWRITERS 1807465 2003/11/30 1998/11/
CORONACALC COMPUTER PROGRAMS 1624551 2000/11/27 1995/11/
CORONACOM WP PRINTED CIRCUIT BOARD 1792130 2003/09/07 1998/09/
CORONAFAX FAX MACHINES, CARRYING CASES,
KITS, PAPER FOR FAX MACHINES APPLN
CORONAFONT COMPUTER SOFTWARE FOR PRINTIN
FONTS 1667484 2001/12/10 1996/12/
CORONAJET PRINTERS 1769203 2003/05/04 1998/05/
CORONAPRINT CORRECTION TAPES, ET AL.
FOR WPS AND TYPEWRITERS 1820586 2004/02/08 1999/02/
DESIGN
(STEAMROLLER) FACSIMILE MACHINES
DESIGN
(KEYBUTTON) WORD PROCESSORS & TYPEWRITERS 1625761 2000/12/04 1995/12/
DEVILLE TYPEWRITERS 932178 2002/01/14 2001/07/
ERASE-A-WORD TYPEWRITERS 1442567SR 2007/06/09 1992/06/
EXPRESSION TYPEWRITERS APPLN
FLAT PAPER
OUTPUT FACSIMILE MACHINES APPLN
FLAT PAPER
OUTPUT(design) FACSIMILE MACHINES APPLN
GALAXIE TYPEWRITERS 707783 2000/11/29 2000/05/
GRAMMAR-RIGHT
SYSTEM I TYPEWRITERS 1503854 2008/09/13 1993/09/
H KITS - WP & TYPEWRITER 1748229 2003/01/26 1997/07/
HRT PRINTERS 1810619 2003/12/14 1998/12/
IQ
INTELLIGENTLY
QUIET TYPEWRITERS/WPS 1778243 2003/06/22 1998/06/
JUNIOR
SCHOLASTIC
ALL-AMERICAN PROMOTION OF EDUCATION
& GOLF THRU AWARDS APPLN
LIFT-RITE TW RIBBONS,CARTRIDGES 1214793 2002/11/02 2001/06/
LINEERASER AUTOMATIC ERASING MEANS
SOLD AS PART OF TYPEWRITER 1558632SR 1999/08/07 1994/08/
OFFICE 2000 TYPEWRITERS APPLN
OFFICE XL TYPEWRITERS APPLN
PERSONAL CARD
FILE COMPUTER PROGRAM FOR
WORD PROCESSING 1664806 2001/11/19 1996/11/
PHRASE ALERT TYPEWRITER COMPONENT
SIGNALLING OPERATOR OF
MISUSED PHRASES 1624761 2000/11/27 1995/11/
PUNCTUATION
CHECK TYPEWRITERS 1578403SR 2000/01/16 1995/01/
PWP WORD PROCESSORS 1670136 2001/12/31 1996/12/
PWP START-RITE SUPPLIES FOR PWP 1479472 2008/03/08 2007/10/
PWP START-RITE KITS WP PRINT WHEELS, DATA
DISKS & CASSETTES 1800511 2003/10/26 1998/04/
RE-RITE TW RIBBON CARTRIDGES 1079860 1997/12/20 1997/06/
RIGHT RIBBON
SYSTEM WORD PROCESSORS, TYPEWRITERS
AND ACC & SUPPLIES 1583619 2000/02/20 1995/02/
S SALE OF KITS SUPPLIES
FOR WORD PROCESSORS 1715330 2002/09/15 1997/09/
SCM TYPEWRITERS AND TYPEWRITER
RIBBON CASSETTES 1873814 2005/01/17 2000/01/
SCM (tri-bar) TYPEWRITERS 738222 2002/09/25 2002/03/
SCM (tri-bar) RIBBON CARTRIDGES 1208293 2002/09/14 2002/03/
SCM (tri-bar) ELECTROSTATIC COPY PAPERS 774333 2004/08/04 2004/02/
SCM (tri-bar) TYPEWRITERS AND TYPEWRITER
RIBBON CASSETTES 1871294 2005/01/03 2000/01/
SCM OFFICE SUPPLIES APPLN
SCM (tri-bar) OFFICE SUPPLIES APPLN
SIMPLY SMART COMPUTERS 1709808 2002/08/25 1997/08/
XXXXX XXXXXX WORD PROCESSORS 1620948 2000/11/06 1995/11/
XXXXX CORONA PRINTERS 1631434 2001/01/15 1996/01/
XXXXX XXXXXX
(LOGO) WORD PROCESSORS 1633823 2001/02/05 1996/02/
XXXXX CORONA
(LOGO) TYPEWRITERS 1396799 2006/06/10 2005/12/
XXXXX XXXXXX
(LOGO) PRINTERS 1633042 2001/01/29 1996/01/
XXXXX CORONA
(LOGO) DESKS, WORK STATIONS,FURNITURE,
ACCESSORIES,LAMPS,CABINETS APPLN
XXXXX XXXXXX
(LOGO) MACHINES FOR LAMINATING
DOCUMENTS 1870333 2004/12/27 1999/12/
XXXXX CORONA
(LOGO) FAX MACHINES, ETC, PAPER
& SUPPLIES FOR FAX APPLN
XXXXX XXXXXX
(LOGO) CALCULATORS APPLN
XXXXX CORONA COMBO ELECTRONIC DICT
AND CALCULATOR 1620947 2000/11/06 ABANDON
XXXXX XXXXXX WORD PROCESSORS 1620948 2000/11/06 1995/11/
XXXXX CORONA
(LOGO) COMBO ELECTRONIC
DICT AND CALCULATOR 1623390 2000/11/20 ABANDON
XXXXX-XXXXXX TYPEWRITERS,ADD MACHINES 517362 2009/11/08 2009/05/
XXXXX CORONA SUPPLIES/ACCESSORIES
(horizontal FOR TYPEWRITERS, WORD
form) PROCESSORS APPLN
SPELL-RIGHT I TYPEWRITERS 1529647 1999/03/14 1994/03/
SPELL-RIGHT I DICTIONARY MODULE FOR
ELECTRONIC TYPEWRITERS 1531902 1999/03/28 1998/09/
SPELL-RIGHT I ELEC. DICTIONARY AND
CALCULATOR 1581219 2000/02/06 1995/02/
START-RITE RIBBONS, PRINTWHEELS 1414200 2006/10/21 2006/04/
STERLING TYPEWRITERS 780263 2004/11/17 2004/05/
THE INTELLIGENT
ALTERNATIVE
TO PC WORD PROCESSORS 1638925 2001/03/26 ABANDON
TOMORROWS
TECHNOLOGY
AT YOUR TOUCH WORD PROCESSORS 1583498 2000/02/20 1995/02/
TOOLS FOR
THOUGHT WPS, TYPEWRITERS, PCS 1787277 2003/08/20 1998/08/
WORKROOM OFFICE, WORK STATIONS, DESK
& COMPUTER ACCESSORIES APPLN
WORD-RIGHT WORD PROCESSOR, TYPEWRITER
COMPONENTS 1776316 2003/06/15 1998/06/
WORD-RIGHT &
DESIGN TYPEWRITERS 1410436 2006/09/23 2006/03/
WORDERASER TYPEWRITERS 1361225SR 2005/09/17 2005/03/
WORDERASER TYPEWRITER COMPONENT
FOR ERASING SPELLING ERRORS 1683757 2002/04/21 1997/04/
WORDFIND TYPEWRITERS 1428368 2007/02/10 2006/08/
WORDSWAP TYPEWRITERS/PWPS 1779404 2003/06/29 1998/06/
B. FOREIGN TRADEMARKS
Trademark INDEX# Country Goods Regno C_ud
----------------------------------- ------- ----- ----
SCM (tri-bar) SCM106 ARGENTINA CALCULATORS, ADDING
MACHINES 1054227 2003
XXXXX-XXXXXX SCM111 ARGENTINA TYPEWRITERS 1053107 2003
CORONACALC SCM193 AUSTRALIA ALL GOODS IN CLASS 9 A525768 1996
CORONAMATIC XXX00 XXXXXXXXX TYPEWRITERS, RIBBON
CARTRIDGES 302674 1997
RIGHT RIBBON
SYSTEM SCM133 AUSTRALIA TYPEWRITERS & PARTS APPLN
RIGHT RIBBON
SYSTEM SCM133 AUSTRALIA TYPEWRITERS, PARTS
& ACCES. APPLN
SCM (tri-bar) SCM106 AUSTRALIA TYPEWRITERS & PARTS B172444 1998
SCM (tri-bar) SCM106 AUSTRALIA TYPEWRITER REPAIR,
SERVICE, MAINTENANCE B332952 0000
XXXXX XXXXXX XXX000 XXXXXXXXX WORD PROCESSORS A521844 1996
XXXXX XXXXXX
logo SCM229 AUSTRALIA TYPEWRITERS A560884 1998
XXXXX CORONA
logo SCM229 AUSTRALIA WORD PROCESSORS &
COMPUTER HDW A560885 1998
XXXXX XXXXXX
logo SCM395 AUSTRALIA CALCULATORS & OTHER
GOODS IN CLASS APPLN
XXXXX CORONA
logo SCM416 AUSTRALIA MACHINES FOR LAMINA-
TING DOCUMENTS A606182 2000
XXXXX-XXXXXX SCM111 AUSTRALIA TYPEWRITERS & PARTS A105164 2006
START-RITE SCM117A AUSTRALIA ALL GOODS IN CLASS 16 561034 1998
START-RITE SCM117B AUSTRALIA ALL GOODS IN CLASS 9 B55588 1997
START-RITE SCM117C AUSTRALIA SUPPLIES FOR
TYPEWRITERS & W/P APPLN
IQ INTELLIGENTLY
QUIET SCM360 AUSTRIA TWS, WP SYSTEMS, ETC 147077 2002
XXXXX CORONA
logo SCM229 AUSTRIA WORD PROCESSORS,
TYPEWRITERS 140341 2001
XXXXX-XXXXXX SCM236 AUSTRIA TYPEWRITERS & WORD
PROCESSORS 034124 1995
WORDERASER SCM122 AUSTRIA TYPEWRITERS, WORD
PROCESSORS 130171 1999
CORONA SCM90 BENELUX TYPEWRITERS 72103 2000
CORONAMATIC SCM92 BENELUX TYPEWRITERS 335003 1995
H SCM191 BENELUX TYPEWRITER PARTS &
ACCESSORIES 538481 2003
IQ SERIES
INTELLIGENTLY
QUIET SCM360 BENELUX TYPEWRITERS 520111 2001
RIGHT RIBBON
SYSTEM SCM133 BENELUX ALL GOODS IN CLASSES
9 & 16 466898 1999
SCM (tri-bar) SCM106 BENELUX TYPEWRITERS, COPIERS,
CALCULATORS 072106 2002
XXXXX XXXXXX SCM236 BENELUX ALL GOODS IN CLASS 9 474890 1999
XXXXX CORONA
logo SCM229 BENELUX TYPEWRITERS ETC 505484 2001
XXXXX-XXXXXX
design SCM111 BENELUX TYPEWRITERS,
CALCULATORS 072105 2000
XXXXX CORONA
design SCM416 BENELUX MACHINES FOR
LAMINATING DOCUMENTS 535836 2003
XXXXX XXXXXX
design SCM395 BENELUX CALCULATORS 535836 2003
SPELL-RIGHT SCM33A BENELUX TYPEWRITERS 464222 1998
SPELL-RIGHT SCM33B BENELUX COMPUTERS,WORD
PROCESSORS &
TYPEWRITERS 464222 1998
SPELL-RIGHT &
design SCM33C BENELUX TYPEWRITERS &
ACCESSORIES 431230 1996
WORDERASER SCM122 BENELUX TYPEWRITERS &
ACCESSORIES 430672 1996
SCM (tri-bar) SCM106 BOLIVIA TYPEWRITERS 37465 1997
XXXXX-XXXXXX XXX000X BOLIVIA CALCULATING MACHINES 42442 1999
XXXXX-XXXXXX SCM111B BOLIVIA TYPEWRITERS & PARTS 42443 1999
XXXXX-XXXXXX SCM111 BRAZIL TYPEWRITERS, PARTS
SUPPLIES, WPS &
PRINTERS 2778637 2001
CHARACTER SWAP SCM376 CANADA TYPEWRITERS/WORD
PROCESSORS APPLN
CORONAFAX SCM245 CANADA FACSIMILE MACHINES&
ACCESSORIE APPLN
CORONAFONT SCM319 CANADA COMPUTER SOFTWARE FOR
PRINTING FONTS 439983 2009
CORONAMATIC SCM92 CANADA TYPEWRITERS &
CARTRIDGES 212703 2005
CORONCALC SCM193 CANADA WORD PROCESSORS 379789 2005
H SCM191 CANADA WORD PROCESSORS APPLN
IQ INTELLIGENTLY
QUIET SCM360 CANADA TYPEWRITERS & PWPS 426936 2008
PHRASE ALERT SCM151 CANADA TYPEWRITER FEATURE 373404 0000
XXXXXXXX XXX000 XXXXXX TYPEWRITERS 276505 0000
XXX XXX000 XXXXXX WORD PROCESSORS 386454 0000
XXXXX XXXXXX
XXXXXX XXX000X XXXXXX TYPEWRITERS 363178 2004
RIGHT RIBBON
SYSTEM SCM133B CANADA WPS,RIBBON, TAPE
CASSETTES FOR APPLN
TWS & WPS
RIGHT RIBBON
SYSTEM SCM133C CANADA TYPEWRITERS 363178 2004
SCM (tri-bar) SCM106 CANADA TYPEWRITERS, ADDING
MACHINES,PHOTOCOPY 149596 0000
XXXXX XXXXXX XXX000 XXXXXX WPS,COMPONENTS, ELECT
REF DEVICES 423537 2008
XXXXX XXXXXX
Xxxx XXX000X XXXXXX TYPEWRITERS 333676 0000
XXXXX XXXXXX
Xxxx XXX000X XXXXXX TYPEWRITERS, WORD
PROCESSORS, PARTS 427137 0000
XXXXX XXXXXX
Xxxx XXX000 XXXXXX CALCULATORS 435689 0000
XXXXX XXXXXX
Xxxx XXX000 XXXXXX MACHINES FOR
LAMINATING DOCUMENTS APPLN
XXXXX-XXXXXX SCM111 CANADA TYPEWRITERS, RIBBONS, TMDA
PAPER+ 54677 2002
SPELL-RIGHT I &
design SCM33 CANADA TYPEWRITERS 328817 0000
XXXXX-XXXX XXX000 XXXXXX PRINT/CORRECTION
RIBBONS & PRINT WHEELS356852 2003
TOMORROWS TECH-
NOLOGY AT YOUR
TOUCH SCM178 CANADA WORD PROCESSORS 393105 2006
TOOLS FOR
THOUGHT SCM351 CANADA TYPEWRITERS, W/P, PCS 422527 2008
WORDERASER SCM122 CANADA TYPEWRITERS 341784 0000
XXXXXXXX XXX000 XXXXXX TYPEWRITERS/WORD
PROCESSORS APPLN
SCM (tri-bar) SCM106 CHILE TYPEWRITERS, PAPER 411685 2003
XXXXX XXXXXX
logo SCM229 CHILE WORD PROCESSORS,
TYPEWRITERS 378177 2001
XXXXX-XXXXXX SCM111 CHILE TYPEWRITERS, COPYING,
PRINTING 350316 1999
XXXXX XXXXXX
Logo SCM229 COLOMBIA TYPEWRITERS 158737 2003
SCM (tri-bar) SCM106 COLOMBIA TYPEWRITERS 94965 0000
XXXXX-XXXXXX XXX000 XXXXXXXX TYPEWRITERS 29016 2001
29016A
SCM (tri-bar) XXX000 XXXXX XXXX XXXXXXXXXXX 00000 0000
XXXXX-XXXXXX XXX000 XXXXX XXXX TYPEWRITERS & PARTS 13067 0000
XXXXX-XXXXXX XXX000 XXXXXX TYPEWRITERS & PARTS 4550 2001
H-SERIES SCM191 DENMARK TYPEWRITER PARTS &
ACCESSORIES
IQ SERIES
INTELLIGENTLY SCM360 DENMARK TYPEWRITERS 9416/ 2002
QUIET 1992
SCM (tri-bar) SCM106 DENMARK TYPEWRITERS,+ VRO3589 2004
1964
XXXXX XXXXXX SCM236 DENMARK WORD PROCESSORS APPLN
XXXXX CORONA
logo SCM229 DENMARK WORD PROCESSORS, 07214/ 2003
TYPEWRITERS ETC 1993
XXXXX-XXXXXX SCM111 DENMARK TYPEWRITERS,+ 353/19512000
SPELL-RIGHT SCM33 DENMARK TYPEWRITERS 3256- 1999
1990
XXXXX-XXXXXX SCM111 DOMINICAN TYPEWRITERS, ADDING 7601 2000
REP MACHINES
XXXXX XXXXXX
logo SCM111 ESTONIA TYPEWRITER, WPS 09811 1999
XXXXX CORONA
logo SCM229 FINLAND WORD PROCESSORS,
TYPEWRITERS 129988 2003
XXXXX-XXXXXX SCM111 FINLAND TYPEWRITERS, ADDING
MACHINES 64935 0000
XXXXXX XXX00 XXXXXX ADDING MACHINES 1652125 0000
XXXXXX XXX00X XXXXXX TYPEWRITERS & PARTS 1195240 2001
H SCM191 FRANCE TYPEWRITER PARTS &
ACCESSORIES 934873252003
IQ INTELLIGENTLY
QUIET XXX000 XXXXXX TYPEWRITERS & PWPS 924326322002
RIGHT RIBBON
SYSTEM SCM133 FRANCE ALL GOODS IN CLASSES
9 & 16 1558288 1999
SCM (tri-bar) XXX000 XXXXXX TYPEWRITERS 1589956 0000
XXXXX XXXXXX XXX000 XXXXXX WORD PROCESSORS 1584299 1999
XXXXX CORONA
Logo SCM229 FRANCE TYPEWRITERS, WORD
PROCESSORS 1692649 2001
XXXXX XXXXXX
logo XXX000 XXXXXX CALCULATORS 460268 2002
XXXXX CORONA
logo SCM416 FRANCE MACHINES FOR 93/
LAMINATING DOCUMENTS 478888 2003
XXXXX-XXXXXX SCM111 FRANCE TYPEWRITERS, WORD
PROCESSORS 1584299 1999
SPELL-RIGHT SCM33 FRANCE TYPEWRITERS 1528853 1998
WORDERASER SCM122 FRANCE ALL GOODS IN CLASSES
9&16 1569351 1998
H SCM191 GERMANY TYPEWRITERS PARTS &
ACCESSORIES APPLN
SCM XXXXX-XXXXXX SCM111A GERMANY TYPEWRITERS 857102 0000
XXXXX XXXXXX XXX000 GERMANY WORD PROCESSORS 1179305 1996
XXXXX CORONA
logo SCM229 GERMANY TYPEWRITERS & WORD
PROCESSORS 2030234 2001
XXXXX XXXXXX
logo SCM416 GERMANY LAMINATING MACHINES
FOR DOCUMENTS 2067581 2003
XXXXX CORONA
logo SCM395 GERMANY CALCULATORS, POCKET
CALCULATORS 2067581 2003
XXXXX-XXXXXX SCM111 GERMANY TYPEWRITERS 627719 2000
H SCM191 GREECE TYPEWRITER PARTS
& ACCESSORIES APPLN
XXXXX-XXXXXX SCM111 GREECE TYPEWRITERS,
ADDING MACHINES 47177 2001
SPELL-RIGHT SCM33 GREECE TYPEWRITERS 95160 1999
XXXXX-XXXXXX SCM111A GUATEMALA TYPEWRITERS & PARTS 7930 2001
XXXXX-XXXXXX SCM111B GUATEMALA ADDING MACHINES 7929 2001
CORONAMATIC SCM92 HONG KONG TYPEWRITERS & PARTS 1769 1997
SCM (tri-bar) SCM106 HONG KONG TYPEWRITERS & ADDING
MACHINES 8584/5 2002
XXXXX-XXXXXX SCM111 HONG KONG TYPEWRITERS & ADDING 1072/
MACHINES 1949 2004
XXXXX CORONA
logo XXX000 XXXXXXX WORD PROCESSORS 132293 2006
XXXXX-XXXXXX SCM111 INDIA TYPEWRITERS & PARTS 147010 2000
XXXXX-XXXXXX SCM111 INDONESIA TYPEWRITERS & ADDING
MACHINES 85506 1997
H SERIES SCM191 IRELAND TYPEWRITERS,
ACCESSORIES & STA APPLN
SCM (tri-bar) SCM106 ISRAEL TYPEWRITERS 34228 2006
XXXXX-XXXXXX SCM111 ISRAEL TYPEWRITERS & PARTS 34230 2006
H SCM191 ITALY TYPEWRITERS & WORD
PROCESSORS
CORONA SCM90A ITALY TYPEWRITERS & PARTS 429388 1993
IQ INTELLIGENTLY
QUIET SCM360 ITALY TYPEWRITERS & PWPS APPLN
SCM SCM109 ITALY TYPEWRITERS + VARIOUS
GOODS 264828 2000
SCM (tri-bar) SCM106 ITALY TYPEWRITERS + VARIOUS
GOODS 264830 2000
XXXXX XXXXXX SCM236 ITALY WORD PROCESSORS 605763 1998
XXXXX CORONA
Logo SCM229 ITALY TYPEWRITERS & WORD
PROCESSORS APPLN
XXXXX-XXXXXX SCM111 ITALY TYPEWRITERS 423515
SPELL-RIGHT SCM33 ITALY ALL GOODS IN CLASES
9&16 557752 1999
WORDERASER SCM122 ITALY ALL GOODS IN CLASSES
9&16 559888 1999
SCM (tri-bar) SCM106A JAPAN ADDING MACHINES 613969 2002
SCM SCM106B JAPAN CARBON RIBBONS AND
STATIONERY 616121 XXXX
XXXXX CORONA SCM236 JAPAN WORD PROCESSORS 2495000 2002
XXXXX CORONA
Logo SCM395 JAPAN CALCULATORS APPLN
XXXXX-XXXXXX SCM111 JAPAN TYPEWRITERS & PARTS 437649 2003
CORONAMATIC SCM92 KOREA TYPEWRITERS, RIBBONS,
CARTRIDG 56828 1998
GRAMMAR RIGHT
SYSTEM I SCM124 KOREA TYPEWRITERS 202081 2000
LINEERASER SCM149 KOREA TYPEWRITERS 204262 2000
PHRASE ALERT SCM151 KOREA TYPEWRITERS 204263 2000
SCM (tri-bar) SCM106 KOREA TYPEWRITERS, ADDING
MACHINES 6526 2001
XXXXX-XXXXXX SCM111 KOREA TWS, RIBBONS &
CARTRIDGES FOR TWS 494 1994
XXXXX XXXXXX
Logo SCM111 LATVIA TYPEWRITERS, WPS
XXXXX-XXXXXX SCM111 LEBANON TYPEWRITERS, ADDING
MACHINES 41879 1996
SPELL-RIGHT SCM33 LIECH- COMPUTERS (WORD
PROCESSORS)
TENSTEIN 7673 2009
XXXXX XXXXXX
logo SCM111 LITHUANIA TYPEWRITERS, WPS APPLN
H-SERIES SCM191 MEXICO TYPEWRITER PARTS &
ACCESSORIES 456209 1996
H-SERIES SCM191 MEXICO TYPEWRITER PARTS &
ACCESSORIES 456210 1996
IQ INTELLIGENTLY
QUIET SCM360 MEXICO TYPEWRITERS & PWPS 435451 1995
RIGHT RIBBON SCM133 MEXICO WORD PROCESSORS,
XXXXXXXXX, XX 000000 2004
RIGHT RIBBON
SYSTEM SCM133 MEXICO WORD PROCESSORS 381136 2004
SCM SCM106 MEXICO TYPEWRITER RIBBONS 110702 2001
XXXXX CORONA
Logo SCM229 MEXICO WORD PROCESSORS 119736 2001
XXXXX XXXXXX
Logo SCM395 MEXICO CALCULATORS 448372 2002
XXXXX CORONA
Logo SCM416 MEXICO MACHINES FOR
LAMINATING DOCUME 467275 1997
XXXXX-XXXXXX SCM111 MEXICO TYPEWRITERS, ADDING
MACHINES 63435 2004
XXXXX XXXXXX XXX000X MEXICO ELECTRIC TYPEWRITERS 461538 1999
XXXXX XXXXXX SCM236 MEXICO WPS AND ELECTRONIC
COMPONENTS 461689 1999
WORDERASER SCM122 MEXICO ALL GOODS IN CLASS 9 396650/11994
SPELL-RIGHT SCM202 MONACO COMPUTERS (WORD 89.
PROCESSORS) 12768 1999
CORONAMATIC SCM92 NEW ZEALAND TYPEWRITERS & PARTS 118726 1997
SCM (tri-bar) SCM106 NEW ZEALAND TYPEWRITERS, ADDING
MACHINES 70479 1996
XXXXX CORONA
logo SCM229 NEW ZEALAND WORD PROCESSORS APPLN
XXXXX-XXXXXX SCM111A NEW ZEALAND TYPEWRITERS 98086 0000
XXXXX-XXXXXX XXX000X XXX XXXXXXX TYPEWRITERS,ELECTRIC 100085 0000
XXXXX-XXXXX XXX000 XXX XXXXXXX COMPUTERS, ETC. APPLN
SPELL-RIGHT SCM33 NEW ZEALAND TYPEWRITERS APPLN
IQ SERIES
INTELLIGENTLY
QUIET SCM360 NORWAY TYPEWRITERS APPLN
SCM (tri-bar) SCM106 NORWAY COPIERS, ADDING
MACHINES 61277 0000
XXXXX XXXXXX XXX000 NORWAY WORD PROCESSORS 148501 2001
XXXXX CORONA
Logo SCM229 NORWAY TYPEWRITERS, WPS &
PARTS 154460 2002
XXXXX-XXXXXX SCM111 NORWAY TYPEWRITERS, ADDING
MACHINES 48132 1995
CORONAMATIC SCM92 PAKISTAN TYPEWRITERS & PARTS 65413 1998
SCM (tri-bar) SCM106 PAKISTAN TYPEWRITERS & PARTS 65455 1998
XXXXX-XXXXXX SCM111 PAKISTAN TYPEWRITERS & PARTS 65412 1998
XXXXX-XXXXXX SCM111 PARAGUAY TYPEWRITERS,
CARTRIDGES 150507 0000
XXXXX XXXXXX XXX000X PEO.REP.
CHINA TYPEWRITERS APPLN
XXXXX XXXXXX SCM111B PEO.REP.
CHINA WORD PROCESSORS APPLN
XXXXX CORONA
Logo SCM395 PEO.REP.
CHINA COMPUTERS/CALCULATORS 691549 2003
CORONAMATIC SCM92 PHILIPPINES TYPEWRITERS & PARTS 28910 2000
SCM (tri-bar) SCM106 PHILIPPINES TYPEWRITERS & PARTS 29182 2000
XXXXX XXXXXX SCM111 POLAND TYPEWRITERS 79458 2002
XXXXX CORONA
Logo SCM229A POLAND TYPEWRITERS APPLN
H SCM191 PORTUGAL TYPEWRITER PARTS &
ACCESSORIES APPLN
IQ INTELLIGENTLY
QUIET SCM 360 PORTUGAL TYPEWRITERS & PWPS 284665N 1998
SCM (tri-bar) SCM106 PORTUGAL TYPEWRITERS 179599L 0000
XXXXX XXXXXX XXX000 PORTUGAL WORD PROCESSORS 262064J 1997
XXXXX CORONA
Logo SCM229B PORTUGAL WORD PROCESSORS 277111-K1998
XXXXX XXXXXX
logo XXX000X XXXXXXXX TYPEWRITERS 276247U 1998
XXXXX-XXXXXX SCM111 PORTUGAL TYPEWRITERS & PARTS 179670B 1997
SPELL-RIGHT SCM33 PORTUGAL ALL GOODS IN CLASS 16 256500 1997
WORDERASER SCM122 PORTUGAL ALL GOODS IN CLASS 16 256723Y 1997
IQ INTELLIGENTLY
QUIET SCM360 ROMANIA TYPEWRITERS & PWPS APPLN
XXXXX XXXXXX SCM111 ROMANIA TYPEWRITERS APPLN
XXXXX CORONA
Logo SCM229A ROMANIA TYPEWRITERS APPLN
XXXXX XXXXXX &
DEVICE SCM229 SAUDI
ARABIA ALL IN CLASS 16 245/60 2000
XXXXXX XXX00 XXXXXXXXX TYPEWRITERS & PARTS S/56465 0000
XXXXXXXXXX XXX000 XXXXXXXXX GOODS IN CLASS 9 S/789/901996
IQ SERIES
INTELLIGENTLY
QUIET SCM360 SINGAPORE IN CLASS 16 APPLN
SCM (tri-bar) SCM106 SINGAPORE TYPEWRITERS & PARTS 56466 0000
XXXXX XXXXXX XXX000 XXXXXXXXX WORD PROCESSORS 854/90 0000
XXXXX XXXXXX
Xxxx XXX000 XXXXXXXXX TYPEWRITERS S/7364/
91 0000
XXXXX-XXXXXX XXX000 XXXXXXXXX TYPEWRITERS & PARTS 56467 0000
XXXXXX XXX00 XXXXX
XXXXXX TYPEWRITERS 12/25 1996
SCM (tri-bar) XXX000 XXXXX
XXXXXX TYPEWRITERS 62/0501
/1 0000
XXXXX XXXXXX XXX000 XXXXX
XXXXXX WORD PROCESSORS 90/0523 0000
XXXXX-XXXXXX XXX000 XXXXX
XXXXXX XXXXXXXXXXX 000/00 0000
X XXX000 XXXXX TYPEWRITERS APPLN
H SCM191 SPAIN WORD PROCESSORS APPLN
IQ INTELLIGENTLY
QUIET SCM360 SPAIN TYPEWRITERS & PWPS APPLN
SCM (tri-bar) SCM106 SPAIN TYPEWRITERS 397245 2003
SCM (tri-bar) SCM107 SPAIN ADDING MACHINES
CALCULATORS 379246 2003
XXXXX XXXXXX SCM236 SPAIN WORD PROCESSORS 1583772 2003
XXXXX CORONA
Logo SCM229 SPAIN TYPEWRITERS, WORD
PROCESSORTS 1664112 2001
XXXXX-XXXXXX SCM111 SPAIN TYPEWRITERS 243964 1995
SPELL-RIGHT SCM33B SPAIN ALL GOODS IN CLASS 16 APPLN
SPELL-RIGHT SCM33A SPAIN TYPEWRITERS APPLN
WORDERASER SCM122A SPAIN TYPEWRITERS 1504265 2001
WORDERASER SCM122B SPAIN ALL GOODS IN CLASS 9 1504264 2000
XXXXX CORONA
logo SCM229 SWEDEN ALL GOODS IN CLASSES
9/16 261384 2004
XXXXX-XXXXXX SCM111 SWEDEN TYPEWRITERS, ADDING
MACHINES 141547 0000
XXXXX XXXXXX XXX000 XXXXXX WORD PROCESSORS 253252 0000
XXXXXX XXX00 XXXXXXXXXXX TYPEWRITERS 302645 1999
CORONAMATIC SCM92 SWITZERLAND TYPEWRITERS 267554 2003
IQ INTELLIGENTLY
QUIET SCM360 SWITZERLAND TYPEWRITERS & PWPS 400125 2001
SCM (tri-bar) SCM106 SWITZERLAND TYPEWRITERS 319239 2001
XXXXX XXXXXX
logo SCM229 SWITZERLAND TYPEWRITERS 392201 2011
XXXXX-XXXXXX SCM111 SWITZERLAND TYPEWRITERS, WPS,
RIBBON CARTR 381910 2009
SCM (tri-bar) SCM106 TAIWAN TYPEWRITERS & PARTS 91619 1997
XXXXX XXXXXX SCM236 TAIWAN COMPUTERS, WORD
PROCESSORS 514665 2000
XXXXX CORONA
Logo SCM229A TAIWAN TYPEWRITERS &
PRINTWHEELS FOR TWS 554694 1994
XXXXX XXXXXX
Logo SCM229B TAIWAN WORD PROCESSORS,
PRINTWHEELS, 612722 2000
XXXXX CORONA
Logo SCM229C TAIWAN SHEET FEEDERS; CASSETTES; CORRECTION
TAPES ETC. 616446 2003
XXXXX-XXXXXX SCM111 XXXXXX XXXXXXXXXXX 0000 0000
XXXXXXXXXXX XXX00 XXXXXXXX TYPEWRITERS & PARTS 61578 1996
IQ INTELLIGENTLY
QUIET SCM 360 THAILAND TYPEWRITERS & PWPS TM13954 2002
XXXXX CORONA
Logo XXX000X XXXXXXXX WORD PROCESSORS APPLN
XXXXX XXXXXX
Logo SCM236B THAILAND TYPEWRITERS APPLN
XXXXX-XXXXXX SCM111 THAILAND TYPEWRITERS 69772 1996
XXXXX-XXXXXX
Logo SCM229 THAILAND TYPEWRITERS APPLN
SCM & DESIGN SCM106 TURKEY TYPEWRITERS,
CALCULATING MACHINES 60222 1997
XXXXX-XXXXXX SCM111 TURKEY TYPEWRITERS,
TYPEWRITER RIBBON 60292 1997
XXXXX XXXXXX
Logo SCM229A U.A.E TYPEWRITERS & WORD
PROCESSORS 7858 2001
XXXXX CORONA
Logo SCM229B U.A.E. WORD PROCESSORS 7857 2001
SPELL-RIGHT SCM33 U.S.S.R ALL GOODS IN CLASSES
9&16 88740 1999
AUTOSPELL SCM87 U.S.S.R. ALL GOODS IN CLASSES
9/16 95466 2000
RIGHT RIBBON
SYSTEM SCM133A U.S.S.R. ALL GOODS IN CLASSES
9&16 88646 1999
RIGHT RIBBON
SYSTEM(CYRILLIC) SCM133B U.S.S.R. ALL GOODS IN CLASSES
9 & 16 96867 2000
XXXXX XXXXXX
device SCM111 U.S.S.R. ALL GOODS IN CLASSES
9/16 88647 1999
XXXXX CORONA
device(XXX) SCM229 U.S.S.R. ALL GOODS IN CLASSE
9/16 88644 1999
SPELL-RIGHT
(CYRILLIC) SCM33 U.S.S.R. TYPEWRITERS & WORD
PROCESSORS 96869 2000
WORDERASER SCM122A U.S.S.R. ALL GOODS IN CLASSES
9&16 88739 1999
WORDERASER
(CYRILLIC) SCM122B U.S.S.R. ALL GOODS IN CLASSES
9/16 96870 2000
WORDFIND SCM123A U.S.S.R. TYPEWRITERS,
WORDPROCESSORS 88645 1999
WORDFIND(IN XXX) SCM123B U.S.S.R. TYPEWRITERS, WORD
PROCESSORS, ETC. 96968 2000
WORDRIGHT SCM121 U.S.S.R. TYPEWRITERS, WORD
PROCESSORS 95467 2000
CHARACTER SWAP XXX000 XXXXXX
XXXXXXX WORD PROCESSORS B1502090 0000
XXXXXX XXX00 XXXXXX
XXXXXXX TYPEWRITERS 341299 0000
XXXXXXXXXX XXX000 XXXXXX
XXXXXXX COMPUTERS (WORD
PROCESSORS) 1407399 1996
H XXX000 XXXXXX
XXXXXXX TYPEWRITER PARTS AND
ACCESSORIES
IQ SERIES
INTELLIGENTLY SCM360 UNITED
QUIET KINGDOM TYPEWRITERS 1504616 1998
SCM (tri-bar) XXX000 XXXXXX
XXXXXXX TYPEWRITERS 855595 0000
XXXXX XXXXXX XXX000 XXXXXX
XXXXXXX TYPEWRITERS, PARTS 695405 0000
XXXXX XXXXXX XXX000 XXXXXX
XXXXXXX CALCULATORS, PARTS AND
FITTINGS 1524682 0000
XXXXX XXXXXX XXX000 XXXXXX
XXXXXXX WORD PROCESSORS 1396565 1996
XXXXX XXXXXX
Xxxx XXX000X XXXXXX
XXXXXXX TYPEWRITERS 1472565 0000
XXXXX XXXXXX
Xxxx XXX000X XXXXXX
XXXXXXX WORD PROCESSORS 1472564 1998
XXXXX CORONA
logo SCM416 UNITED
KINGDOM MACHINES FOR
LAMINATING DOCUMENTS 1540505 2000
START-RITE SCM117 UNITED
KINGDOM TW ACCESSORIES, PRINT
& CORRECTION RIBBONS 1333449 2004
WORD SWAP XXX000 XXXXXX
XXXXXXX WORD PROCESSORS APPLN
SCM SCM105 VENEZUELA TYPEWRITERS 99834 1997
SCM SCM105 VENEZUELA TYPEWRITERS 99818-F 1997
SCM (tri-bar) VENEZUELA BUSINESS CARDS 104782-F 1998
SCM (tri-bar) SCM106 VENEZUELA TYPEWRITERS 99855-F 1997
SCM(tri-bar) SCM106 VENEZUELA TYPEWRITERS 99833-F 1997
XXXXX XXXXXX
Logo SCM229 VENEZUELA TYPEWRITERS,
WORD PROCESSORS APPLN
XXXXX-XXXXXX XXX000X VENEZUELA TYPEWRITERS 107491-F 1998
XXXXX-XXXXXX SCM111B VENEZUELA TYPEWRITERS 17819-D 1998
SCHEDULE 3.13
CERTAIN ERISA MATTERS
SCHEDULE 3.13
ERISA FUNDINGS
as of JANUARY 1, 1994
Office Supplies Group Xxxxx Corona
Hourly Salaried Hourly Salaried Total
VALUE OF ACCRUED
BENEFITS
Vested Benefits $2,990,001 $2,189,401 $26,446,176 $33,327,163 $64,903,543
Nonvested Benefits 163,538 124,660 18,662 695,958 1,002,818
Value of All Accrued
Benefits 3,154,339 2,264,061 26,464,840 34,023,121 65,906,361
Accrued Market
Value of Assets 2,301,581 2,611,488 24,574,436 38,068,637 67,556,142
Funded Ratio .9 (.3) 1.9 (3.2) 1.2
(Total Accrued
Benefits) 73% 115% 93% 112% 103%
P/Y 72% 105% 97% 110% 103%
/TABLE
SCHEDULE 3.15
SUBSIDIARIES
Subsidiary Name Country/State of Incorporation
SCC LI Corp. New York
Xxxxx Manufacturing Company New York
SCM Office Supplies Incorporated Delaware
Xxxxx Corona Overseas Holdings, Inc. Delaware
SCM (United Kingdom) Limited Delaware
SCM Inter-American Corporation California
Xxxxx Xxxxxx International, Ltd. St. Croix, U.S. Virgin
Islands
Xxxxx Corona France S.A.R.L. France
Xxxxx Xxxxxx (Canada) Limited Ontario, Canada
Xxxxx Corona Private Ltd. Republic of Singapore
Xxxxx Xxxxxx (United Kingdom) Limited United Kingdom
Coronasphere (Inactive) United Kingdom
Xxxxx Corona Australia Pty. Ltd. Australia
P.T. Xxxxx Xxxxxx Batam Republic of Indonesia
Xxxxx Corona de Mexico SA de C.V. Mexico
Xxxxx Xxxxxx GmbH Xxxxxxx
Xxxxx Xxxxxx X.X. (Belgium) Belgium
/TABLE
SCHEDULE 3.19
CERTAIN ENVIRONMENTAL MATTERS
SCHEDULE 3.19
MATTER DESCRIPTION STATUS
0 Xxxxx xx XX, Xxxxx and municipal Entered into settlement
et al.v.SCC authorities suing SCC agreement 5/12/89
(USDC NDNY) for cleanup costs resolving SCC's liability
under the to State and municipal
Comprehensive authorities and including
Environmental Response State approval of the on-
compensation and site remedial design.
Liability Act Public nuisance claims
("CERCLA") for not released until
groundwater completion of remedial
contamination in action. Remedial
Cortlandville and activity is continuing
Cortland,New York estimated completion 14,
years.
2 State of NY v. State Attorney Gen- Trial of liability issues
Allied Corp., eral suing Allied completed in August 1992.
et al.(USDC and others for Memorandum - Decision and
NDNY) clean-up costs
under CERCLA for Order dated 9/7/93 found
alleged disposal of SCC not liable. (Appeal
hazardous substancespossible but apparently
at "Solvent Savers" unlikely).
and "Xxxxx Farm" sites
in central New York
State. Private third-
party action brought
against SCC and three
other corporations for
indemnification and/or
contribution.
3 Groton,NY New York State Entered into consent
Site Department of order March 31,1993; SCC
Environmental to develop and implement
Conservation ("NYDEC") remediation plan and
listed SCC's former reimburse State for
operations in Groton, costs.
New York as an
inactive hazardous
waste disposal site.
4 Xxxxx U.S.Environmental Responded to EPA's
Superfund Site Protection Agency request that SCC set
("EPA") named SCC a forth its position
potentially regarding its non-
responsible party response to order to
(PRP") at Xxxxx perform a Remedial
superfund Site. SCC Investigation/Feasibility has used a hauler Study ("RI/FS" ).
related to the site
owner, but only to
haul non-hazardous -
waste.
5 Xxxxxx Private contribution Entered into (i) Joint
Industries, action brought against Defense Agreement with 2
Inc.,et al. SCC and others by other parties to be
v.Agway, parties participating represented by Xxxxx,
Inc.,et al. in the clean-up of the Xxxxxxxx and (ii)
(USDC NDNY) Xxxxx Superfund Site. comprehensive Joint
Defense and Cost Sharing
Agreement with all other
defendants. Currently
engaged in discovery.
6 Envirotek II Named a PRP at One of 300PRP's which
Site Envirotek site in entered into a consent
Tonawanda,New York, order to perform removal
to which SCC had sent of hazardous waste from
certain hazardous the site. Xxxxx
waste and non- Manufacturing subsidiary
hazardous waste for opted for de minimis
disposal. buyout for removal phase
for less that $5,000.
Investigation during
removal phase may lead to
EPA demand for RI/FS and
site remediation.
7 Quanta Named a PRP by EPA at One of 25PRP's which
Resources Site Quanta Resources site entered into Settlement
in Syracuse,New York, Agreement with EPA and
to which SCC allegedly Dept. of Justice
sent hazardous waste 10/22/92. Possible claim
for disposal. for New York State
investigation costs,
through no claims
currently threatened or
asserted.
8 PAS Oswego
Superfund Site Named a PRP at Entered into consent
Pollution Abatement order to conduct a RI/FS
Services ("PAS") at the site. Entered
Superfund Site in into second consent order
Oswego,New York. with EPA in September
1991 to undertake interim
ground water removal.
9 PAS Satel- Named a PRP at eight
lite Sites: PAS "Satellite" sites
which were used as
waste staging
facilities for the
main PAS Oswego Site.
Three of the satellite
sites are listed on
the National
Priorities List and,
as noted in Status
column,investigation
and/or remediation is
proceeding at various
stages.
(a) Xxxxxx Entered into consent
Terminals decree in September 1991
Site to perform certain
remedial actions and
reimburse EPA for certain past costs.
(b) Xxxxxx Entered into consent
Site order in September 1990
to conduct a RI/FS.
Entered into Consent
Order in May 1993 to
conduct Supplemental Pre-
Remedial Design Study.
(c) Xxxxxxxx Entered into consent
Site decree in June 1989 to
undertake remedial
action. Entered into
second consent decree
with EPA in September
1991, reimbursing EPA for
$2.5 Million past
response costs (SCC
allocated share less that
1%. Barring unexpected
developments, remedy has
been completed.
10 Xxxxx Barrel & Served with subpoena After searching records,
Drum Site August 1990 by PRP at SCC informally reported
Xxxxx Barrel & Drum to PRP that it had no
Superfund Site seek- information concerning
ing information disposals. No activity
about alleged SCC since 1990.
waste disposal
at site.
/TABLE
SCHEDULE 6.2
EXISTING INDEBTEDNESS
None.
SCHEDULE 6.3
EXISTING LIENS
1. A second priority security interest in favor of Chemical Bank
and Bank of America Illinois -- all domestic accounts receivable,
inventory, equipment, and stock of certain wholly-owned subsidiaries
of the Borrower.
2. Lloyds Bank Plc having some interest in the United Kingdom
accounts receivables and Prudential Assurance having an interest in
United Kingdom real property.
3. 1995 Taxes -- an item not yet payable.
4. Certain operating and capital leases of equipment.
5. Materialmen's claims not yet a lien for work done with respect
to environmental remediation.
6. Tooling used in the manufacturing process.
SCHEDULE 6.4
EXISTING GUARANTEE OBLIGATIONS
None.
EXHIBIT A
FORM OF
REVOLVING CREDIT NOTE
$____________ New York, New York
____________, 1995
FOR VALUE RECEIVED, the undersigned, Xxxxx Xxxxxx
Corporation, a Delaware corporation (the ``Borrower''), hereby
unconditionally promises to pay to the order of _______________
(the ``Lender'') at the office of Chemical Bank, located at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in lawful money of the
United States of America and in immediately available funds, on
the Termination Date the principal amount of (a)_____________
DOLLARS ($___________), or, if less, (b) the aggregate unpaid
principal amount of all Revolving Credit Loans made by the Lender
to the Borrower pursuant to subsection 2.1 of the Credit
Agreement, as hereinafter defined. The Borrower further agrees
to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the
rates and on the dates specified in subsections 2.7 and 2.9 of
such Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a
continuation thereof which shall be attached hereto and made a
part hereof the date and amount of each Revolving Credit Loan
made pursuant to the Credit Agreement and the date and amount of
each payment or prepayment of principal thereof. Each such
endorsement shall constitute prima facie evidence of the accuracy
of the information endorsed. The failure to make any such
endorsement shall not affect the rights of the Lender or the
obligations of the Borrower in respect of such Revolving Credit
Loan.
This Note (a) is one of the Revolving Credit Notes referred
to in the Debtor-in-Possession Credit Agreement dated as of
__________ ___, 1995 (as amended, supplemented or otherwise
modified from time to time, the ``Credit Agreement''), among the
Borrower, the Lender, the other banks and financial institutions
from time to time parties thereto and Chemical Bank, as agent,
(b) is subject to the provisions of the Credit Agreement and (c)
is subject to optional and mandatory prepayment in whole or in
part as provided in the Credit Agreement.
Upon the occurrence of any one or more of the Events of
Default, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable,
all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or
otherwise, hereby waive presentment, demand, protest and all
other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them
in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
XXXXX CORONA CORPORATION
By:
Name:
Title:
WINTHROP, STIMSON, XXXXXX & XXXXXXX
July 11, 1995
Chemical Bank, as Agent 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
And each of the Lenders parties to the Credit Agreement
referred to below
We have acted as counsel to Xxxxx Corona
Corporation, a Delaware corporation (the
"Borrower"), SCM (United Kingdom) Limited, a Delaware
corporation, and Xxxxx Xxxxxx Overseas Holdings, Inc., a
Delaware corporation, (collectively, the "Parties") in
connection with (a) the Debtor-in-Possession Credit
Agreement, dated as of July 10, 1995 (the "Credit
Agreement"), among the Borrower, the lenders parties
thereto (the "Lenders") and Chemical Bank, as agent for
the Lenders (in such capacity, the "Agent"), (b) the
Revolving Credit Notes, (c) the Security Agreement, (d)
the Subsidiary Guaranty and (e) the Guarantor Pledge
Agreement.
The opinions expressed below are furnished to
you pursuant to subsection 4.1(k)of the Credit
Agreement. Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.
In arriving at the opinions expressed below,
(a) we have examined and relied on the
originals, or copies certified or otherwise
identified to our satisfaction, of each of (1) the
Credit Agreement, (2) the Revolving Credit Notes dated
the date hereof and (3) the Security Agreement,
Subsidiary Guaranty, the Guarantor Pledge Agreement and
Borrower Pledge Agreement dated the date hereof (the
Credit Agreement, the Revolving Credit Notes and the
Security Agreement, Subsidiary Guaranty, the Guarantor
Pledge Agreement and Borrower Pledge Agreement being
hereinafter referred to collectively as the
"Transaction Documents");
(b) we have examined two (2) Connecticut form
UCC-1 Financing Statements and two (2) New York form
UCC-1 Financing Statements, each naming the Borrower as
debtor and the Agent as secured party
together with such other form UCC-1 Financing Statements
for California and Hawaii as you have furnished us on
the date hereof (collectively, the Financing
Statements");
(c) we have examined such corporate documents
and records of the Borrower and such other
instruments and certificates of public officials,
officers and
representatives of the Borrower and other Persons; and
(d) we have examined that certain Interim
Order dated July 10, 1995 (i) Authorizing
Post Petition Financing and (ii) Granting Senior Liens
and Priority Administrative Expense Claim Status (the
"Interim Order") together with the form of that certain
Final Order (i) Authorizing Post Petition Financing and
(ii) Granting Senior Liens and Priority Administrative
Expense Claim Status (the "Final Order")
which we have assumed will be entered on August 2, 1995
in the form annexed to the Credit Agreement.
In arriving at the opinions expressed below,
we have made such investigations of law as we
have deemed appropriate as a basis for such opinions.
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 the
Borrower and officers of the Borrower) and (c) the
conformity to authentic originals of documents submitted
to us as certified, conformed or photostatic copies.
For all purposes of this opinion, we have also
assumed, without any independent investigation
or inquiry on our part, that:
(a) the Collateral, as defined in the Security
Agreement and Borrower Pledge Agreement, exists and
the Borrower has title to such Collateral;
(b) the information contained in each one of the
Schedules attached to the Security Agreement,
Borrower Pledge Agreement and each one of the Financing
Statements is accurate in all material respects;
(c) Borrower will be in good standing in the States of
Connecticut and Hawaii on or before August 2,
1995; and
(d) payment in full pursuant to the Credit Agreement,
of all Obligations arising under a certain Amended and
Restated Credit Agreement dated as of April 7, 1995
and all "Prior Obligations" as defined in the Interim Order
has occurred.
When our opinions expressed below are stated
"to the best of our knowledge," we have made
reasonable and diligent investigation of the subject
matters of such opinions and have no reason to believe that
there exist any facts or other information that would
render such opinions incomplete or incorrect.
Based upon and subject to the foregoing, we are of
the opinion that:
l. Each Party (a) is duly organized, validly existing
and in good standing under the laws of Delaware, (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 and (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, except for the States of Connecticut and Hawaii.
The failure to be so qualified in any states (other than
Connecticut and Hawaii) in which the Borrower is not presently
qualified does not, in the aggregate, have a Material Adverse
Effect.
2. Upon the entry of the Interim Order, the Borrower
has the corporate power and authority, and the legal
right, to make, deliver and perform its obligations under the
Credit Agreement, the Security Agreement and each of the other
Transaction Documents to which it is a party, to
borrow under the Credit Agreement (to the extent set forth in
the Interim Order and then upon entry of the Final Order to the
extent set forth therein) and to grant security interests in
its property under the Security Agreement. Each Party other
than the Borrower has the corporate power and authority, and
the legal right to make, deliver, and perform its obligations
under the Transaction Documents to which it is a party. The
Borrower has taken all necessary corporate action to authorize
the borrowings on the terms and conditions of the Credit
Agreement, the Security Agreement, and the other Transaction
Documents and each Party has taken all necessary corporate
action to authorize the execution, delivery and performance of
the Transaction Documents to which it is a party. Except for
entry of the Interim and Final Orders, no consent or
authorization of, approval by, notice to, filing with or other
act by or in respect of, any Governmental Authority or any
other Person is required in connection with the borrowings
under the Credit Agreement, granting of security interests
under the Security Agreement or with the execution, delivery,
performance, validity or enforceability of the Credit
Agreement, the Security Agreement and the other Transaction
Documents.
3. Each of the Credit Agreement, Security Agreement
and the other Transaction Documents to which the
each Party is a party has been duly executed and delivered on
behalf of such Party and constitutes a legal, valid and binding
obligation of such Party, enforceable against the Borrower in
accordance with its terms as set forth in the Interim Order
and, upon its entry, the Final Order.
4. The execution and delivery of the Transaction
Documents to which any Party is a party, the
performance by the applicable Party of its obligations
thereunder, the consummation of the transactions contemplated
thereby, the compliance by the Parties and each of their
Subsidiaries with any of the provisions thereof, the borrowings
under the Credit Agreement and the use of proceeds thereof, all
as provided therein, will not violate, or constitute a default
under, any Requirement of Law or, to the best of our knowledge,
(and excepting any defaults resulting from the filing of the
Borrower's Chapter 11 petition), any Contractual
Obligations of the Borrower or of any of its Subsidiaries and
will not result in, or require, the creation or imposition of
any Lien on any of its or their respective properties or
revenues, except for the Liens created by the Security
Agreement, the Borrower Pledge Agreement and Guarantor Pledge
Agreement.
5. The entry of the Interim Order on the docket has
created in favor of the Agent, for the ratable
benefit of the Lenders, a valid and fully perfected security
interest in all of the Collateral as to which a first priority
(subject to Permitted Liens) security interest may be perfected
under the laws of the states in the United States in which the
Collateral is located.
6. To the best of our knowledge, no postpetition
litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or
threatened by or against the Borrower or any of its
Subsidiaries or against any of its or their respective
properties or revenues
(a) with respect to the Credit Agreement or any of
the other Transaction Documents or (b) which could
have a Material Adverse Effect on the postpetition business
activities of the Borrower.
7. To the best of our knowledge, (and excepting any
defaults resulting from the filing of the Borrowers
Chapter 11 petition), neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any
Contractual Obligations in any respect which could have a
Material Adverse Effect.
8. No Party is ( i ) an "investment company",
company "controlled" by an "investment company", or
a
within the meaning of the Investment Company Act of
1940, as amended, or (ii) a "holding company" as
defined in, or otherwise subject to regulation under, the
Public Utility Holding Company Act of 1935. No Party is
subject to regulation under any Federal or state statute or
regulation which limits its ability to incur Indebtedness.
Our opinions set forth in paragraph 3 above are
subject to any orders hereafter entered by the
Bankruptcy Court.
With respect to all borrowings made from and after
August 2, 1995, the Final Order shall have been
entered on the docket of such Court by the Clerk of the
Bankruptcy Court and shall not have been stayed, modified,
altered or reversed as of August 2, 1995.
We are members of the bar of the State of New York
and we express no opinion as to the laws of any
jurisdiction other than the laws of the State of New York, the
General Corporate Law of the State of Delaware and the Federal
laws of the United States of America.
Very truly yours,
/s/ Xxxxxxxx Xxxxxxx, Xxxxxx
Xxxxxxx
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Debtor-in-Possession Credit
Agreement, dated as of July 10, 1995, (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"),
among Xxxxx Xxxxxx Corporation (the "Borrower"), the Lenders
named therein and Chemical Bank, as agent for the Lenders (in
such capacity, the "Agent"). Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the 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 Effective Date (as
defined below), a ___% interest (the "Assigned Interest") in and
to the Assignor's rights and obligations under the Credit
Agreement with respect to those commitments contained in the
Credit Agreement as are set forth on Schedule I thereto in a
principal amount for each commitment as set forth on Schedule I
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
Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the 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 Credit Agreement or any other Loan Document
or any other instrument or document furnished pursuant hereto or
thereto; and (c) attaches the Note held by it pursuant to the
Credit Agreement and requests that the Agent exchange such Note
for a new Note payable to the Assignor (if the Assignor has
retained any interest in the Credit Agreement) and a new Note or
Notes payable to the Assignee in the respective amounts which
reflect the assignment being made hereby (and after giving effect
to any other assignments which have become effective on the
Effective Date).
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 Credit Agreement,
together with copies of the financial statements delivered
pursuant to subsection 3.1 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 Agent or any other Lender and
based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (d) appoints and
authorizes the Agent to take such action as agent on its behalf
and to exercise such powers and discretion under the Credit
Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto as are delegated to
the Agent by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance
with its terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender
including, if it is organized under the laws of a jurisdiction
outside the United States, its obligation pursuant to subsection
2.11(b) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance
shall be , 19 (the "Effective Date"). Following
the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance by it and recording by the
Agent pursuant to subsection 9.6 of the Credit Agreement,
effective as of the Effective Date (which shall not, unless
otherwise agreed to by the Agent, be earlier than five Business
Days after the date of such acceptance and recording by the
Agent).
5. Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignee whether such amounts have
accrued prior to the Effective Date or accrue subsequent to the
Effective Date. The Assignor and the Assignee shall make all
appropriate adjustments in payments by the Agent for periods
prior to the Effective Date or with respect to the making of this
assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall
be a party to the Credit Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations
of a Lender thereunder and under the other 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 Credit Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
8. The Assignor and Assignee respectively represent and
warrant to each other and to each of the Borrower and the Agent
that this Assignment and Acceptance, and the transaction
contemplated hereby, complies with the terms and provisions of
the Credit Agreement related hereto, including without limitation
subsection 9.6 thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first
above written by their respective duly authorized officers on
Schedule I hereto.
Schedule I
to Assignment and Acceptance
relating to the Amended and Restated
Revolving Credit Agreement,
dated as of April , 1995,
among
XXXXX XXXXXX CORPORATION,
the Lenders named therein
and
Chemical Bank, as agent for the Lenders (in such capacity, the
"Agent")
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Principal Commitment
Amount Assigned Percentage Assigned(1)
$ . %
[Name of Assignee] [Name of Assignor]
By: By:
Name: Name:
Title: Title:
Accepted:
Chemical Bank, as Agent
By
Name:
Title:
Consented To:
[Name of Borrower]
By
Name:
Title:
1. Calculate the Commitment Percentage that is assigned to at
least 15 decimal places and show as a percentage of the aggregate
commitments of all Lenders.
EXHIBIT D
FORM OF BORROWING CERTIFICATE
Pursuant to subsection 4.1(c) of the Debtor-in-Possession Credit
Agreement dated as of July 10, 1995 by and among Xxxxx Corona
Corporation, a Delaware corporation, as debtor and debtor-in-
possession, (the "Borrower"), Chemical Bank, as Agent and the
Lenders parties thereto (as the same may be amended, supplemented
or otherwise modified from time to time, the "Credit Agreement";
terms defined in the Credit Agreement being used herein as therein
defined), the Borrower hereby certifies as follows:
1. The representations and warranties of the borrower set forth
in the Loan Documents or which are contained in any
certificate, document or financial or other statement
furnished pursuant to or in connection with any Loan Documents
are true and correct n all material respects on and as of the
date hereof with the same effect as if made on and as of the
date hereof, except to the extent that such representations
and warranties related to an earlier date.
2. No Default or Event of Default has occurred and is continuing
as of the date hereof or after giving effect to the making of
the Loans as of the date hereof.
3. The Borrower is a corporation duly incorporated and validly
existing under the laws of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate on behalf of the Borrower as of the date indicated
below.
XXXXX XXXXXX CORPORATION,
as debtor and debtor-in-possession
By:
Title:
Date:
EXHIBIT E
BORROWING BASE CERTIFICATE
Pursuant to subsection 5.2(d) of the DEBTOR-IN-
POSSESSION dated as of July 10, 1995 (the "Credit Agreement"),
among XXXXX CORONA CORPORATION, a Delaware corporation, as debtor
and debtor-in-possession (the "Borrower"), the banks parties
thereto (the "Banks") and CHEMICAL BANK, as agent for the Banks
thereunder (in such capacity, the "Agent"), the Borrower hereby
certifies to the Agent as follows:
I. Set forth below for the Borrower and its Subsidiaries are
(1) the total amount of domestic accounts receivables
excluding Puerto Rico, (2) each item subtracted therefrom
pursuant to the definition of Eligible Accounts and (3) the
amount of Eligible Accounts, each as of the last day of the
fiscal month of __________, 199_.
Total Accounts __________________
Less adjustments to Accounts for:
(a) Accounts which do not meet the requirements of clause (a)
and (f) of the definition of "Eligible Accounts" in the
Credit Agreement __________________
(b) Accounts that are later than sixty (60) days after the due
date stated on the invoice therefor; __________________
(c) amounts of net credit balances the dates of which are
earlier than 60 days prior to the date of determination (as
calculated on the Report RBAR4515-A) with respect to the
aggregate Accounts of any Account Debtor with original due
dates more recent than 60 days prior to the date of
determination; __________________
(d) for the ten Accounts with the highest aggregate balances on
the accounts receivable aging summary aging of the Borrower,
the balance in the current to 60 days past due aging
categories, where 25% or more of the total face value of
such Account has been unpaid for more than 60 days, as
calculated on the Report RBAR4515-B __________________
(e) for all other Accounts, the aggregate balance in the current
to 60 days past due aging categories, where 50% or more of
the total face value of such Account has been unpaid for
more than 60 days, as calculated on the Report RBAR 4515-B
__________________
(f) advertising/preparation allowances, or "Key City"
allowances, volume and other rebate programs, and downward
price adjustments or price protection and transition
programs (collectively referred to as the "Programs"), equal
to the greater of (i) or (ii):
(i) allowance earned but not taken with respect to the
Programs, calculated as follows:
general ledger provision for the Programs, after
adjustments for additions and/or reversals
less credits issued (also referred to as payments) to
date
less total chargebacks requested by customers as
recorded on the Transaction Code Summary Aging of
Accounts
Total of (i) __________________
(ii) estimate of the current liability for the Programs,
calculated as follows:
a one-month rolling average of the last twelve months
of credits issued (also referred to as payments)
plus chargebacks requested by customers as recorded in
the current to 60 days past due aging categories on the
Transaction Code Summary Aging of Accounts
Total of (ii)
Greater of (i) or (ii)
(g) adjustments to reflect the return or rejection of, or any
loss of or damage to, any of the Inventory giving rise to
such Account, and for any material delivery, freight or
financing charges, or late or other fees, or set-offs,
counterclaims, defenses, or disputes existing or asserted
with respect to such Account __________________
(h) Accounts arising from transactions with employees, officers,
agents, directors, Stockholders, Subsidiaries or Affiliates
_________________
(i) Accounts arising from sales to the United States of America
or any state, territory, subdivision, department or agency
thereof, unless all applicable requirements of the
Assignment of Claims Act of 1940 have been met.
__________________
(j) Accounts arising from sales to debtors located outside the
United States not previously excluded __________________
(k) Accounts arising from sales to customers which are insolvent
or the subject of any bankruptcy case or insolvency
proceeding of any kind, unless such Account is due from such
Account Debtor as an administrative claim under the
Bankruptcy Code and the Agent, in the exercise of its
reasonable business judgment, deems such Account Debtor to
be creditworthy __________________
(l) non-trade receivables __________________
(m) retainages or holdbacks __________________
(n) Accounts which are not actually and absolutely owing to such
Borrower __________________
(o) Accounts which are contingent for any reason or have been
sold or discounted without recourse; __________________
(p) unbilled accounts __________________
(q) accounts unacceptable to the Required Lenders
__________________
(r) Accounts which should be charged off or written off as
uncollectible in accordance with the customary business
practice of the Borrower __________________
(s) Accounts which arise out of any claim in tort, is evidenced
by chattel paper, a promissory note, a negotiable
instrument, or any other instrument of any kind, unless the
Borrower has delivered and properly endorsed such chattel
paper, promissory note, negotiable instrument or other
instrument to the Agent, on behalf of the Required Lenders
__________________
(t) Accounts based on a cash on delivery sale, unless cash has
been received on but not yet applied to any such Account
________________
(u) Accounts arising out of the delivery of samples or trial
merchandise to customers of Account Debtors
__________________
Total Accounts Excluded __________________
Total Eligible Accounts __________________
Adjusted Eligible Accounts:
Eligible Accounts x 70% =
II. Set forth below for the Borrower and its Subsidiaries are
(1) total Inventory, (2) each item subtracted from total
Inventory pursuant to the definition of Eligible Inventory,
(3) Eligible Inventory, and (4) Eligible Service Depot
Inventory each as of the last day of the fiscal month of
_________, 199_.
Total domestic and in-transit Inventory from the Borrower's
Singapore and Mexico facilities __________________
Less Inventory consisting of:
(a) work-in-process and raw materials not previously excluded
__________________
(b) packaging materials and supplies __________________
(c) damaged or unsalable Inventory __________________
(d) Inventory located on premises other than those listed on
Schedule 4 of the Security Agreement __________________
(e) Inventory to be returned to suppliers _________________
(f) Inventory which has been consigned or sold pursuant to a
"xxxx and hold" or "sale or return" arrangement
_________________
(g) Inventory which is not subject to the Agent's duly
perfected, first priority Lien and no other Lien other than
Liens permitted by subsection 6.3 of the Credit Agreement
__________________
(h) reconditioned product, rework or discontinued (as each such
term is used in the inventory records of the Borrower
delivered to the Agent), Service Depot Inventory or
Defective Stock __________________
(i) Inventory which is in transit to third parties
__________________
(j) Inventory consisting of products using electrical current of
other than 110 volts _________________
(k) intercompany profit __________________
(l) Inventory unacceptable to the Required Lenders
__________________
Total Inventory Excluded __________________
Eligible (Non-Service Depot) Inventory
Adjusted Eligible (Non-Service Depot) Inventory:
Eligible (Non-Service Depot) Inventory x 40% =
Total Service Depot Inventory
Less: 30% of total Service Depot Inventory
Eligible Service Depot Inventory
Adjusted Eligible Service Depot Inventory (limited to the lesser
of the amount calculated below or $500,000):
Eligible Service Depot
Inventory X 20% = ______________
In Transit Inventory:
Finished goods Inventory in transit to the United States from
Samsung Corporation, Korea, and other approved vendors, and that
is subject to the Agent's security interest x 40% =
_______________
Total Borrowing Base:
Adjusted Eligible Accounts
Adjusted Eligible Service Depot Inventory
Adjusted Eligible (Non-Service Depot) Inventory
_____________
In Transit Inventory
Reserve for Ocean Freight, Customs Duty and Other Fees for
In Transit Inventory
Acceptance Obligations (________________)
Total Borrowing Base __________________
Terms defined in the Credit Agreement are used herein with their
meanings as defined therein.
By:
Title:
Dated as of
EXHIBIT F
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, is dated as of July 10, 1995, and made by
XXXXX CORONA CORPORATION, a Delaware corporation, as a debtor and
debtor in possession (the "Borrower"), in favor of CHEMICAL BANK,
as Agent (in such capacity, the "Agent") for the lenders party to
the Debtor-in-Possession Credit Agreement referred to below.
W I T N E S S E T H:
WHEREAS, Borrower, Agent and the lenders party thereto
("Lenders") have entered into a Debtor-in-Possession Credit
Agreement dated as of July 10, 1995 (as amended, restated,
supplemented or otherwise modified from time to time, the "DIP
Credit Agreement"); and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the
Borrower under the DIP Credit Agreement that the Borrower shall
have executed and delivered this Security Agreement to the Agent
for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Agent and the Lenders to enter into the DIP Credit Agreement
and to induce the Lenders to make their respective extensions of
credit to the Borrower, the Borrower hereby agrees with the Agent,
for the ratable benefit of the Lenders, as follows:
1. Defined Terms.
1.1 Definitions. (a) Unless otherwise defined herein,
terms defined in the DIP Credit Agreement and used herein shall
have the meanings given to them in the DIP Credit Agreement, and
the following terms which are defined in the Uniform Commercial
Code in effect in the State of New York on the date hereof are used
herein as so defined: Accounts, Chattel Paper, Documents,
Equipment, Fixtures, General Intangibles, Instruments, Inventory
and Proceeds.
(b) The following terms shall have the following meanings:
"Agreement": this Security Agreement, as the same may be
amended, modified or otherwise supplemented from time to time.
"Collateral": as defined in Section 2 of this Agreement.
"Collateral Account": any collateral account established by
the Agent as provided in subsection 5.3 or subsection 7.2.
"Obligations": the collective reference to (a) the unpaid
principal of and interest on the Notes, the L/C Obligations and all
other obligations and liabilities of the Borrower to the Agent and
the Lenders (including, without limitation, interest accruing at
the then applicable rate provided in the DIP Credit Agreement after
the Termination Date), 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
DIP Credit Agreement, the Notes, this Agreement, the other Loan
Documents 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 Agent or to the Lenders that are
required to be paid by the Borrower pursuant to the terms of the
DIP Credit Agreement or this Agreement or any other Loan Document)
and (b) the Prior Indebtedness.
"Patents": (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including,
without limitation, any thereof referred to in Schedule 1 hereto,
and (b) all applications for letters patent of the United States or
any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any
thereof referred to in Schedule 1 hereto.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to the Borrower of any right to
manufacture, use or sell any invention covered by a Patent,
including, without limitation, any thereof referred to in Schedule
1 hereto.
"Trademarks": (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names,
trade styles, service marks, logos and other source or business
identifiers, and the goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in
the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any
other country or any political subdivision thereof, or otherwise,
including, without limitation, any thereof referred to in Schedule
2 hereto, and (b) all renewals thereof.
"Trademark License": any agreement, written or oral,
providing for the grant by or to the Borrower of any right to use
any Trademark, including, without limitation, any thereof referred
to in Schedule 2 hereto.
"UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
1.2 Other Definitional Provisions. (a) 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.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.
2. Grant of Security Interest. As collateral security for
the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the
Obligations, the Borrower hereby grants to the Agent for the
ratable benefit of the Lenders a security interest in all of the
property of the estate of the Borrower (as such term is defined in
Section 541 of the Bankruptcy Code), including all of the following
property, in each case whether now owned or at any time hereafter
acquired by the Borrower or in which the Borrower now has or at any
time in the future may acquire any right, title or interest and
wherever the same may be located (collectively, the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all Fixtures;
(g) all General Intangibles;
(h) all Instruments;
(i) all Inventory;
(j) all Patents;
(k) all Patent Licenses;
(l) all Trademarks;
(m) all Trademark Licenses;
(n) all books and records pertaining to the Collateral; and
(o) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing.
3. Representations and Warranties. The Borrower hereby
represents and warrants that:
3.1 Title; No Other Liens. Except for the security interest
granted to the Agent for the ratable benefit of the Lenders
pursuant to this Agreement and the other Liens permitted to exist
on the Collateral pursuant to the DIP Credit Agreement, the
Borrower owns each item of the Collateral free and clear of any and
all Liens or claims of others. No security agreement, financing
statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except
such as have been filed in favor of the Agent, for the ratable
benefit of the Lenders, pursuant to this Agreement or as are
permitted pursuant to the DIP Credit Agreement.
3.2 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) constitute perfected, non-
voidable security interests in the Collateral for the ratable
benefit of the Lenders, (b) are prior to all other Liens on the
Collateral in existence on the date hereof except for Liens
permitted to exist pursuant to the DIP Credit Agreement and (c) are
enforceable as such against (1) all creditors of and purchasers
from the Borrower (except purchasers of Inventory in the ordinary
course of business) and (2) any Person having any interest in the
real property where any of the Equipment is located.
3.3 Inventory and Equipment. The Inventory and the Equipment
constituting part of the Collateral are kept at the locations
listed on Schedule 3 hereto.
3.4 Chief Executive Office. The Borrower's chief executive
office and chief place of business is located at 00 Xxxxxx Xxxxxx,
Xxx Xxxxxx, Xxxxxxxxxxx.
4. Covenants. The Borrower covenants and agrees with the
Agent and the Lenders that, from and after the date of this
Agreement until this Agreement is terminated and the security
interests created hereby are released:
4.1 Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be
or become evidenced by any Instrument or Chattel Paper, such
Instrument or Chattel Paper shall be immediately delivered to the
Agent, duly indorsed in a manner satisfactory to the Agent, to be
held as Collateral pursuant to this Agreement.
4.2 Marking of Records. The Borrower will xxxx its books and
records pertaining to the Collateral to evidence this Agreement and
the security interests created hereby.
4.3 Maintenance of Insurance. (a) The Borrower will
maintain, with financially sound and reputable companies, insurance
policies (1) insuring the Inventory and Equipment constituting part
of the Collateral against loss by fire, explosion, theft and such
other casualties as may be reasonably satisfactory to the Agent and
(2) insuring the Borrower, the Agent and the Lenders against
liability for personal injury and 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 Agent and the Lenders, with losses payable to the Borrower,
the Agent and the Lenders as their respective interests may appear.
(b) All such insurance shall (1) 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 Agent of written notice thereof, (2) name the Agent
and the Lenders as additional insured parties and, with respect to
property insurance policies only, having lender's loss payable only
endorsements naming the Agent and the Lenders as loss payees and
reasonably satisfactory in all material respects to the Agent and
(3) be otherwise reasonably satisfactory in all material respects
to the Agent, with losses payable under the property insurance
policies to the Borrower, to the Agent and the Lenders as their
respective interests may appear. If the Borrower fails to provide
and pay for any insurance required herein, the Agent may, at the
Borrower's expense, procure the same, but shall not be under any
obligation to do so.
(c) The Borrower shall deliver to the Agent and the Lenders
a report of a reputable insurance broker with respect to such
insurance during the first month of each fiscal year and such
supplemental reports with respect thereto as the Agent may from
time to time reasonably request.
4.4 Payment of Obligations. The Borrower 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 the 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 the Collateral,
except that no such charge need be paid 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 the Borrower and such
proceedings do not involve any material danger of the sale,
forfeiture or loss of any of the Collateral or any interest
therein.
4.5 Maintenance of Perfected Security Interest; Further
Documentation. (a) The Borrower shall maintain the security
interest created by this Agreement as a first, perfected security
interest subject only to Liens permitted to exist pursuant to the
DIP Credit Agreement and shall defend such security interest
against claims and demands of all Persons whomsoever.
(b) At any time and from time to time, upon the written
request of the Agent, and at the sole expense of the Borrower, the
Borrower will promptly and duly execute and deliver such further
instruments and documents and take such further action as the 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, including, without limitation, the filing of any
financing or continuation statements under the UCC in effect in any
jurisdiction with respect to the security interests created hereby.
4.6 Changes in Locations, Name, etc. The Borrower will not:
(a) permit any of the Inventory or Equipment constituting part
of the Collateral to be kept at a location other than those listed
on Schedule 4 hereto (it being understood that such Inventory and
Equipment may be relocated among such locations in the ordinary
course of the Borrower's Business); or
(b) change the location of its chief executive office and
chief place of business from that specified in subsection 3.4;
(c) change its name, identity or corporate structure to such
an extent that any financing statement filed by the Agent in
connection with this Agreement would become seriously misleading,
unless it shall have given the Agent and the Lenders at least 30
days' prior written notice of such change.
4.7 Further Identification of Collateral. The Borrower will
furnish to the Agent and the Lenders from time to time statements
and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent
may reasonably request, all in reasonable detail.
4.8 Notices. The Borrower will advise the Agent and the
Lenders promptly, in reasonable detail, at their respective
addresses set forth in the DIP Credit Agreement of:
(a) any Lien (other than security interests created hereby or
Liens permitted under the DIP Credit Agreement) on, or claim
asserted against, any of the Collateral; 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 the Collateral or on the security interests
created hereby.
4.9 Indemnification. The Borrower agrees to pay, and to save
the Agent and the Lenders harmless from, any and all liabilities,
costs and expenses (including, without limitation, legal fees and
expenses, which may include the allocated cost of in-house counsel)
(1) with respect to, or resulting from any delay in paying, any and
all excise, sales or other taxes which may be payable or determined
to be payable with respect to any of the Collateral, (2) with
respect to, or resulting from, any delay in complying with any
Requirement of Law applicable to any of the Collateral and (3) in
connection with any of the transactions contemplated by this
Agreement.
5. Provisions Relating to Accounts.
5.1 Borrower Remains Liable under Accounts. Anything herein
to the contrary notwithstanding, the Borrower shall remain liable
under each of the 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 to each such Account. Neither the 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 Agent or any Lender of any payment
relating to such Account pursuant hereto, nor shall the Agent or
any Lender be obligated in any manner to perform any of the
obligations of the Borrower 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 under any Account (or any agreement giving rise thereto), 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.
5.2 Analysis of Accounts. The 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 Borrower
shall furnish all such assistance and information as the Agent may
require in connection with such test verifications. At any time
and from time to time, upon the Agent's reasonable request and at
the expense of the Borrower, the Borrower shall cause independent
public accountants or others reasonably satisfactory to the Agent
to furnish to the Agent reports showing reconciliations, aging and
test verifications of, and trial balances for, the Accounts. The
Agent in its own name or on behalf of the Lenders may communicate
with account debtors on the Accounts to verify with them to the
Agent's satisfaction the existence, amount and terms of any
Accounts.
5.3 Collections on Accounts. (a) The Agent hereby
authorizes the Borrower to collect the Accounts, subject to the
Agent's direction and control, and the Agent may curtail or
terminate said authority at any time after the occurrence and
during the continuance of a Default. If required by the Agent at
any time after the occurrence and during the continuance of a
Default, any payments of Accounts, when collected by the Borrower,
(1) shall be forthwith (and, in any event, within two Business
Days) deposited by the Borrower in the exact form received, duly
indorsed by the Borrower to the Agent if required, in a Collateral
Account maintained under the sole dominion and control of the
Agent, subject to withdrawal by the Agent for the account of the
Lenders only as provided in subsection 7.3, and (2) until so turned
over, shall be held by the Borrower in trust for the Agent and the
Lenders, segregated from other funds of the Borrower.
(b) 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.
(c) At the Agent's request, the Borrower shall deliver to the
Agent all original and other documents evidencing, and relating to,
the agreements and transactions which gave rise to the Accounts,
including, without limitation, all original orders, invoices and
shipping receipts.
5.4 Representations and Warranties. (a) No amount payable
to the Borrower under or in connection with any Account is
evidenced by any Instrument or Chattel Paper which has not been
delivered to the Agent.
(b) The places where the Borrower keeps its records
concerning the Accounts are 00 Xxxxxx Xxxxxx, Xxx Xxxxxx,
Xxxxxxxxxxx and 000 Xxxxx Xxxxx 00, Xxxxxxxx, Xxx Xxxx.
(c) None of the obligors on any Accounts is a Governmental
Authority.
5.5 Covenants. (a) The amount represented by the Borrower
to the Lenders from time to time as owing by each account debtor or
by all account debtors in respect of the Accounts will at such time
be the correct amount actually owing by such account debtor or
debtors thereunder.
(b) The Borrower will not amend, modify, terminate or waive
any agreement giving rise to an Eligible Account in any manner
which could reasonably be expected to materially adversely affect
the value of such Account as Collateral.
(c) The Borrower will not fail to exercise promptly and
diligently each and every material right which it may have under
each agreement giving rise to an Eligible Account (other than any
right of termination).
(d) The Borrower will not fail to deliver to the Agent a copy
of each material demand, notice or document received by it relating
in any way to any agreement giving rise to an Eligible Account.
(e) Other than in the ordinary course of business as
generally conducted by the Borrower over a period of time, the
Borrower will not grant any extension of the time of payment of any
of the Accounts, compromise, compound or settle the same for less
than the full amount thereof, release, wholly or partially, any
Person liable for the payment thereof, or allow any credit or
discount whatsoever thereon.
(f) The Borrower will not remove its books and records from
the location specified in paragraph 5.4(b).
(g) In any suit, proceeding or action brought by the Agent or
any Lender under any Account for any sum owing thereunder, the
Borrower will save, indemnify and keep the Agent and such Lender
harmless from and against all expense, loss or damage suffered by
reason of any defense, setoff, counterclaim, recoupment or
reduction or liability whatsoever of the account debtor thereunder,
arising out of a breach by the Borrower of any obligation
thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor
or its successors from the Borrower.
6. Provisions Relating to Patents and Trademarks.
6.1 Representations and Warranties. (a) Schedule 1 hereto
includes all Patents and Patent Licenses owned by the Borrower in
its own name as of the date hereof.
(b) Schedule 2 hereto includes all Trademarks and Trademark
Licenses owned by the Borrower in its own name as of the date
hereof.
(c) To the best of the Borrower's knowledge, each Patent and
Trademark is valid, subsisting, unexpired, enforceable and has not
been abandoned.
(d) Except as set forth in either Schedule 1 or Schedule 2,
none of such Patents and Trademarks is the subject of any licensing
or franchise agreement.
(e) To the best of the Borrower's knowledge, no holding,
decision or judgment has been rendered by any Governmental
Authority which would limit, cancel or question the validity of any
Patent or Trademark.
(f) To the best of the Borrower's knowledge, no action or
proceeding is pending (other than with respect to any pending
Patent and Trademark applications) (1) seeking to limit, cancel or
question the validity of any Patent or Trademark, or (2) which, if
adversely determined, would have a material adverse effect on the
value of any Patent or Trademark.
6.2 Covenants.
(a) The Borrower (either itself or through licensees) will,
except with respect to any Trademark that the Borrower shall
reasonably determine is of negligible economic value to it, (1)
continue to use each Trademark on each and every trademark class of
goods applicable to its current line as reflected in its current
catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-
use, (2) maintain as in the past the quality of products and
services offered under such Trademark, (3) employ such Trademark
with the appropriate notice of registration, (4) not adopt or use
any xxxx which is confusingly similar or a colorable imitation of
such Trademark unless the Agent, for the ratable benefit of the
Lenders, shall obtain a perfected security interest in such xxxx
pursuant to this Agreement, and (5) not (and not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby any Trademark may become invalidated.
(b) The Borrower will not, except with respect to any Patent
that the Borrower shall reasonably determine is of negligible
economic value to it, do any act, or omit to do any act, whereby
any Patent may become abandoned or dedicated.
(c) The Borrower will notify the Agent and the Lenders
immediately if it knows, or has reason to know, that any
application or registration relating to any material Patent or
Trademark may become abandoned or dedicated, or of any adverse
determination or development (including, without limitation, the
institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office or any
court or tribunal in any country) regarding the Borrower's
ownership of any material Patent or Trademark or its right to
register the same or to keep and maintain the same.
(d) Whenever the Borrower, either by itself or through any
agent, employee, licensee or designee, shall file an application
for the registration of any material Patent or Trademark with the
United States Patent and Trademark Office or any similar office or
agency in any other country or any political subdivision thereof,
the Borrower shall report such filing to the Agent and the Lenders
within five Business Days after the last day of the fiscal quarter
in which such filing occurs. Upon request of the Agent, the
Borrower shall execute and deliver any and all agreements,
instruments, documents, and papers as the Agent may request to
evidence the Agent's and the Lenders' security interest in any
Patent or Trademark and the goodwill and general intangibles of the
Borrower relating thereto or represented thereby;
(e) Subject to the provisions of subsections 6.2(a) and (b),
the Borrower will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United
States Patent and Trademark Office, or any similar office or agency
in any other country or any political subdivision thereof, to
maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the Patents and
Trademarks, including, without limitation, filing of applications
for renewal, affidavits of use and affidavits of incontestability;
provided, however, that this subsection 6.2(e) shall not be deemed
to obligate the Borrower to continue the prosecution of any
application which the Borrower reasonably believes, after
consultation with the Agent, is not patentable or registrable or is
of insignificant value to it.
(f) In the event that the Borrower should reasonably become
aware that any Patent or Trademark included in the Collateral is
infringed, misappropriated or diluted by a third party, the
Borrower shall promptly notify the Agent and the Lenders after it
learns thereof and shall, unless the Borrower shall reasonably
determine that such Patent or Trademark is of negligible economic
value to the Borrower, which determination the Borrower shall
promptly report to the Agent and the Lenders, promptly xxx for
infringement, misappropriation or dilution, to seek injunctive
relief where appropriate and to recover any and all damages for
such infringement, misappropriation or dilution, or take such other
actions as the Borrower shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark.
7. Remedies.
7.1 Notice to Account Debtors. Upon the request of the Agent
at any time after the occurrence and during the continuance of an
Event of Default, the Borrower shall notify account debtors on the
Accounts that the Accounts have been assigned to the Agent for the
ratable benefit of the Lenders and that payments in respect thereof
shall be made directly to the Agent.
7.2 Proceeds to be Turned Over To Agent. In addition to the
rights of the Agent and the Lenders specified in subsection 5.3
with respect to payments of Accounts, if an Event of Default shall
occur and be continuing all Proceeds received by the Borrower
consisting of cash, checks and other near-cash items shall be held
by the Borrower in trust for the Agent and the Lenders, segregated
from other funds of the Borrower, and shall, forthwith upon receipt
by the Borrower, be turned over to the Agent in the exact form
received by the Borrower (duly indorsed by the Borrower to the
Agent, if required) and held by the Agent in a Collateral Account
maintained under the sole dominion and control of the Agent. All
Proceeds while held by the Agent in a Collateral Account (or by the
Borrower in trust for the Agent and the Lenders) shall continue to
be held as collateral security for all the Obligations and shall
not constitute payment thereof until applied as provided in
subsection 7.3.
7.3 Application of Proceeds. At such intervals as may be
agreed upon by the Borrower and the Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the
Agent's election, the Agent may apply all or any part of Proceeds
held in any Collateral Account in payment of the Obligations in
such order as the Agent may elect, and any part of such funds which
the Agent elects not so to apply and deems not required as
collateral security for the Obligations shall be paid over from
time to time by the Agent to the Borrower or to whomsoever may be
lawfully entitled to receive the same. Any balance of such
Proceeds remaining after the Obligations shall have been paid in
full and the Commitments shall have been terminated shall be paid
over to the Borrower or to whomsoever may be lawfully entitled to
receive the same.
7.4 UCC Remedies. If an Event of Default shall occur and be
continuing, the Agent, on behalf of the Lenders, 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 UCC. Without limiting the generality
of the foregoing, the 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 and the three
business days' notice provided in Section 7 of the DIP Credit
Agreement) to or upon the Borrower or any other Person (all and
each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give 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 Agent or
any Lender or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or
on credit or for future delivery without assumption of any credit
risk. The Agent or any Lender shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right or equity of redemption
in the Borrower, which right or equity is hereby waived or
released. The Borrower further agrees, at the Agent's request, to
assemble the Collateral and make it available to the Agent at
places which the Agent shall reasonably select, whether at the
Borrower's premises or elsewhere. The 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 Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of the
Obligations, in such order as the Agent may elect, and only after
such application and after the payment by the Agent of any other
amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the UCC, need the Agent account
for the surplus, if any, to the Borrower. To the extent permitted
by applicable law, the Borrower waives all claims, damages and
demands it may acquire against the Agent or any Lender arising out
of the exercise by them of any rights hereunder. If any notice of
a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper
if given at least 10 days before such sale or other disposition.
7.5 Deficiency. The Borrower shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Obligations and the fees and
disbursements of any attorneys employed by the Agent or any Lender
to collect such deficiency.
7.6 Borrowing Orders. Notwithstanding anything to the
contrary contained in this Agreement, the Agent's right to exercise
rights and remedies hereunder with respect to the Collateral shall
be subject to (i) the requirements of the DIP Credit Agreement,
(ii) the Interim Borrowing Order and (iii) once entered, the Final
Borrowing Order.
8. Agent's Appointment as Attorney-in-Fact; Agent's
Performance of Borrower's Obligations.
8.1 Powers. The Borrower hereby irrevocably constitutes and
appoints the Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of the
Borrower and in the name of the Borrower or in its own name, from
time to time in the Agent's discretion, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing,
the Borrower hereby gives the Agent the power and right, on behalf
of the Borrower, without assent by the Borrower, to do the
following:
(a) in the case of any Account, at any time when the
authority of the Borrower to collect the Accounts has been
curtailed or terminated pursuant to paragraph 5.3(a), or in the
case of any other Collateral, at any time when any Event of Default
shall have occurred and is continuing, in the name of the Borrower
or its own name or the names of the Lenders, to take possession of
and indorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due under any Account,
Instrument, General Intangible or Contract or with respect to any
other Collateral and to file any claim or to take any other action
or proceeding in any court of law or equity or otherwise deemed
appropriate by the Agent for the purpose of collecting any and all
such moneys due under any Account, Instrument, General Intangible
or Contract or with respect to any other Collateral whenever
payable;
(b) in the case of any Patents or Trademarks, to execute and
deliver any and all agreements, instruments, documents, and papers
as the Agent may request to evidence the Agent's and the Lenders'
security interest in any Patent or Trademark and the goodwill and
general intangibles of the Borrower relating thereto or represented
thereby;
(c) to pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, to effect any repairs or any
insurance called for by the terms of this Agreement and to pay all
or any part of the premiums therefor and the costs thereof;
(d) to execute, in connection with the sale provided for in
Section 7.4 hereof, any indorsements, assignments or other
instruments of conveyance or transfer with respect to the
Collateral; and
(e) upon the occurrence and during the continuance of any
Event of Default, (1) 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 Agent or as the
Agent shall direct; (2) to ask or demand for, collect, receive
payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising
out of any Collateral; (3) 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; (4) 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; (5) to defend
any suit, action or proceeding brought against the Borrower with
respect to any Collateral; (6) to settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, to
give such discharges or releases as the Agent may deem appropriate;
(7) to assign any Patent or Trademark (along with the goodwill of
the business to which any such Patent or Trademark pertains),
throughout the world for such term or terms, on such conditions,
and in such manner, as the Agent shall in its sole discretion
determine; and (8) 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 Agent were the
absolute owner thereof for all purposes, and to do, at the Agent's
option and the Borrower's expense, at any time, or from time to
time, all acts and things which the Agent deems necessary to
protect, preserve or realize upon the Collateral and the Agent's
and the Lenders' security interests therein and to effect the
intent of this Agreement, all as fully and effectively as the
Borrower might do.
8.2 Performance by Agent of Borrower's Obligations. If the
Borrower fails to perform or comply with any of its agreements
contained herein, the Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
8.3 Borrower's Reimbursement Obligation. The expenses of the
Agent incurred in connection with actions undertaken as provided in
this Section, together with interest thereon at a rate per annum
equal to 6 1/2% above the ABR from the date of payment by the Agent to
the date reimbursed by the Borrower, shall be payable by the
Borrower to the Agent on demand.
8.4 Ratification; Power Coupled With An Interest. The
Borrower 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 until this Agreement is terminated and
the security interests created hereby are released.
9. Duty of Agent. The 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 UCC or otherwise, shall
be to deal with it in the same manner as the Agent deals with
similar property for its own account. Neither the Agent, any
Lender nor any of their respective directors, officers, employees
or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral
upon the request of the Borrower or any other Person or to take any
other action whatsoever with regard to the Collateral or any part
thereof. The powers conferred on the Agent and the Lenders
hereunder are solely to protect the Agent's and the Lenders'
interests in the Collateral and shall not impose any duty upon the
Agent or any Lender to exercise any such powers. The Agent and the
Lenders 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 the Borrower for any act or failure to act
hereunder, except for their own gross negligence or willful
misconduct.
10. Execution of Financing Statements. Pursuant to Section
9-402 of the UCC, the Borrower authorizes the Agent to file
financing statements with respect to the Collateral without the
signature of the Borrower in such form and in such filing offices
as the Agent reasonably determines appropriate to perfect the
security interests of the Agent under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be
sufficient as a financing statement for filing in any jurisdiction.
The Agent shall, at the Borrower's expense, provide the Borrower
with prior written notice of such filing, as well as a stamped file
copy of such financing statement following any such filing.
11. Authority of Agent. The Borrower acknowledges that the
rights and responsibilities of the Agent under this Agreement with
respect to any action taken by the Agent or the exercise or non-
exercise by the 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 Agent and
the Lenders, be governed by the DIP Credit Agreement and by such
other agreements with respect thereto as may exist from time to
time among them, but, as between the Agent and the Borrower, the
Agent shall be conclusively presumed to be acting as agent for the
Lenders with full and valid authority so to act or refrain from
acting, and the Borrower shall be under no obligation, or
entitlement, to make any inquiry respecting such authority.
12. Notices. All notices, requests and demands to or upon
the Agent or the Borrower to be effective shall be in writing (or
by telex, fax or similar electronic transfer confirmed in writing)
and shall be deemed to have been duly given or made (a) when
delivered by hand or (b) if given by mail, when deposited in the
mails by certified mail, return receipt requested, or (c) if by
telex, fax or similar electronic transfer, when sent and receipt
has been confirmed, addressed to the Agent or the Borrower at its
address or transmission number for notices provided in subsection
9.2 of the DIP Credit Agreement. The Agent and the Borrower may
change their addresses and transmission numbers for notices by
notice in the manner provided in this Section.
13. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
14. Amendments in Writing; No Waiver; Cumulative Remedies.
14.1 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 the Borrower
and the Agent, provided, that any provision of this Agreement may
be waived by the Agent and the Lenders in a letter or agreement
executed by the Agent or by telex or facsimile transmission from
the Agent.
14.2 No Waiver by Course of Conduct. Neither the Agent nor
any Lender shall by any act (except by a written instrument
pursuant to subsection 14.1 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 Agent or
any Lender, any right, power or privilege hereunder shall operate
as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Agent or such Lender would
otherwise have on any future occasion.
14.3 Remedies Cumulative. 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.
15. Section Headings. The section and subsection 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.
16. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of the Borrower (which shall
include a Chapter 7 or Chapter 11 trustee for the Borrower) and
shall inure to the benefit of the Agent and the Lenders and their
successors and assigns.
17. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State
of New York.
18. Chapter 11 Fees and Expenses. Notwithstanding anything
to the contrary contained herein, none of the terms or conditions
hereunder shall be deemed to alter, limit or impair the provisions
of Section 2.23 of the DIP Credit Agreement.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the undersigned has caused this Security
Agreement to be duly executed and delivered as of the date first
above written.
XXXXX XXXXXX CORPORATION
By
Title
Schedule 1
PATENTS AND PATENT LICENSES
Schedule 2
TRADEMARKS AND TRADEMARK LICENSES
Schedule 3
INVENTORY AND EQUIPMENT
Item
Location
Inventory 000 Xxxxx 00 Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
0000 Xxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Citywide Transp. Co.
Trucking and Warehousing
000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxx 00000
Equipment 000 Xxxxx 00 Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Exhibit G
Xxxxx Corona
Collateral Monitoring Reporting Requirements
Documents to be Submitted to the Bank
Reporting Frequency - Monthly:
1. Exhibit E - Borrowing Base Certificate with supporting
documentation for ineligible accounts receivable and
inventory and Monthly Activity Report (See #14 and #15
below).
2. Reconciliation of Month End A/R Aging Report to Monthly
Activity Report.
3. Consolidated Financial Statements and "Monthly Reporting
Package", including Commentary and Executive Summary.
4. Fiscal Calendar
5. Transaction Code Summary Aging by Customer and in Total
6. Month to Date A/R Transaction Record (Report NBAR2315)
7. "Net Invoice Amount by Order Type" - Detail Gross Sales and
Credits by Order Type #1 through #7.
8. Ten Largest Customer A/R Balances per the most recent aging
and Subsequent Cash Collections of these balances.
9. Summarized Inventory Perpetual referred to as "Domestic
Typewriter Inventory" and "Domestic Accessory Inventory"
Reports, reconciled to Summary Page of "Finished Goods
Inventory by Detail Account" (RBGLO817)
10. Finished Good Inventory by Location, reconciled to
"Inventory Valuation Report"(RBCI7201B)
11. Gross Margin Analysis by Product Line for "Domestic" and "New
Products". Please provide Monthly and Year to Date Reports
compared to Prior Year.
12. Aged Accounts Payable Report - Summary by Vendor
13. Cash Disbursement Ledger (Upon Request)
14. Detailed Supporting Documentation (mutually exclusive) for Ineligibles:
Accounts Receivable:
>60 Days Past Due
Credit Reclassifications (Report RBAR4515-A)
25% Cross Aging Report for Ten Largest Customer A/R Balances
50% cross Aging for all Other Customers (Report RBAR4515-B)
For Adv ertising/Preparation Allowances, Volume and Other
Rebate Programs, Price Protection and Transition Programs,
please provide the calculation of: (fI) allowance earned
but not taken, and (fII) estimated of current liability as
outlined in the Borrowing Base Certificated on Exhibit E.
Supporting documentation to include: "Marketing Reserves Summary,
Life to Date, As of Month End", and "Marketing Program Reserves,
Fiscal Year (93-94-95) Payments, Most Recent 20 Months".
Charge backs: Returned Merchandise
Customer Claiming Short Shipments
Other (Including Unearned Discounts,
(including finance charges)
unidentified underpayments, freight and
vendor audit adjustments)
Consignment
Government
Employee
Inventory:
Reconditioned Product (Department 283)
Service Depot (Department 390)
Rework (Department 277)
Discontinued Typewriters and Word Processors
Goods on Consignment
Defective Stock
Reserve for Ocean Freight, Customs Duty, and Other Fees for
In-transit Inventory from Singapore
15. Detailed Supporting Documentation for Monthly Accounts
Receivable Activity Report (Exhibit_____):
Summary Page of Invoice Register (Report 701-34)
Lockbox Deposit Activity Sheet and JV #120022
Reports should be addressed to:
Xxxx Xxxxxxx
Chemical Bank
000 Xxxx Xxxxxx-00xx Xxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxx Corona Exhibit_____
Monthly Activity Report
As of________________________
Beginning of Month Accounts Receivable __________
Gross Invoices - Code 01 & Code 07 __________
Other Gross Sales __________
Collection Receipts Applied __________
Cash Discounts __________
Returns (Never Ordered) - Code 02 __________
Net Credit/Rebills - Code 03 & Code 05 __________
Defective Units - Code 04 __________
Price Adjustments - Code 06 __________
Write Offs - Net of Reversals __________
Other Debit/Credit Adjustments __________
End of Month Accounts Receivable __________
The undersigned certifies the information provided in this report
to Chemical Bank is accurate based on the accounting records of
Xxxxx Xxxxxx
___________________________________________
EXHIBIT H
UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE
IN RE: XXXXX CORONA CORP.,
Debtors.
) In Proceedings for a
) Reorganization Under Chapter 11
) Case No.95-788HSB
)
)
)
FINAL ORDER (i) AUTHORIZING POST PETITION FINANCING
AND (iv) GRANTING SENIOR LIENS AND
PRIORITY ADMINISTRATIVE EXPENSE CLAIM STATUS
Upon the motion of the above-captioned Debtor and Debtor-in-
Possession dated July ,1995 (the "Motion") for authority,
pursuant to Section 364(c) of the United States Bankruptcy Code,
11 U.S.C. Section 101 et seq. (the "Bankruptcy Code") and
Bankruptcy Rule 4001(c), inter alia, to (i) borrow funds and
receive letter of credit financing from Chemical Bank and Bank of
America Illinois (jointly and severally, the "Lenders") pursuant
to that certain debtor-in-possession credit agreement, security
agreement and the related agreements, instruments and documents
substantially in the form annexed to the Motion (collectively,
the "Credit Agreement"); (ii) grant security interests for the
loans, advances and obligations owed and to be incurred by the
Debtor pursuant to the Credit Agreement; and (iii) grant super
priority administrative claim status in respect of such loans,
advances and obligations; and it further appearing that:
a. The ability of the Debtor to continue in business so that it
can attempt to reorganize under the Bankruptcy Code depends upon
obtaining the relief requested in the Motion.
b. Notice of the relief requested in the Motion, including a
sufficient description of the terms of the Credit Agreement, has
been given, inter alia, to the United
States Trustee and all parties entitled to notice pursuant to
Bankruptcy Rule 4001(c).
NOW, THEREFORE, upon the record of the interim hearing
held before this
Court with respect to the Motion on July 10,1995 and the final
hearing on July ,1995, it is hereby found that:(1)
A. On July 5, 1995 (the "Petition Date"), the Debtor
filed a voluntary Chapter 11 petition under the
Bankruptcy Code. No trustee or examiner has been
appointed. The Debtor is authorized to operate its
business as debtor-in-possession.
B. The Debtor is unable to obtain the financing that is
contemplated by the Credit Agreement on an unsecured
basis under Section 503(b)(1) of the Bankruptcy Code.
C. Sufficient and adequate notice of the relief
requested in the Motion has been given pursuant to
Sections 102(1) and 364(c) of the Bankruptcy Code and
Bankruptcy Rules 2002 and 4001(c), and no further
notice of or hearing on the relief sought in the Motion
is required. The Court has jurisdiction over this case
and the parties and property affected hereby pursuant
to 28 U.S.C. 157(b)(2)(D) and 1334.
D. The financing arrangement contemplated by the Motion
and approved herein pursuant to which post-petition
loans and letter of credit financing will be made
available to the Debtor is the product of an arms
length negotiation and is entered into by the Lenders
in good faith, as the term "good faith" is used in
Section 364(e) of the Bankruptcy Code, and such
arrangements and the transactions contemplated by the
Credit Agreement do not provide Lenders with sufficient
control over the Debtor to subject the Lenders to any
liability (including, without limitation, environmental
liability as an "owner","operator" or "responsible
person" as those terms are used in the Comprehensive
Environmental Response, Compensation and Liability Act
of 1980, as amended by the Superfund Amendments and
Reauthorizations Act of 1986) in connection with the
management of any of the Debtor's businesses or
properties. Neither the Credit Agreement, the financing
arrangement contemplated therein and approved herein,
including the granting of the liens and security
interests to or for the benefit of the Lenders in the
Collateral nor the exercise of any rights or remedies
by or on behalf of the Lenders in connection therewith,
constitute or will constitute any breach, violation or
infringement of (i) any trademark, copyright or other
intellectual property right of the Debtor or any third
party or (ii) any contract to which the Debtor or any of
their properties is subject.
E. The Debtor will receive and benefit from
the credit provided under the Credit
Agreement authorized herein. The credit provided under
the Credit Agreement is necessary to fund the business
of the Debtor and, will contribute to payment of the
actual and necessary costs and expenses of preserving
its estate.
F. The assets of the Debtor are unencumbered
and do not constitute the collateral of any
party, except (i) for the Lenders as to assets existing
before and after the Petition Date, and (ii) as
expressly permitted under the Credit Agreement.
G. The Lenders have agreed to provide financing on the
terms and conditions in the Credit Agreement and in
reliance thereon and provided that the Court enters
an order satisfactory to the Lenders approving the
Credit Agreement and granting such liens, claims and
priorities to or for the benefit of Lenders as are set
forth herein and in the
Credit Agreement with respect to all Obligations.
H. Good, adequate and sufficient cause has been
shown to justify the granting of the relief requested
in the Motion.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
1. The motion is granted and the Credit Agreement is
hereby approved subject to the terms and conditions hereinafter
set forth.
2. The Debtor is authorized to obtain loans and
request the issuance of letters of credit pursuant to
the terms of the Credit Agreement and this Order, in a
maximum amount outstanding not to exceed $24,000,000.
3. The payment of the Prior ndebtedness pursuant to
the Credit Agreement and this Order shall be without
prejudice to the right of any official committee
to seek to avoid, pursuant to Section 547 of the
Bankruptcy Code, any lien granted to Lenders in respect
of the Prior Indebtedness.
4. The Debtor is hereby authorized and directed
(x) to execute and deliver the Credit Agreement and all
other documents necessary or desirable to implement the
Credit Agreement (through one or more officers
designated by it), (y) to effect all transactions and
take any actions provided for in the Credit Agreement
(including, subject to the last sentence of this
paragraph, the payment of the Prior Indebtedness) or
deemed necessary by Lenders to effectuate the terms and
conditions of the Credit Agreement and
this Order, including, without limitation, the payment
of any and all fees, costs, charges, commissions and
expenses, including counsel fees, payable under the
Credit Agreement or this Order, and (z) comply with a11
provisions of the Credit Agreement, including (without
limitation) the payment and satisfaction in full of all
Obligations when due in accordance with the terms of
the Credit Agreement.
5. All Obligations owing to Lenders hereunder or under
the Credit Agreement (including, but not limited to,
the obligation to pay principal, interest, professional
fees, costs, charges, commissions and expenses,) shall
be paid as provided in the Credit Agreement when due,
without defense, offset, reduction or counterclaim, and
shall constitute allowed claims to the full extent
thereof against the Debtor arising under Section
364(c)(1) of the Bankruptcy Code, with priority for
such claims over any and all administrative expenses
(other than the United States Trustee's fees) of the
kind specified or ordered pursuant to any provision of
the Bankruptcy Code, including, but not limited to,
Sections 105, 326, 328, 503(b), 506(c), 507(a), 507(b)
and 726 of the Bankruptcy Code, provided that, upon the
occurrence and during the continuation of an Event of
Default or the exercise by the Lenders of their
remedies after an Event of Default under the Credit
Agreement, such claims and the liens arising in respect
thereof shall be subject to the Carve-Out;(2) provided
further that, so long as no Event of Default shall have
occurred and be continuing, the Debtor shall be
permitted to pay administration expenses of the kind
specified in Section 503(b) of the Bankruptcy Code
incurred in the ordinary course of the Debtor's
business (or otherwise as expressly permitted in the
Credit Agreement) and compensation and reimbursement
allowed and payable under Sections 330 and 331 of the
Bankruptcy Code in amounts allowed by this Court. Such
claims of the Lenders shall at all times be senior, in
this and any subsequent proceeding under the Bankruptcy
Code, to the rights of the Debtor, any successor
trustee and (except to the extent of the Carve-out) any
claims of any creditor or other entity. No cost or
expense of administration or any claims in this case,
including those resulting from or incurred after any
conversion of this proceeding pursuant to Section 1112
of the Bankruptcy Code shall (except to the extent of
the Carve-Out) rank prior to, or on parity with, the
claims of the Lenders arising hereunder or under the
Credit Agreement. Such claims of Lenders are and shall
be secured by duly perfected, non-voidable (subject
only to paragraph 3 of this Order) first priority
(subject to the next sentence) senior liens on and
security interests in the Collateral (whether now owned
or hereafter acquired, including all proceeds and
products thereof), ranking prior to the liens, security
interests, claims or encumbrances at any time existing
or arising which may be asserted by any person or
entity pursuant to statute, lease or other contract or
otherwise, except that the liens of the Lenders
pursuant to the Credit Agreement and this Order shall
rank junior in priority only to (a) the Replacement
Lien granted to the Lenders pursuant to the Interim
Stipulation And Consent Order Regarding Debtor-In-
Possession's Short Term Use of Cash Collateral dated
and entered July 5,1995, and (b) duly perfected, valid,
enforceable and non-voidable liens and security
interests, if any, existing prior to the conunencement
of these cases as set forth on Schedule 6.3 of the
Credit Agreement ("Preexisting Liens"). Any security
interests or liens in favor of third parties avoided
and preserved in these cases (other than the liens of
the Lenders under the Prior Agreement) shall be subject
and subordinate to the liens and security interests in
favor of the Lenders pursuant to the Credit Agreement
and this Order. Other than (i) liens and security
interests in favor of the Lenders, (ii) Preexisting
Liens, and (iii) permitted encumbrances allowed in
accordance with the terms of the Credit Agreement
(collectively, the "Other Liens"), no liens or security
interests shall attach to the Collateral or any other
property of the Debtor's estate in this or any
subsequent proceeding under the Bankruptcy Code without
the Lenders' express written consent. The Lenders at
their option may release from their security interest
at any time any assets determined by the Lenders to
have a risk of environmental liabilities which the
Lenders, in their discretion, deem unacceptable. The
Lenders shall have no duty, expressed or implied, to
any holder of the Other Liens, to take, or refrain from
taking, any action with respect to the Obligations,
including, without limitation, any action with respect
to the Collateral.
6. No order shall be entered in these cases authorizing
the incurrence of indebtedness or other financial
accommodations not permitted by the Credit Agreement
unless (a) the Lenders consent in writing thereto or
(b) the proceeds thereof are used first to satisfy in
full all Obligations owing to the Lenders under the
Credit Agreement in accordance with the terms of the
Credit Agreement.
7. Other than the Carve-Out, no cost or expense,
including, but not limited to, any cost or expense of
administration of the Debtor's Chapter 11 case or any
future proceeding which may develop out of such case,
including liquidation in chapter 7 or other proceedings
under the Bankruptcy Code, shall be charged against the
Collateral pursuant to Section 506(c) of the Bankruptcy
Code or otherwise, without the prior written consent of
Lenders, and no such consent shall be implied from any
action, inaction or acquiescence by the Lenders.
8. All liens and security interests granted herein or
under the Credit Agreement on or in property of the
Debtor's estate to or for the benefit of the Lenders
shall be, and they hereby are, deemed duly perfected
and recorded under all applicable federal or state laws
as of the date hereof, and no notice, filing, mortgage
recordation, possession, further order or other act,
shall be required to effect such perfection; provided,
however, that the Lenders may, in their sole option
(and notwithstanding the provisions of Section 362 of
the Bankruptcy Code), file or cause the Debtor to
execute, file or record, at the Debtor's expense, such
Uniform Commercial Code financing statements, notices
of liens and security interests, mortgages and other
similar documents as the Lenders may require, and the
Debtor is directed to cooperate and comply therewith.
If the Lenders, in their sole discretion, shall elect
for any reason to file or record any such notices,
financing statements, mortgages, or other documents
with respect to such security interests and liens, or
take possession, all such financing statements or
similar documents or taking possession shall be deemed
to have been filed or recorded or taken in the Debtor's
Chapter 11 case as of the commencement of the case. The
Lenders may, in their discretion, file a certified copy
of this Order in any filing or recording office in any
county or other jurisdiction in which any Debtor has
real or personal property and such filing shall
constitute further evidence of perfection of Lenders'
interest in the Collateral. Neither the granting of the
liens and security interests to the Lenders in the
Collateral (including, without limitation, the
inventory of the Debtor) nor the exercise of any rights
or remedies by Lenders in connection therewith will
result in any breach, violation or infringement of (i)
any trademark, copyright or other intellectual property
right of the Debtor or any third party or (ii) any
contract to which the Debtor or any of its properties
is subject.
9. The Lenders, having been found to be lenders in good
faith, shall be entitled to the full protection of
Section 364(e) of the Bankruptcy Gode, and the liens,
security interests and priorities created or authorized
in this Order and the Credit Agreement are created and
authorized pursuant to Sections 364(c)(1), (2), and (3)
of the Bankruptcy Code and are entitled to the benefits
and protections of Section 364(e) of the Bankruptcy
Code.
10. The Lenders are entitled to all of the rights,
benefits, privileges and remedies set forth or provided
herein or in the Credit Agreement (and to the extent
set forth or provided for in the Credit Agreement are
fully incorporated herein), including, but not limited
to all of the rights, benefits, privileges and remedies
available to the Lenders upon the occurrence and during
the continuance of a Default or an Event of Default (as
defined in the Credit Agreement, and which includes any
reversal, stay or modification of this Order without
the Lenders' consent, the appointment of an interim or
permanent trustee in this case and the conversion or
dismissal of this case), and the automatic stay of
Section 362 of the Bankruptcy Code (to the extent
applicable) is vacated to permit the exercise,
enjoyment and enforcement of any of such rights,
benefits, privileges and remedies, including, but not
limited to, (a) the termination by the Lenders of all
of their obligations under the Credit Agreement and (b)
the enforcement of the priority claims and liens
granted to or for the benefit of Lenders hereunder or
under the Credit Agreement, provided that, the Lenders
shall give the Debtor, and any official committees,
three business days' prior written notice (the
"Enforcement Notice") of any enforcement against the
Collateral, and file a copy of such Enforcement Notice
with the clerk of the Court. Without limiting the
foregoing, upon the occurrence and during the
continuance of an Event of Default and the giving of
the Enforcement Notice, the Lenders may (at their
option), but shall have no duty to, (i) enter upon any
leased premises of the Debtor for the purposes of
exercising their remedies with respect to and taking
possession of Collateral located thereon, (ii) cure
defaults (if any), and/or (iii) perform any obligations
under any leases covering such premises required to be
cured or performed pursuant to Sections 365(d)(3) or
503(a) of the Bankruptcy Code (such actions not to be
deemed an assumption of any such lease), and the
Lenders shall be entitled to (a) all of the Debtor's
rights and privileges as lessee under such leases and
(b) exercise any of such rights and remedies
notwithstanding any default by Debtor under any such
lease, and all without interference from the lessors
thereunder.
11. The provisions of this Order and any actions taken
pursuant hereto shall survive entry of any other order
which may be entered in this case, including any order
(i) confirming any plan of reorganization, (ii)
converting these proceedings from Chapter 11 to Chapter
7, or (iii) dismissing this case, and the terms and
provisions of this Order as well as the priorities in
payment, liens and security interests granted pursuant
to this Order and the Credit Agreement shall continue
in full force and effect notwithstanding the entry of
such other order, until all of the Obligations owing to
Lenders hereunder and under the Credit Agreement are
indefeasibly satisfied and discharged in accordance
with their terms.
12. If any or all of the provisions of this Order are
hereafter reversed, modified, vacated or stayed by
subsequent order of this Court or any other court, such
reversal, stay, modification or vacatur shall not
affect the validity and enforceability of any
Obligation, debt or claim incurred, or any priority,
security interest or lien that is or was incurred or
granted pursuant to the Credit Agreement or this Order,
and notwithstanding any stay, reversal, modification or
vacatur of this Order, any Obligations owing to Lenders
arising prior to the effective date of such stay,
reversal, modification or vacatur, shall be governed in
all respects by the original provisions of this Order
and the Credit Agreement, as the case may be. Lenders
shall be entitled to all of their respective rights,
privileges and benefits hereunder and under the Credit
Agreement including, without limitation, the liens,
security interests, priorities, rights and remedies
granted herein and therein to or for their benefit with
respect to all Obligations owing to Lenders, all
Collateral securing same and the priority granted
therefor under Bankruptcy Code Section 364(c)(1).
13. This Court retains and reserves jurisdiction to
enforce all provisions of this Order.
Dated: Wilmington, DE July ,1995
Xxxxx X. Xxxxxx
Chief Judge United States
Bankruptcy Court
(1) All undefined capitalized terms used herein shall have the
meanings ascribed to them in the Credit Agreement.
(2) The Carve-Out as defined in section 2.23 of the Credit
Agreement consists of unpaid professional fees and expenses
allowed in this Chapter 11 Case in an aggregate amount
(determined without regard to fees and expenses awarded and
paid on an interim basis) not to exceed $ 1,000,000 inclusive
of aggregate fee holdbacks. EXHIBIT I
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE:
XXXXX CORONA CORP.,
In Proceedings for a
Reorganization Under Chapter 11 Case No. 95-788 HSB
Debtors.
INTERIM ORDER (i) AUTHORIZING POST PETITION FINANCING
AND (ii) GRANTING SENIOR LIENS AND
PRIORITY ADMINISTRATIVE EXPENSE CLAIM STATUS
Upon the motion of the above-captioned Debtor and Debtor-in-
Possession (the "Debtor") dated July ,1995 (the "Motion") for
authority, pursuant to Section 364(c) of the United States
Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the "Bankruptcy
Code") and Bankruptcy Rule 4001(c), inter alia, on an interim
basis until the final hearing, to (i) borrow funds and receive
letter of credit financing from Chemical Bank and Bank of America
Illinois (jointly and severally, the "Lenders") pursuant to that
certain debtor-in-possession credit agreement, security agreement
and the related agreements, instruments and documents
substantially in the form annexed to the Motion (collectively,
the "Credit Agreement"); (ii) grant security interests for the
loans, advances and obligations owed and to be incurred by the
Debtor pursuant to the Credit Agreement; and (iii) grant super
priority administrative claim status in respect of such loans,
advances and obligations; and it further appearing that:
a. The ability of the Debtor to continue in business so that it
can attempt to reorganize under the Bankruptcy Code depends upon
obtaining the relief requested in the Motion.
b. Notice of the relief requested in the Motion, including a
sufficient description of the terms of the Credit Agreement, has
been given, inter alia, to the United States Trustee and all
parties entitled to notice pursuant to Bankruptcy Rule 4001(c).
NOW, THEREFORE, upon the record of the hearing held
before this Court with respect to the Motion on July
10,1995, it is hereby found that:l
A. On July 5, 1995, (the "Petition Date"), the Debtor
filed a voluntary chapter 11 petition under the
Bankruptcy Code. No trustee or examiner has been
appointed. The Debtor is authorized to operate its
business as debtor-in-possession.
B. The Debtor is unable to obtain the financing that is
contemplated by the Credit Agreement on an unsecured
basis under Section 503(b)(1) of the Bankruptcy Code.
C. Sufficient and adequate notice of the relief
requested in the Motion has been given pursuant to
Sections 102(1) and 364(c) of the Bankruptcy Code and
Bankruptcy Rules 2002 and 4001(c), and no further
notice of or hearing on the relief sought in the
Motion is required. The Court has jurisdiction over
this case and the parties and property affected hereby
pursuant to 28 U.S.C. SS157(b)(2)(D) and 1334.
D. The financing arrangement contemplated by the
Motion and approved herein pursuant to which post-
petition loans and letter of credit financing will be
made available to the Debtor is the product of an arms
length negotiation and is entered into by the Lenders
in good faith, as the term "good faith" is used in
Section 364(e) of the Bankruptcy Code, and such
arrangements and the transactions contemplated by the
Credit Agreement do not provide the Lenders with
sufficient control over the Debtor to subject the
Lenders to any liability (including, without
limitation, environmental liability as an "owner",
"operator" or "responsible person" as those terms are
used in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorizations Act of
1986) in connection with the management of any of the
Debtor's businesses or properties. Neither the Credit
Agreement, the financing arrangement contemplated
therein and approved herein, including the granting of
the liens and security interests to or for the benefit
of the Lenders in the Collateral, nor the exercise of
any rights or remedies by or on behalf of the Lenders
in connection therewith, constitute or will constitute
any breach, violation or infringement of (i) any
trademark, copyright or other intellectual property
right of the Debtor or any third party or
(ii) any contract to which the Debtor or any of their
properties is subject.
E. The Debtor will receive and benefit from the credit
provided under the Credit Agreement authorized herein.
The credit provided under the Credit Agreement is
necessary to fund the business of the Debtor and will
contribute to payment of the actual and necessary costs
and expenses of preserving its estate.
F. Entry of this Order on an interim basis is necessary
to avoid immediate and irreparable harm to the estate
pending a final hearing pursuant to Bankruptcy Rule
4001 (c) (the "Final Hearing").
G. The assets of the Debtor are unencumbered and do not
constitute the collateral of any party, except (i) for
the Lenders as to assets existing before and after the
Petition Date, and (ii) as expressly permitted under
the Credit Agreement.
H. The Lenders have agreed to provide financing on the
terms and conditions in the Credit Agreement and in
reliance thereon and provided that the Court enters
an order satisfactory to the Lenders approving the
Credit Agreement and granting such liens, claims and
priorities to or for the benefit of Lenders as are set
forth herein and in the Credit Agreement with respect
to all Obligations.
I. Good, adequate and sufficient cause has been shown
to justify the granting of the relief requested in the
Motion.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
1. The Motion is granted and the Credit Agreement is
hereby approved on an interim basis subject to the
terms and conditions hereinafter set forth.
2. The Debtor is authorized to obtain loans and request
the issuance of letters of credit pursuant to the terms
of the Credit Agreement and this Order, provided that
(x) the maximum aggregate outstanding amount of Loans
and Letters of Credit available under the Credit
Agreement shall not exceed $24,000,000 and (y) the
payment by the Debtor of the Prior Indebtedness
pursuant to the Credit Agreement shall be without
prejudice to the right of appropriate parties in
interest on behalf of this estate to seek to
avoid, pursuant to Section 547 of the Bankruptcy Code,
any lien granted to the Lenders in respect of such
Prior Indebtedness. The amount to be borrowed by the
Debtor pursuant to this Order, pending the final
hearing, shall be limited to $ 1,500,000 in addition to
the refunding of the Obligations owing to the Lenders
at the Petition Date as set forth in paragraph 31 of
the Motion.
3. The Debtor is hereby authorized and
directed (x) to execute and deliver the
Credit Agreement and all other documents necessary or
desirable to implement the Credit Agreement
(through one or more officers designated by it), (y) to
effect all transactions and take any actions provided
for in the Credit Agreement (including the payment of
the Prior Indebtedness) or deemed necessary by Lenders
to effectuate the terms and conditions of the Credit
Agreement and this Order, including, without
limitation, the payment of any and all fees,
costs, charges, commissions and expenses, including
counsel fees, payable under the Credit Agreement or
this Order, and (z) comply with all provisions of the
Credit Agreement, including, without limitation, the
payment and satisfaction in full of all Obligations
when due in accordance with the terms of the Credit
Agreement.
4. All Obligations owing to the Lenders
hereunder or under the Credit Agreement
(including, but not limited to, the obligation to pay
principal, interest, professional fees, costs, charges,
commissions and expenses), shall be paid as
provided in the Credit Agreement when due, without
defense, offset, reduction or counterclaim, and shall
constitute allowed claims to the full extent thereof
against the Debtor arising under Section 364(c)(1) of
the Bankruptcy Code, with priority for such claims over
any and all administrative expenses (other than the
United States Trustee's fees) of the kind specified or
ordered pursuant to any provision of the Bankruptcy
Code, including, but not limited to, Sections 105, 326,
328, 503(b), 506(c), 507(a), 507(b) and 726 of the
Bankruptcy Code, provided that, upon the
occurrence and during the continuation of an Event of
Default or the exercise by the Lenders of their
remedies after an Event of Default under the Credit
Agreement, such claims and the liens arising in respect
thereof shall be subject to the Carve-Out;(2) provided
further that, so long as no Event of Default shall have
occurred and be continuing, the Debtor shall be
permitted to pay administration expenses of the kind
specified in Section 503(b) of the Bankruptcy Code
incurred in the ordinary course of the Debtor's
business (or otherwise as expressly permitted in the
Credit Agreement), and compensation and reimbursement
payable under Sections 330 and 331 of the Bankruptcy
Code in amounts allowed by this Court. Such claims of
the Lenders shall at all times be senior, in this and
any subsequent proceeding under the Bankruptcy Code, to
the rights of the Debtor, any successor trustee and
(except to the extent of the Carve-Out) any claims of
any creditor or other entity. No cost or expense of
administration or any claims in this case, including
those resulting from or incurred after any conversion
of this proceeding pursuant to Section 1112 of the
Bankruptcy Code shall (except to the extent of the
Carve-Out) rank prior to, or on parity with, the claims
of the Lenders arising hereunder or under the Credit
Agreement. Such claims of Lenders are and shall be
secured by duly perfected, nonvoidable (subject only to
the provisions of paragraph 2 above) first priority
(subject to the next sentence) senior liens on and
security interests in the Collateral (whether now owned
or hereafter acquired, including all proceeds and
products thereof), ranking prior to all liens, security
interests, claims and encumbrances at any time existing
or arising which may be asserted by any person or
entity pursuant to statute, lease or other contract or
otherwise, except that the liens of the Lenders
pursuant to the Credit Agreement and this Order shall
rank junior in priority only to (a) the Replacement
Lien granted to the Lenders pursuant to the Interim
Stipulation and Consent Order Regarding Debtor-In-
Possession's Short Term Use Of Cash Collateral dated
and entered July 5, 1995, and (b) duly perfected,
valid, enforceable and non-voidable liens and security
interests, if any, existing prior to the commencement
of this case as set forth on Schedule 6.3 of the Credit
Agreement ("Preexisting Liens"). Any security interests
or liens in favor of third parties avoided and
preserved in this case (other than the liens of the
Lenders under the Prior Agreement) shall be subject and
subordinate to the liens and security interests in
favor of the Lenders pursuant to the Credit Agreement
and this Order. Other than (i) liens and security
interests in favor of the Lenders, (ii) Preexisting
Liens, and (iii) permitted encumbrances allowed in
accordance with the terms of the Credit Agreement
(collectively, the "Other Liens"), no liens or security
interests shall attach to the Collateral or any other
property of the Debtor's estate in this or any
subsequent proceeding under the Bankruptcy Code without
the Lenders' express written consent. The Lenders at
their option may release from their security interest
at any time any assets including, inter alia, those
assets determined by the Lenders to have a risk of
environmental liabilities which the Lenders, in their
discretion, deem unacceptable. The Lenders shall have
no duty, expressed or implied, to any holder of the
Other Liens, to take, or refrain from taking, any
action with respect to the Obligations,
including, without limitation, any action with respect
to the Collateral.
5. No order shall be entered in these cases
authorizing the incurrence of indebtedness or
other financial accommodations not permitted by the
Credit Agreement unless (a) the Lenders consent in
writing thereto or (b) the proceeds thereof are used
first to satisfy in full all Obligations owing to the
Lenders under the Credit Agreement in accordance with
the terms of the Credit Agreement.
6. Other than the Carve-Out, no cost or
expense, including, but not limited to, any
cost or expense of administration of the Debtor's
Chapter 11 case or any future proceeding which may
develop out of such case, including liquidation in
chapter 7 or other proceedings under the Bankruptcy
Code, shall be charged against the Collateral pursuant
to Section 506(c) of the Bankruptcy Code or otherwise,
without the prior written consent of Lenders, and no
such consent shall be implied from any action, inaction
or acquiescence by the Lenders.
7. All liens and security interests granted
herein or under the Credit Agreement on or
in property of the Debtor's estate to or for the
benefit of Lenders shall be, and they hereby are,
deemed duly perfected and recorded under all
applicable federal or state laws as of the date
hereof, and no notice, filing, mortgage recordation,
possession, further order or other act, shall be
required to effect such perfection; provided, however,
that the Lenders may, in their sole option (and
notwithstanding the provisions of Section 362 of the
Bankruptcy Code), file or cause the Debtor to execute,
file or record, at the Debtor's expense, such Uniform
Commercial Code financing statements, notices of liens
and security interests, mortgages and other similar
documents as the Lenders may require, and the Debtor
is directed to cooperate and comply therewith. If the
Lenders, in their sole discretion, shall elect for any
reason to file or record any such notices, financing
statements, mortgages, or other documents with respect
to such security interests and liens, or take
possession, all such financing statements or similar
documents or taking possession shall be deemed to have
been led or recorded or taken in the Debtor's Chapter
11 case as of the commencement of the case. The
Lenders may, in their discretion, file a certified
copy of this Order in any filing or recording office
in any county or other jurisdiction in which any
Debtor has real or personal property and such filing
shall constitute further evidence of perfection of
Lenders' interest in the Collateral. Neither the
granting of the liens and security interests to
Lenders in the Collateral (including, without
limitation, the inventory of the Debtor) nor the
exercise of any rights or remedies by Lenders in
connection therewith will result in any breach,
violation or infringement of (i) any trademark,
copyright or other intellectual property right of the
Debtor or any third party or (ii) any contract to
which the Debtor or any of its properties is subject.
8. The Lenders, having been found to be
lenders in good faith, shall be entitled to
the full protection of Section 364(e) of the
Bankruptcy Code, and the liens, security interests and
priorities created or authorized in this Order and the
Credit Agreement are so created and authorized
pursuant to Sections 364(c)(1), (2), and (3) of the
Bankruptcy Code and are entitled to the benefits and
protections of Section 364(e) of the Bankruptcy Code.
9. The Lenders are entitled to all of the
rights, benefits, privileges and remedies
set forth or provided herein or in the Credit
Agreement (and to the extent set forth or provided for
in the Credit Agreement are fully incorporated
herein), including, but not limited to all of the
rights, benefits, privileges and remedies available to
the Lenders upon the occurrence and during the
continuance of a Default or an Event of Default (as
defined in the Credit Agreement, and which includes
any reversal, stay or modification of this Order
without Lenders' consent, the appointment of an
interim or permanent trustee in this case and the
conversion or dismissal of this case), and the
automatic stay of Section 362 of the Bankruptcy Code
(to the extent applicable) is vacated to permit the
exercise, enjoyment and enforcement of any of such
rights, benefits, privileges and remedies, including,
but not limited to, (a) the termination by the Lenders
of all of their obligations under the Credit Agreement
and (b) the enforcement of the priority claims and
liens granted to or for the benefit of Lenders
hereunder or under the Credit Agreement, provided
that, the Lenders shall give the Debtor, and any
official committees, three business days' prior
written notice (the "Enforcement Notice") of any
enforcement against the Collateral, and file a copy of
such Enforcement Notice with the clerk of the Court.
Without limiting the foregoing, upon the occurrence
and during the continuance of an Event of Default and
the giving of the Enforcement Notice, the Lenders may
(at their option), but shall have no duty to, (i)
enter upon any leased premises of the Debtor for the
purposes of exercising their remedies with respect to
and taking possession of Collateral located thereon,
(ii) cure defaults (if any), and/or (iii) perform any
obligations under any leases covering such premises
required to be cured or performed pursuant to Sections
365(d)(3) or 503(a) of the Bankruptcy Code (such
actions not to be deemed an assumption of any such
lease), and the Lenders shall be entitled to (a) all
of the Debtor's rights and privileges as lessee under
such leases and (b) exercise any of such rights and
remedies notwithstanding any default by Debtor under
any such lease, and all without interference from the
lessors thereunder.
10. The provisions of this Order and any actions taken
pursuant hereto shall survive entry of any other order
which may be entered in this case, including any order
(i) confirming any plan of reorganization, (ii)
converting these proceedings from Chapter 11 to Chapter
7, or (iii) dismissing this case, and the terms and
provisions of this Order as well as the priorities in
payment, liens and security interests granted pursuant
to this Order and the Credit Agreement shall continue
in full force and effect notwithstanding the entry of
such other order, until all of the Obligations owing to
Lenders hereunder and under the Credit Agreement are
indefeasibly satisfied and discharged in accordance
with their terms.
11. If any or all of the provisions of this Order are
hereafter reversed, modified, vacated or stayed by
subsequent order of this Court (including in connection
with the Final Hearing) or any other court, such
reversal, stay, modification or vacatur shall not
affect the validity and enforceability of any
Obligation, debt or claim incurred, or any priority,
security interest or lien that is or was incurred or
granted pursuant to the Credit Agreement or this Order,
and notwithstanding any stay, reversal, modification or
vacatur of this Order, any Obligations owing to Lenders
arising prior to the effective date of such stay,
reversal, modification or vacatur, shall be governed in
all respects by the original provisions of this Order
and the Credit Agreement, as the case may be. Lenders
shall be entitled to all of their respective rights,
privileges and benefits hereunder and under the Credit
Agreement including, without limitation, the liens,
security interests, priorities, rights and remedies
granted herein and therein to or for their benefit with
respect to all Obligations owing to Lenders, all
Collateral securing same and the priority granted
therefor under Bankruptcy Code Section 364(c)(1).
12. This Court retains and reserves jurisdiction to
enforce all provisions of this Order.
13. Pursuant to Bankruptcy Rule 4001(c), the Final
Hearing on the Motion shall be held on July ,1995 at
. Objections, if any, to the Motion shall be
filed with the Court and served on Debtor's counsel,
Lenders' counsel and all parties who have demanded
service thereof, such that Objections are received no
later than , 1995. If no objections have been
received, a final order may be entered without further
hearing or notice.
Dated: Wilmington, DE July 10,1995
Xxxxx X. Xxxxxx
Chief United States Bankruptcy
Judge
(1) All undefined capitalized terms used herein shall have the
meanings ascribed to them in the Credit Agreement.
(2) The Carve-Out as defined in section 2.23 of the Credit
Agreement consists of unpaid professional fees and expenses
allowed in this Chapter 11 Case in an aggregate amount
(determined without regard to fees and expenses awarded and paid
on an interim basis) not to exceed $ 1,000,000 inclusive of
aggregate fee holdbacks. EXHIBIT J
FORM OF SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY is entered into as of July 10,
1995 by the undersigned (each a "Guarantor" and collectively,
"Guarantors") in favor of and for the benefit of CHEMICAL BANK,
as agent for and representative of (in such capacity herein
called "Agent") the financial institutions ("Lenders") party to
the DIP Credit Agreement (as hereinafter defined).
RECITALS
A. On July 5, 1995, Xxxxx Corona Corporation, a
Delaware corporation (``Company''), filed a voluntary petition
for relief under the Bankruptcy Code (as hereinafter defined),
with the United States Court for the District of Delaware (the
``Bankruptcy Filing''). Company continues to operate its
business and manage its properties as a debtor-in-possession
pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
B. Company has entered into that certain Debtor-
In-Possession Credit Agreement dated as of July 10, 1995 with Agent
and Lenders (said Debtor-In-Possession Credit Agreement, as it
may hereafter be amended, supplemented or otherwise modified from
time to time, being the "DIP Credit Agreement"; capitalized terms
defined therein and not otherwise defined herein being used
herein as therein defined).
C. A portion of the proceeds of the extensions of
credit under the DIP Credit Agreement may be advanced to
Guarantors and thus the Guarantied Obligations (as hereinafter
defined) are being incurred for and will inure to the benefit of
Guarantors (which benefits are hereby acknowledged).
D. It is a condition precedent to the initial
extension of credit under the DIP Credit Agreement that Company's
obligations thereunder be guarantied by Guarantors.
E. Guarantors are willing irrevocably and
unconditionally to guaranty such obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and in order to induce Lenders and Agent
to enter into the DIP Credit Agreement and to make extensions of
credit thereunder, Guarantors hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. As used in this Guaranty, the
following terms shall have the following meanings unless the
context otherwise requires:
"Bankruptcy Code" mans Title 11 of the United States
Code entitled "Bankruptcy", as now and hereafter in effect,
or any successor statute.
"Guarantied Obligations" has the meaning assigned to
that term in subsection 2.1.
"payment in full", "paid in full" or any similar term
means payment in full, in Cash, of the Guarantied
Obligations including, without limitation, all principal,
interest, costs, fees and expenses (including, without
limitation, legal fees and expenses) of Lenders and Agent
as required under the Loan Documents.
"Subsidiary Guaranty" means this Guaranty dated as of
July 10, 1995, as it may be amended, supplemented or
otherwise modified from time to time.
"Subordinated Indebtedness" means indebtedness of
Company or any of its Subsidiaries subordinated in right of
payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants,
defaults, remedies, subordination provisions and other
material terms in form and substance satisfactory to Agent
and Required Lenders.
1.2 Interpretation.
(a) References to "Sections" and "subsections" shall
be to Sections and subsections, respectively, of this
Guaranty unless otherwise specifically provided.
(b) In the event of any conflict or inconsistency
between the terms, conditions and provisions of this
Guaranty and the terms, conditions and provisions of the DIP
Credit Agreement, the terms, conditions and provisions of
this Guaranty shall prevail.
SECTION 2. THE GUARANTY
2.1 Guaranty of the Guarantied Obligations. Subject to
the provisions of subsection 2.2(a), Guarantors jointly and
severally hereby irrevocably and unconditionally guaranty, as
primary obligors and not merely as sureties, the due and punctual
payment in full of all Guarantied Obligations when the same shall
become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay
under Section 362(a) of the Bankruptcy Code, 11 U.S.C. article 362(a),
or any successor statute). The term "Guarantied Obligations" is
used herein in its most comprehensive sense and includes:
(a) any and all Obligations of Company now or
hereafter made, incurred or created, whether absolute or
contingent, liquidated or unliquidated, whether due or not
due, and however arising under or in connection with the DIP
Credit Agreement and the other Loan Documents, including
those arising under successive borrowing transactions under
the DIP Credit Agreement which shall either continue the
Obligations of Company or from time to time renew them after
they have been satisfied; and
(b) those expenses set forth in subsection 2.8 hereof.
2.2 Limitation on Amount Guarantied; Contribution by
Guarantors. (a) Anything contained in this Guaranty to the
contrary notwithstanding, if any Fraudulent Transfer Law (as
hereinafter defined) is determined by a court of competent
jurisdiction to be applicable to the obligations of any Guarantor
under this Guaranty, such obligations of such Guarantor hereunder
shall be limited to a maximum aggregate amount equal to the
largest amount that would not render its obligations hereunder
subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of Title 11 of the United States Code or any
applicable provisions of the comparable laws of any state or any
foreign jurisdiction (collectively, the "Fraudulent Transfer
Laws"), in each case after giving effect to all other liabilities
of such Guarantor, contingent or otherwise, that are relevant
under the Fraudulent Transfer Laws (specifically excluding,
however, any liabilities of such Guarantor (x) in respect of
intercompany indebtedness to Company or other affiliates of
Company to the extent that such indebtedness would be discharged
in an amount equal to the amount paid by such Guarantor hereunder
and (y) under any guaranty of Subordinated Indebtedness which
guaranty contains a limitation as to maximum amount similar to
that set forth in this subsection 2.2(a), pursuant to which the
liability of such Guarantor hereunder is included in the
liabilities taken into account in determining such maximum
amount) and after giving effect as assets to the value (as
determined under the applicable provisions of the Fraudulent
Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of such Guarantor pursuant to
applicable law or pursuant to the terms of any agreement
(including without limitation any such right of contribution
under subsection 2.2(b) or under a Related Guaranty (as
hereinafter defined) as contemplated by subsection 2.2(b)).
(b) Guarantors under this Guaranty, and each guarantor
under other guaranties, if any, relating to the DIP Credit
Agreement (the "Related Guaranties") which contain a contribution
provision similar to that set forth in this subsection 2.2(b),
together desire to allocate among themselves (collectively, the
"Contributing Guarantors"), in a fair and equitable manner, their
obligations arising under this Guaranty and the Related
Guaranties. Accordingly, in the event any payment or
distribution is made on any date by any Guarantor under this
Guaranty or a guarantor under a Related Guaranty (a "Funding
Guarantor") that exceeds its Fair Share (as defined below) as of
such date, that Funding Guarantor shall be entitled to a contri-
bution from each of the other Contributing Guarantors in the
amount of such other Contributing Guarantor's Fair Share
Shortfall (as defined below) as of such date, with the result
that all such contributions will cause each Contributing
Guarantor's Aggregate Payments (as defined below) to equal its
Fair Share as of such date. "Fair Share" means, with respect to
a Contributing Guarantor as of any date of determination, an
amount equal to (i) the ratio of (x) the Adjusted Maximum Amount
(as defined below) with respect to such Contributing Guarantor
to (y) the aggregate of the Adjusted Maximum Amounts with respect
to all Contributing Guarantors, multiplied by (ii) the aggregate
amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty and the Related Guaranties in
respect of the obligations guarantied. "Fair Share Shortfall"
means, with respect to a Contributing Guarantor as of any date
of determination, the excess, if any, of the Fair Share of such
Contributing Guarantor over the Aggregate Payments of such
Contributing Guarantor. "Adjusted Maximum Amount" means, with
respect to a Contributing Guarantor as of any date of
determination, the maximum aggregate amount of the obligations
of such Contributing Guarantor under this Guaranty and the
Related Guaranties, determined as of such date in accordance with
subsection 2.2(a) or, if applicable, a similar provision
contained in a Related Guaranty; provided that, solely for
purposes of calculating the "Adjusted Maximum Amount" with
respect to any Contributing Guarantor for purposes of this
subsection 2.2(b), any assets or liabilities of such Contributing
Guarantor arising by virtue of any rights to subrogation,
reimbursement or indemnification or any rights to or obligations
of contribution hereunder or under any similar provision
contained in a Related Guaranty shall not be considered as assets
or liabilities of such Contributing Guarantor. "Aggregate
Payments" means, with respect to a Contributing Guarantor as of
any date of determination, an amount equal to (i) the aggregate
amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty
and the Related Guaranties (including, without limitation, in
respect of this subsection 2.2(b) or any similar provision
contained in a Related Guaranty) minus (ii) the aggregate amount
of all payments received on or before such date by such
Contributing Guarantor from the other Contributing Guarantors as
contributions under this subsection 2.2(b) or any similar
provision contained in a Related Guaranty. The amounts payable
as contributions hereunder and under similar provisions in the
Related Guaranties shall be determined as of the date on which
the related payment or distribution is made by the applicable
Funding Guarantor. The allocation among Contributing Guarantors
of their obligations as set forth in this subsection 2.2(b) or
any similar provision contained in a Related Guaranty shall not
be construed in any way to limit the liability of any
Contributing Guarantor hereunder or under a Related Guaranty.
Each Contributing Guarantor under a Related Guaranty is a third
party beneficiary to the contribution agreement set forth in this
subsection 2.2(b).
2.3 Payment by Guarantors; Application of Payments.
Subject to the provisions of subsection 2.2(a), Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and
not in limitation of any other right which Agent or any other
Person may have at law or in equity against any Guarantor by
virtue hereof, that upon the failure of Company to pay any of the
Guarantied Obligations when and as the same shall become due,
whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. article 362(a), or any
successor statute), Guarantors will upon demand pay, or cause to
be paid, in cash, to Agent for the ratable benefit of Lenders,
an amount equal to the sum of the unpaid principal amount of all
Guarantied Obligations then due as aforesaid, accrued and unpaid
interest on such Guarantied Obligations (including, without
limitation, interest which, but for the filing of a petition in
bankruptcy with respect to Company, would have accrued on such
Guarantied Obligations, whether or not a claim is allowed against
Company for such interest in any such bankruptcy proceeding) and
all other Guarantied Obligations then owed to Agent and/or
Lenders as aforesaid. All such payments shall be applied
promptly from time to time by Agent:
First, to the payment of the costs and expenses of any
collection or other realization under this Guaranty,
including reasonable compensation to Agent and its agents
and counsel, and all expenses, liabilities and advances made
or incurred by Agent in connection therewith;
Second, to the payment of all other Guarantied
Obligations in such order as Agent shall elect; and
Third, after payment in full of all Guarantied
Obligations, to the payment to Guarantors, or their
respective successors or assigns, or to whomsoever may be
lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then
remaining from such payments.
2.4 Liability of Guarantors Absolute. Each Guarantor
agrees that its obligations hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of
a guarantor or surety other than payment in full of the
Guarantied Obligations. In furtherance of the foregoing and
without limiting the generality thereof, each Guarantor agrees
as follows:
(a) This Guaranty is a guaranty of payment when due
and not of collectibility.
(b) Agent may enforce this Guaranty upon the
occurrence of an Event of Default under the DIP Credit
Agreement notwithstanding the existence of any dispute
between Lenders and Company with respect to the existence
of such Event of Default.
(c) The obligations of each Guarantor hereunder are
independent of the obligations of Company under the Loan
Documents and the obligations of any other guarantor
(including any other Guarantor) of the obligations of
Company under the Loan Documents, and a separate action or
actions may be brought and prosecuted against such Guarantor
whether or not any action is brought against Company or any
of such other guarantors and whether or not Company is
joined in any such action or actions.
(d) Payment by any Guarantor of a portion, but not
all, of the Guarantied Obligations shall in no way limit,
affect, modify or abridge any Guarantor's liability for any
portion of the Guarantied Obligations which has not been
paid. Without limiting the generality of the foregoing, if
Agent is awarded a judgment in any suit brought to enforce
any Guarantor's covenant to pay a portion of the Guarantied
Obligations, such judgment shall not be deemed to release
such Guarantor from its covenant to pay the portion of the
Guarantied Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied
by such Guarantor, limit, affect, modify or abridge any
other Guarantor's liability hereunder in respect of the
Guarantied Obligations.
(e) Agent or any Lender, upon such terms as it deems
appropriate, without notice or demand and without affecting
the validity or enforceability of this Guaranty or giving
rise to any reduction, limitation, impairment, discharge or
termination of any Guarantor's liability hereunder, from
time to time may (i) renew, extend, accelerate, increase the
rate of interest on, or otherwise change the time, place,
manner or terms of payment of the Guarantied Obligations,
(ii) settle, compromise, release or discharge, or accept or
refuse any offer of performance with respect to, or
substitutions for, the Guarantied Obligations or any
agreement relating thereto and/or subordinate the payment
of the same to the payment of any other obligations;
(iii) request and accept other guaranties of the Guarantied
Obligations and take and hold security for the payment of
this Guaranty or the Guarantied Obligations; (iv) release,
surrender, exchange, substitute, compromise, settle,
rescind, waive, alter, subordinate or modify, with or
without consideration, any security for payment of the
Guarantied Obligations, any other guaranties of the
Guarantied Obligations, or any other obligation of any
Person (including any other Guarantor) with respect to the
Guarantied Obligations; (v) enforce and apply any security
now or hereafter held by or for the benefit of Agent or any
Lender in respect of this Guaranty or the Guarantied
Obligations and direct the order or manner of sale thereof,
or exercise any other right or remedy that Agent or Lenders,
or any of them, may have against any such security, as Agent
in its discretion may determine consistent with the DIP
Credit Agreement and any applicable security agreement,
including foreclosure on any such security pursuant to one
or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and even
though such action operates to impair or extinguish any
right of reimbursement or subrogation or other right or
remedy of any Guarantor against Company or any security for
the Guarantied Obligations; and (vi) exercise any other
rights available to it under the Loan Documents.
(f) This Guaranty and the obligations of Guarantors
hereunder shall be valid and enforceable and shall not be
subject to any reduction, limitation, impairment, discharge
or termination for any reason (other than payment in full
of the Guarantied Obligations), including without limitation
the occurrence of any of the following, whether or not any
Guarantor shall have had notice or knowledge of any of them:
(i) any failure or omission to assert or enforce or
agreement or election not to assert or enforce, or the stay
or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or
demand or any right, power or remedy (whether arising under
the Loan Documents, at law, in equity or otherwise) with
respect to the Guarantied Obligations or any agreement
relating thereto, or with respect to any other guaranty of
or security for the payment of the Guarantied Obligations;
(ii) any rescission, waiver, amendment or modification of,
or any consent to departure from, any of the terms or
provisions (including without limitation provisions relating
to events of default) of the DIP Credit Agreement, any of
the other Loan Documents or any agreement or instrument
executed pursuant thereto, or of any other guaranty or
security for the Guarantied Obligations, in each case
whether or not in accordance with the terms of the DIP
Credit Agreement or such Loan Document or any agreement
relating to such other guaranty or security; (iii) the
Guarantied Obligations, or any agreement relating thereto,
at any time being found to be illegal, invalid or
unenforceable in any respect; (iv) the application of
payments received from any source (other than payments
received pursuant to the other Loan Documents or from the
proceeds of any security for the Guarantied Obligations,
except to the extent such security also serves as collateral
for indebtedness other than the Guarantied Obligations) to
the payment of indebtedness other than the Guarantied
Obligations, even though Agent or Lenders, or any of them,
might have elected to apply such payment to any part or all
of the Guarantied Obligations; (v) any Lender's or Agent's
consent to the change, reorganization or termination of the
corporate structure or existence of Company or any of its
Subsidiaries and to any corresponding restructuring of the
Guarantied Obligations; (vi) any failure to perfect or
continue perfection of a security interest in any collateral
which secures any of the Guarantied Obligations; (vii) any
defenses, set-offs or counterclaims which Company may allege
or assert against Agent or any Lender in respect of the
Guarantied Obligations, including but not limited to failure
of consideration, breach of warranty, payment, statute of
frauds, statute of limitations, accord and satisfaction and
usury; and (viii) any other act or thing or omission, or
delay to do any other act or thing, which may or might in
any manner or to any extent vary the risk of any Guarantor
as an obligor in respect of the Guarantied Obligations.
2.5 Waivers by Guarantors. Each Guarantor hereby waives,
for the benefit of Lenders and Agent:
(a) any right to require Agent or Lenders, as a
condition of payment or performance by such Guarantor, to
(i) proceed against Company, any other guarantor (including
any other Guarantor) of the Guarantied Obligations or any
other Person, (ii) proceed against or exhaust any security
held from Company, any other guarantor (including any other
Guarantor) of the Guarantied Obligations or any other
Person, (iii) proceed against or have resort to any balance
of any deposit account or credit on the books of Agent or
any Lender in favor of Company or any other Person, or
(iv) pursue any other remedy in the power of Agent or any
Lender whatsoever;
(b) any defense arising by reason of the incapacity,
lack of authority or any disability or other defense of
Company including, without limitation, any defense based on
or arising out of the lack of validity or the
unenforceability of the Guarantied Obligations or any
agreement or instrument relating thereto or by reason of the
cessation of the liability of Company from any cause other
than payment in full of the Guarantied Obligations;
(c) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be
neither larger in amount nor in other respects more
burdensome than that of the principal;
(d) any defense based upon Agent's or any Lender's
errors or omissions in the administration of the Guarantied
Obligations, except behavior which amounts to bad faith;
(e) (i) any principles or provisions of law, statutory
or otherwise, which are or might be in conflict with the
terms of this Guaranty and any legal or equitable discharge
of such Guarantor's obligations hereunder, (ii) the benefit
of any statute of limitations affecting such Guarantor's
liability hereunder or the enforcement hereof, (iii) any
rights to set-offs, recoupments and counterclaims, and
(iv) promptness, diligence and any requirement that Agent
or any Lender protect, secure, perfect or insure any
security interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices
of protest, notices of dishonor and notices of any action
or inaction, including acceptance of this Guaranty, notices
of default under the DIP Credit Agreement or any agreement
or instrument related thereto, notices of any renewal,
extension or modification of the Guarantied Obligations or
any agreement related thereto, notices of any extension of
credit to Company and notices of any of the matters referred
to in subsection 2.4 and any right to consent to any
thereof; and
(g) any defenses or benefits that may be derived from
or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms
of this Guaranty.
2.6 Guarantors' Rights of Subrogation, Contribution, Etc.
Until the Guarantied Obligations shall have been paid in full and
the Commitments shall have terminated and all Letters of Credit
shall have expired or been cancelled, each Guarantor shall
withhold exercise of (a) any claim, right or remedy, direct or
indirect, that such Guarantor now has or may hereafter have
against Company or any of its assets in connection with this
Guaranty or the performance by such Guarantor of its obligations
hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law
or otherwise and including without limitation (i) any right of
subrogation, reimbursement or indemnification that such Guarantor
now has or may hereafter have against Company, (ii) any right to
enforce, or to participate in, any claim, right or remedy that
Agent or any Lender now has or may hereafter have against
Company, and (iii) any benefit of, and any right to participate
in, any collateral or security now or hereafter held by Agent or
any Lender, and (b) any right of contribution such Guarantor may
have against any other guarantor (including any other Guarantor)
of any of the Guarantied Obligations (including without
limitation any such right of contribution under subsection 2.2(b)
or under a Related Guaranty as contemplated by subsection
2.2(b)). Each Guarantor further agrees that, to the extent the
agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth
herein is found by a court of competent jurisdiction to be void
or voidable for any reason, any rights of subrogation,
reimbursement or indemnification such Guarantor may have against
Company or against any collateral or security, and any rights of
contribution such Guarantor may have against any such other
guarantor, shall be junior and subordinate to any rights Agent
or Lenders may have against Company, to all right, title and
interest Agent or Lenders may have in any such collateral or
security, and to any right Agent or Lenders may have against such
other guarantor. Agent, on behalf of Lenders, may use, sell or
dispose of any item of collateral or security as it sees fit
without regard to any subrogation rights any Guarantor may have,
and upon any such disposition or sale any rights of subrogation
such Guarantor may have shall terminate. If any amount shall be
paid to any Guarantor on account of any such subrogation,
reimbursement or indemnification rights at any time when all
Guarantied Obligations shall not have been paid in full, such
amount shall be held in trust for Agent on behalf of Lenders and
shall forthwith be paid over to Agent for the benefit of Lenders
to be credited and applied against the Guarantied Obligations,
whether matured or unmatured, in accordance with the terms
hereof.
2.7 Subordination of Other Obligations. Any indebtedness
of Company now or hereafter held by any Guarantor is hereby
subordinated in right of payment to the Guarantied Obligations,
and any such indebtedness of Company to such Guarantor collected
or received by such Guarantor after an Event of Default has
occurred and is continuing shall be held in trust for Agent on
behalf of Lenders and shall forthwith be paid over to Agent for
the benefit of Lenders to be credited and applied against the
Guarantied Obligations but without affecting, impairing or
limiting in any manner the liability of such Guarantor under any
other provision of this Guaranty.
2.8 Expenses. Guarantors jointly and severally agree to
pay, or cause to be paid, on demand, and to save Agent and
Lenders harmless against liability for, any and all costs and
expenses (including fees and disbursements of counsel and
allocated costs of internal counsel) incurred or expended by
Agent or any Lender in connection with the enforcement of or
preservation of any rights under this Guaranty.
2.9 Continuing Guaranty. This Guaranty is a continuing
guaranty and shall remain in effect until all of the Guarantied
Obligations shall have been paid in full and the Commitments
shall have terminated and all Letters of Credit shall have
expired or been cancelled. Each Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future
transactions giving rise to any Guarantied Obligations.
2.10 Authority of Guarantors or Company. It is not
necessary for Lenders or Agent to inquire into the capacity or
powers of any Guarantor or Company or the officers, directors or
any agents acting or purporting to act on behalf of any of them.
2.11 Financial Condition of Company. Any extensions of
credit may be granted to Company or continued from time to time
without notice to or authorization from any Guarantor regardless
of the financial or other condition of Company at the time of any
such grant or continuation. Lenders and Agent shall have no
obligation to disclose or discuss with any Guarantor their
assessment, or any Guarantor's assessment, of the financial
condition of Company. Each Guarantor has adequate means to
obtain information from Company on a continuing basis concerning
the financial condition of Company and its ability to perform its
obligations under the Loan Documents, and each Guarantor assumes
the responsibility for being and keeping informed of the
financial condition of Company and of all circumstances bearing
upon the risk of nonpayment of the Guarantied Obligations. Each
Guarantor hereby waives and relinquishes any duty on the part of
Agent or any Lender to disclose any matter, fact or thing
relating to the business, operations or conditions of Company now
known or hereafter known by Agent or any Lender.
2.12 Rights Cumulative. The rights, powers and
remedies given to Lenders and Agent by this Guaranty are
cumulative and shall be in addition to and independent of all
rights, powers and remedies given to Lenders and Agent by virtue
of any statute or rule of law or in any of the other Loan
Documents or any agreement between any Guarantor and Lenders
and/or Agent or between Company and Lenders and/or Agent. Any
forbearance or failure to exercise, and any delay by any Lender
or Agent in exercising, any right, power or remedy hereunder
shall not impair any such right, power or remedy or be construed
to be a waiver thereof, nor shall it preclude the further
exercise of any such right, power or remedy.
2.13 Bankruptcy; Post-Petition Interest; Reinstatement
of Guaranty. (a) So long as any Guarantied Obligations remain
outstanding, no Guarantor shall, without the prior written
consent of Agent in accordance with the terms of the DIP Credit
Agreement, commence or join with any other Person in commencing
any bankruptcy, reorganization or insolvency proceedings of or
against Company. The obligations of Guarantors under this
Guaranty shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any proceeding, voluntary
or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of
Company or by any defense which Company may have by reason of the
order, decree or decision of any court or administrative body
resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any
interest on any portion of the Guarantied Obligations which
accrues after the commencement of any proceeding referred to in
clause (a) above (or, if interest on any portion of the
Guarantied Obligations ceases to accrue by operation of law by
reason of the commencement of said proceeding, such interest as
would have accrued on such portion of the Guarantied Obligations
if said proceedings had not been commenced) shall be included in
the Guarantied Obligations because it is the intention of
Guarantors and Agent that the Guarantied Obligations which are
guarantied by Guarantors pursuant to this Guaranty should be
determined without regard to any rule of law or order which may
relieve Company of any portion of such Guarantied Obligations.
Guarantors will permit any trustee in bankruptcy, receiver,
debtor in possession, assignee for the benefit of creditors or
similar person to pay Agent, or allow the claim of Agent in
respect of, any such interest accruing after the date on which
such proceeding is commenced.
(c) In the event that all or any portion of the
Guarantied Obligations are paid by Company, the obligations of
Guarantors hereunder shall continue and remain in full force and
effect or be reinstated, as the case may be, in the event that
all or any part of such payment(s) are rescinded or recovered
directly or indirectly from Agent or any Lender as a preference,
fraudulent transfer or otherwise, and any such payments which are
so rescinded or recovered shall constitute Guarantied Obligations
for all purposes under this Guaranty.
2.14 Notice of Events. As soon as any Guarantor
obtains knowledge thereof, such Guarantor shall give Agent
written notice of any condition or event which has resulted in
(a) a material adverse change in the financial condition of any
Guarantor or Company or (b) a breach of or noncompliance with any
term, condition or covenant contained herein or in the DIP Credit
Agreement, any other Loan Document or any other document
delivered pursuant hereto or thereto.
2.15 Set Off. In addition to any other rights any
Lender or Agent may have under law or in equity, if any amount
shall at any time be due and owing by any Guarantor to any Lender
or Agent under this Guaranty, such Lender or Agent is authorized
at any time or from time to time, without notice (any such notice
being hereby expressly waived), to set off and to appropriate and
to apply any and all deposits (general or special, including but
not limited to indebtedness evidenced by certificates of deposit,
whether matured or unmatured) and any other indebtedness of any
Lender or Agent owing to such Guarantor and any other property
of such Guarantor held by any Lender or Agent to or for the
credit or the account of such Guarantor against and on account
of the Guarantied Obligations and liabilities of such Guarantor
to any Lender or Agent under this Guaranty.
2.16 Discharge of Guaranty Upon Sale of Guarantor. If
all of the stock of any Guarantor or any of its successors in
interest under this Guaranty shall be sold or otherwise disposed
of (including by merger or consolidation) in a transaction
permitted by subsection 6.6 of the DIP Credit Agreement or
otherwise consented to by Required Lenders, the Guaranty of such
Guarantor or such successor in interest, as the case may be,
hereunder shall automatically be discharged and released without
any further action by Agent or any Lender or any other Person
effective as of the time of such sale or disposition; provided
that, as a condition precedent to such discharge and release,
Agent shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery to
Agent of the Net Cash Proceeds of such sale or disposition.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and Agent to accept this
Guaranty and to enter into the DIP Credit Agreement and to extend
credit thereunder, each Guarantor hereby represents and warrants
to Lenders that the following statements are true and correct:
3.1 Corporate Existence. Such Guarantor is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, has the
corporate power to own its assets and to transact the business
in which it is now engaged and is duly qualified as a foreign
corporation and in good standing under the laws of each
jurisdiction where its ownership or lease of property or the
conduct of its business requires such qualification, except for
failures to be so qualified, authorized or licensed that would
not in the aggregate have a material adverse effect on the
business, operations, assets or financial condition of such
Guarantor and its Subsidiaries, taken as a whole.
3.2 Corporate Power; Authorization; Enforceable
Obligations. Such Guarantor has the corporate power, authority
and legal right to execute, deliver and perform this Guaranty and
all obligations required hereunder and has taken all necessary
corporate action to authorize its Guaranty hereunder on the terms
and conditions hereof and its execution, delivery and performance
of this Guaranty and all obligations required hereunder. No
consent of any other Person including, without limitation,
stockholders and creditors of such Guarantor, and no license,
permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with, any
governmental authority is required by such Guarantor in
connection with this Guaranty or the execution, delivery,
performance, validity or enforceability of this Guaranty and all
obligations required hereunder. This Guaranty has been, and each
instrument or document required hereunder will be, executed and
delivered by a duly authorized officer of such Guarantor, and
this Guaranty constitutes, and each instrument or document
required hereunder when executed and delivered by such Guarantor
hereunder will constitute, the legally valid and binding
obligation of such Guarantor, enforceable against such Guarantor
in accordance with its terms, except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws or equitable principles relating
to or limiting creditors' rights generally.
3.3 No Legal Bar to this Guaranty. The execution, delivery
and performance of this Guaranty and the documents or instruments
required hereunder, and the use of the proceeds of the borrowings
under the DIP Credit Agreement, will not violate any provision
of any existing law or regulation binding on such Guarantor, or
any order, judgment, award or decree of any court, arbitrator or
governmental authority binding on such Guarantor, or the
certificate of incorporation or bylaws of such Guarantor or any
securities issued by such Guarantor, or any mortgage, indenture,
lease, contract or other agreement, instrument or undertaking to
which such Guarantor is a party or by which such Guarantor or any
of its assets may be bound, the violation of which would have a
material adverse effect on the business, operations, assets or
financial condition of such Guarantor and its Subsidiaries, taken
as a whole, and will not result in, or require, the creation or
imposition of any Lien on any of its property, assets or revenues
pursuant to the provisions of any such mortgage, indenture,
lease, contract or other agreement, instrument or undertaking.
3.4 Relationship to Company. (i) Such Guarantor is a
wholly-owned Subsidiary of Company; (ii) Lenders' agreement to
extend credit to Company is of substantial and material benefit
to such Guarantor; (iii) such Guarantor is fully informed of the
Bankruptcy Filing and the actual and potential consequences
thereof and (iv) such Guarantor has reviewed and approved copies
of the DIP Credit Agreement and the Notes and is fully informed
of the remedies Lenders may pursue upon the occurrence of an
Event of Default under the DIP Credit Agreement or the Notes.
SECTION 4. AFFIRMATIVE COVENANTS
Each Guarantor covenants and agrees that, unless and
until all of the Guarantied Obligations shall have been paid in
full and the Commitments shall have terminated and all Letters
of Credit shall have expired or been cancelled, unless Required
Lenders shall otherwise consent in writing:
4.1 Corporate Existence, Etc. Such Guarantor shall at all
times preserve and keep in full force and effect its corporate
existence and all rights and franchises material to its business.
4.2 Compliance with Laws, Etc. Such Guarantor shall comply
in all material respects with all applicable laws, rules,
regulations and orders, such compliance to include, without
limitation, paying when due all taxes, assessments and
governmental charges imposed upon it or upon any of its
properties or assets or in respect of any of its franchises,
businesses, income or property before any penalty or interest
accrues thereon.
4.3 Books and Records. Such Guarantor shall keep and
maintain books of record and account with respect to its
operations in accordance with generally accepted accounting
principles and shall permit Agent or any Lender and their
respective officers, employees and authorized agents, to the
extent Agent in good xxxxx xxxxx necessary for the proper
administration of this Guaranty, to examine, copy and make
excerpts from the books and records of such Guarantor and its
Subsidiaries and to inspect the properties of such Guarantor and
its Subsidiaries, both real and personal, at such reasonable
times as Agent may request.
SECTION 5. MISCELLANEOUS
5.1 Survival of Warranties. All agreements, representa-
tions and warranties made herein shall survive the execution and
delivery of this Guaranty and the other Loan Documents and any
increase in the Commitments under the DIP Credit Agreement.
5.2 Notices. Any communications between Agent and any
Guarantor and any notices or requests provided herein to be given
may be given by mailing the same, postage prepaid, or by telex,
facsimile transmission or cable to each such party at its address
set forth in the DIP Credit Agreement, on the signature pages
hereof or to such other addresses as each such party may in
writing hereafter indicate. Any notice, request or demand to or
upon Agent or Lenders or any Guarantor shall not be effective
until received.
5.3 Severability. In case any provision in or obligation
under this Guaranty shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
5.4 Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Guaranty, and no
consent to any departure by any Guarantor therefrom, shall in any
event be effective without the written concurrence of Required
Lenders under the DIP Credit Agreement and, in the case of any
such amendment or modification, each Guarantor against whom
enforcement of such amendment or modification is sought. Any
such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
5.5 Headings. Section and subsection headings in this
Guaranty are included herein for convenience of reference only
and shall not constitute a part of this Guaranty for any other
purpose or be given any substantive effect.
5.6 Applicable Law. THIS GUARANTY AND THE RIGHTS AND
OBLIGATIONS OF GUARANTORS, AGENT AND LENDERS HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
5.7 Successors and Assigns. This Guaranty is a continuing
guaranty and shall be binding upon each Guarantor and its
respective successors and assigns. This Guaranty shall inure to
the benefit of Lenders, Agent and their respective successors and
assigns. No Guarantor shall assign this Guaranty or any of the
rights or obligations of such Guarantor hereunder without the
prior written consent of all Lenders. Any Lender may, without
notice or consent, assign its interest in this Guaranty in whole
or in part. The terms and provisions of this Guaranty shall
inure to the benefit of any transferee or assignee of any
extension of credit, and in the event of such transfer or
assignment the rights and privileges herein conferred upon
Lenders and Agent shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and
conditions hereof.
5.8 Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT
OF OR RELATING TO THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK,
AND BY EXECUTION AND DELIVERY OF THIS GUARANTY EACH GUARANTOR
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY. Each
Guarantor hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or
certified mail, return receipt requested, to such Guarantor at
its address provided in subsection 5.2, such service being hereby
acknowledged by such Guarantor to be sufficient for personal
jurisdiction in any action against such Guarantor in any such
court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process
in any other manner permitted by law or shall limit the right of
Agent or any Lender to bring proceedings against any Guarantor
in the courts of any other jurisdiction.
5.9 Waiver of Trial by Jury. EACH GUARANTOR AND, BY ITS
ACCEPTANCE OF THE BENEFITS HEREOF, AGENT EACH HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. The scope
of this waiver is intended to be all encompassing of any and all
disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each Guarantor and, by its
acceptance of the benefits hereof, Agent, each (i) acknowledges
that this waiver is a material inducement for such Guarantor and
Agent to enter into a business relationship, that such Guarantor
and Agent have already relied on this waiver in entering into
this Guaranty or accepting the benefits thereof, as the case may
be, and that each will continue to rely on this waiver in their
related future dealings and (ii) further warrants and represents
that each has reviewed this waiver with its legal counsel, and
that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY
OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
GUARANTY. In the event of litigation, this Guaranty may be filed
as a written consent to a trial by the court.
5.10 No Other Writing. This writing is intended by
Guarantors and Agent as the final expression of this Guaranty and
is also intended as a complete and exclusive statement of the
terms of their agreement with respect to the matters covered
hereby. No course of dealing, course of performance or trade
usage, and no parol evidence of any nature, shall be used to
supplement or modify any terms of this Guaranty. There are no
conditions to the full effectiveness of this Guaranty.
5.11 Further Assurances. At any time or from time to
time, upon the request of Agent or Required Lenders, Guarantors
shall execute and deliver such further documents and do such
other acts and things as Agent or Required Lenders may reasonably
request in order to effect fully the purposes of this Guaranty.
5.12 Additional Guarantors. The initial Guarantors
hereunder shall be such of the Subsidiaries of Company as are
signatories hereto on the date hereof. From time to time
subsequent to the date hereof, additional Subsidiaries of Company
may become parties hereto, as additional Guarantors (each an
"Additional Guarantor"), by executing a counterpart of this
Guaranty. Upon delivery of any such counterpart to Agent, notice
of which is hereby waived by Guarantors, each such Additional
Guarantor shall be a Guarantor and shall be as fully a party
hereto as if such Additional Guarantor were an original signatory
hereof. Each Guarantor expressly agrees that its obligations
arising hereunder shall not be affected or diminished by the
addition or release of any other Guarantor hereunder, nor by any
election of Agent not to cause any Subsidiary of Company to
become an Additional Guarantor hereunder. This Guaranty shall
be fully effective as to any Guarantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails
to become or ceases to be a Guarantor hereunder.
5.13 Counterparts; Effectiveness. This Guaranty may be
executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original for all
purposes; but all such counterparts together shall constitute but
one and the same instrument. This Guaranty shall become
effective as to each Guarantor upon the execution of a
counterpart hereof by such Guarantor (whether or not a
counterpart hereof shall have been executed by any other
Guarantor) and receipt by Agent of written or telephonic
notification of such execution and authorization of delivery
thereof.
IN WITNESS WHEREOF, each of the undersigned Guarantors
has caused this Guaranty to be duly executed and delivered by its
officer thereunto duly authorized as of the date first written
above.
SCM (UNITED KINGDOM) LIMITED
By
Name:
Title:
Address:
Telecopy:
XXXXX CORONA OVERSEAS HOLDINGS, INC.
By
Name:
Title:
Address:
Telecopy:
XXXXX XXXXXX (UNITED KINGDOM) LIMITED
By
Name:
Title:
Address:
Telecopy:
O'M&M DRAFT
07/08/95
EXHIBIT K
FORM OF BORROWER PLEDGE AGREEMENT
This BORROWER PLEDGE AGREEMENT (this "Agreement") is
dated as of July 10, 1995 and entered into by and between
XXXXX CORONA CORPORATION, a Delaware corporation ("Pledgor"),
and CHEMICAL BANK, as agent for and representative of (in such
capacity herein called "Secured Party") the financial
institutions ("Lenders") party to the DIP Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS
A. Pledgor is the legal and beneficial owner of
(i) the shares of stock (the "Pledged Shares") described in
Part A of Schedule I annexed hereto and issued by the
corporations named therein and (ii) the indebtedness (the
"Pledged Debt") described in Part B of said Schedule I and
issued by the obligors named therein.
B. Secured Party and Lenders have entered into a
Debtor-in-Possession Credit Agreement dated as of July 10,
1995 (said Debtor-in-Possession Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from
time to time, being the "DIP Credit Agreement", the terms
defined therein and not otherwise defined herein being used
herein as therein defined) with Pledgor pursuant to which
Lenders have made certain commitments, subject to the terms
and conditions set forth in the DIP Credit Agreement, to
extend certain credit facilities to Pledgor.
C. It is a condition precedent to the initial
extensions of credit by Lenders under the DIP Credit Agreement
that Pledgor shall have granted the security interests and
undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and
in order to induce Lenders to make Loans and other extensions
of credit under the DIP Credit Agreement and for other good
and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
SECTION 1. Pledge of Security. Pledgor hereby
pledges and assigns to Secured Party, and hereby grants to
Secured Party a security interest in, all of Pledgor's right,
title and interest in and to the following (the "Pledged
Collateral"):
(a) the Pledged Shares and the certificates
representing the Pledged Shares and any interest of Pledgor in
the entries on the books of any financial intermediary
pertaining to the Pledged Shares, and all dividends, cash,
warrants, rights, instruments and other property or proceeds
from time to time received, receivable or otherwise distrib-
uted in respect of or in exchange for any or all of the
Pledged Shares;
(b) the Pledged Debt and the instruments evidencing
the Pledged Debt, and all interest, cash, instruments and
other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Debt;
(c) all additional shares of, and all securities
convertible into and warrants, options and other rights to
purchase or otherwise acquire, stock of any issuer of the
Pledged Shares from time to time acquired by Pledgor in any
manner (which shares shall be deemed to be part of the Pledged
Shares), the certificates or other instruments representing
such additional shares, securities, warrants, options or other
rights and any interest of Pledgor in the entries on the books
of any financial intermediary pertaining to such additional
shares, and all dividends, cash, warrants, rights, instruments
and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of such additional shares, securities,
warrants, options or other rights, provided, however, that in
no case shall shares of stock issued by [NAMES OF FOREIGN
SUBSIDIARIES] which constitute all or part of the Pledged
Shares exceed 66% of the total [number of] [voting power
represented by all] shares of such Subsidiary's capital stock
at any time outstanding;
(d) all additional indebtedness from time to time
owed to Pledgor by any obligor on the Pledged Debt and the
instruments evidencing such indebtedness, and all interest,
cash, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such indebtedness;
(e) all shares of, and all securities convertible
into and warrants, options and other rights to purchase or
otherwise acquire, stock of any Person that, after the date of
this Agreement, becomes, as a result of any occurrence, a
direct Subsidiary of Pledgor (which shares shall be deemed to
be part of the Pledged Shares), the certificates or other
instruments representing such shares, securities, warrants,
options or other rights and any interest of Pledgor in the
entries on the books of any financial intermediary pertaining
to such shares, and all dividends, cash, warrants, rights,
instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all of such shares, securities,
warrants, options or other rights, provided, however, that in
no case shall shares of stock issued by a Subsidiary which is
an entity organized under the laws of a jurisdiction other
than the United States or a political subdivision or territory
thereof which constitute all or part of the Pledged Shares
exceed 66% of the total [number of] [voting power represented
by all] shares of such Subsidiary's capital stock at any time
outstanding;
(f) all indebtedness from time to time owed to
Pledgor by any Person that, after the date of this Agreement,
becomes, as a result of any occurrence, a direct or indirect
Subsidiary of Pledgor, and all interest, cash, instruments and
other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness; and
(g) to the extent not covered by clauses (a) through
(f) above, all proceeds of any or all of the foregoing Pledged
Collateral. For purposes of this Agreement, the term
"proceeds" includes whatever is receivable or received when
Pledged Collateral or proceeds are sold, exchanged, collected
or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes, without
limitation, proceeds of any indemnity or guaranty payable to
Pledgor or Secured Party from time to time with respect to any
of the Pledged Collateral.
SECTION 2. Security for Obligations. This Agreement
secures, and the Pledged Collateral is collateral security
for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation
of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. article 362(a)), of all obligations and liabilities
of every nature of Pledgor now or hereafter existing under or
arising out of or in connection with the DIP Credit Agreement
and the other Loan Documents and all extensions or renewals
thereof, whether for principal, interest, reimbursement of
amounts drawn under Letters of Credit, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and
whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender as a
preference, fraudulent transfer or otherwise (all such
obligations and liabilities being the "Underlying Debt"), and
all obligations of every nature of Pledgor now or hereafter
existing under this Agreement (all such obligations of
Pledgor, together with the Underlying Debt, being the "Secured
Obligations").
SECTION 3. Delivery of Pledged Collateral. All
certificates or instruments representing or evidencing the
Pledged Collateral shall be delivered to and held by or on
behalf of Secured Party pursuant hereto and shall be in
suitable form for transfer by delivery or, as applicable,
shall be accompanied by Pledgor's endorsement, where neces-
sary, or duly executed instruments of transfer or assignment
in blank, all in form and substance satisfactory to Secured
Party. Secured Party shall have the right, at any time in its
discretion and without notice to Pledgor, to transfer to or to
register in the name of Secured Party or any of its nominees
any or all of the Pledged Collateral, subject only to the
revocable rights specified in Section 7(a). In addition,
Secured Party shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or
larger denominations.
SECTION 4. Representations and Warranties. Pledgor
represents and warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral.
All of the Pledged Shares have been duly authorized and
validly issued and are fully paid and non-assessable. All of
the Pledged Debt has been duly authorized, authenticated or
issued, and delivered and is the legal, valid and binding
obligation of the issuers thereof and is not in default.
(b) Description of Pledged Collateral. The Pledged
Shares constitute all of the issued and outstanding shares of
stock of each of the direct Subsidiaries of Pledgor, except as
otherwise set forth in Schedule II annexed hereto, and there
are no outstanding warrants, options or other rights to
purchase, or other agreements outstanding with respect to, or
property that is now or hereafter convertible into, or that
requires the issuance or sale of, any Pledged Shares. The
Pledged Debt constitutes all of the issued and outstanding
intercompany indebtedness evidenced by a promissory note of
the respective issuers thereof owing to Pledgor.
(c) Ownership of Pledged Collateral. Pledgor is the
legal, record and beneficial owner of the Pledged Collateral
free and clear of any Lien except for the security interest
created by this Agreement.
(d) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for
either (i) the pledge by Pledgor of the Pledged Collateral
pursuant to this Agreement and the grant by Pledgor of the
security interest granted hereby, (ii) the execution, delivery
or performance of this Agreement by Pledgor, or (iii) the
exercise by Secured Party of the voting or other rights, or
the remedies in respect of the Pledged Collateral, provided
for in this Agreement (except as may be required in connection
with a disposition of Pledged Collateral by laws affecting the
offering and sale of securities generally).
(e) Perfection. The pledge of the Pledged
Collateral pursuant to this Agreement creates a valid and
perfected first priority security interest in the Pledged
Collateral, securing the payment of the Secured Obligations.
(f) Margin Regulations. The pledge of the Pledged
Collateral pursuant to this Agreement does not violate
Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System.
(g) Other Information. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf
of Pledgor with respect to the Pledged Collateral is accurate
and complete in all respects.
SECTION 5. Transfers and Other Liens; Additional
Pledged Collateral; etc. Pledgor shall:
(a) not, except as expressly permitted by the DIP
Credit Agreement, (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Pledged Collateral, (ii) create or
suffer to exist any Lien upon or with respect to any of the
Pledged Collateral, except for the security interest under
this Agreement, or (iii) permit any issuer of Pledged Shares
to merge or consolidate unless all the outstanding capital
stock of the surviving or resulting corporation is, upon such
merger or consolidation, pledged hereunder and no cash,
securities or other property is distributed in respect of the
outstanding shares of any other constituent corporation;
provided that in the event Pledgor sells, assigns or disposes
of any Pledged Shares in a transaction permitted by the DIP
Credit Agreement, Secured Party shall release such Pledged
Shares to Pledgor free and clear of the lien and security
interest under this Agreement concurrently with the
consummation of such sale, assignment or disposition;
provided, further that, as a condition precedent to such
release, Secured Party shall have received evidence
satisfactory to it that arrangements satisfactory to it have
been made for delivery to Secured Party of the Net Cash
Proceeds of such sale, assignment or disposition. For
purposes of this subsection 5(a), "Net Cash Proceeds" shall
mean the cash proceeds of any sale, assignment or disposition
of Pledged Shares net of bona fide direct costs thereof
including, without limitation, (i) income taxes reasonably
estimated to be actually payable as a result of such sale,
assignment or disposition within two years of the date of
receipt of such cash proceeds, (ii) transfer, sales, use and
other taxes payable in connection with such sale, assignment
or disposition, (iii) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on any
indebtedness (other than extensions of credit under the DIP
Credit Agreement) that is secured by a Lien on the Pledged
Shares in question and that is required to be repaid under the
terms thereof as a result of such sale, assignment or
disposition, and (iv) broker's commissions and reasonable fees
and expenses of counsel in connection with such sale,
assignment or disposition.
(b) (i) cause each issuer of Pledged Shares not to
issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer,
except to Pledgor, (ii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all
additional shares of stock or other securities of each issuer
of Pledged Shares subject in each case to the restriction set
forth in subsection 1(c) hereof, and (iii) pledge hereunder,
immediately upon its acquisition (directly or indirectly)
thereof, any and all shares of stock of any Person that, after
the date of this Agreement, becomes, as a result of any
occurrence, a direct Subsidiary of Pledgor subject in each
case to the restriction set forth in subsection 1(e) hereof;
(c) (i) pledge hereunder, immediately upon their
issuance, any and all instruments or other evidences of
additional indebtedness from time to time owed to Pledgor by
any obligor on the Pledged Debt, and (ii) pledge hereunder,
immediately upon their issuance, any and all instruments or
other evidences of indebtedness from time to time owed to
Pledgor by any Person that after the date of this Agreement
becomes, as a result of any occurrence, a direct or indirect
Subsidiary of Pledgor;
(d) promptly notify Secured Party of any event of
which Pledgor becomes aware causing loss or depreciation in
the value of the Pledged Collateral;
(e) promptly deliver to Secured Party all written
notices received by it with respect to the Pledged Collateral;
and
(f) pay promptly when due all taxes, assessments and
governmental charges or levies imposed upon, and all claims
against, the Pledged Collateral, except to the extent the
validity thereof is being contested in good faith; provided
that Pledgor shall in any event pay such taxes, assessments,
charges, levies or claims not later than five days prior to
the date of any proposed sale under any judgement, writ or
warrant of attachment entered or filed against Pledgor or any
of the Pledged Collateral as a result of the failure to make
such payment.
SECTION 6. Further Assurances; Pledge Amendments.
(a) Pledgor agrees that from time to time, at the
expense of Pledgor, Pledgor will promptly execute and deliver
all further instruments and documents, and take all further
action, that may be necessary or desirable, or that Secured
Party may request, in order to perfect and protect any
security interest granted or purported to be granted hereby or
to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any Pledged Collateral.
Without limiting the generality of the foregoing, Pledgor
will: (i) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments
or notices, as may be necessary or desirable, or as Secured
Party may request, in order to perfect and preserve the
security interests granted or purported to be granted hereby
and (ii) at Secured Party's request, appear in and defend any
action or proceeding that may affect Pledgor's title to or
Secured Party's security interest in all or any part of the
Pledged Collateral.
(b) Pledgor further agrees that it will, upon
obtaining any additional shares of stock or other securities
required to be pledged hereunder as provided in Section 5(b)
or (c), promptly (and in any event within five Business Days)
deliver to Secured Party a Pledge Amendment, duly executed by
Pledgor, in substantially the form of Schedule III annexed
hereto (a "Pledge Amendment"), in respect of the additional
Pledged Shares or Pledged Debt to be pledged pursuant to this
Agreement. Pledgor hereby authorizes Secured Party to attach
each Pledge Amendment to this Agreement and agrees that all
Pledged Shares or Pledged Debt listed on any Pledge Amendment
delivered to Secured Party shall for all purposes hereunder be
considered Pledged Collateral; provided that the failure of
Pledgor to execute a Pledge Amendment with respect to any
additional Pledged Shares or Pledged Debt pledged pursuant to
this Agreement shall not impair the security interest of
Secured Party therein or otherwise adversely affect the rights
and remedies of Secured Party hereunder with respect thereto.
SECTION 7. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have
occurred and be continuing:
(i) Pledgor shall be entitled to exercise any and
all voting and other consensual rights pertaining to the
Pledged Collateral or any part thereof for any purpose
not inconsistent with the terms of this Agreement or the
Credit Agreement; provided, however, that Pledgor shall
not exercise or refrain from exercising any such right if
Secured Party shall have notified Pledgor that, in
Secured Party's judgment, such action would have a
material adverse effect on the value of the Pledged
Collateral or any part thereof; and provided, further,
that Pledgor shall give Secured Party at least five
Business Days' prior written notice of the manner in
which it intends to exercise, or the reasons for
refraining from exercising, any such right. It is under-
stood, however, that neither (A) the voting by Pledgor of
any Pledged Shares for or Pledgor's consent to the
election of directors at a regularly scheduled annual or
other meeting of stockholders or with respect to inciden-
tal matters at any such meeting nor (B) Pledgor's consent
to or approval of any action otherwise permitted under
this Agreement and the DIP Credit Agreement shall be
deemed inconsistent with the terms of this Agreement or
the DIP Credit Agreement within the meaning of this
Section 7(a)(i), and no notice of any such voting or
consent need be given to Secured Party;
(ii) Pledgor shall be entitled to receive and
retain, and to utilize free and clear of the lien of this
Agreement, any and all dividends and interest paid in
respect of the Pledged Collateral; provided, however,
that any and all
(A) dividends and interest paid or payable
other than in cash in respect of, and instruments and
other property received, receivable or otherwise
distributed in respect of, or in exchange for, any
Pledged Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged Collateral
in connection with a partial or total liquidation or
dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed
in respect of principal or in redemption of or in
exchange for any Pledged Collateral,
shall be, and shall forthwith be delivered to Secured
Party to hold as, Pledged Collateral and shall, if
received by Pledgor, be received in trust for the benefit
of Secured Party, be segregated from the other property
or funds of Pledgor and be forthwith delivered to Secured
Party as Pledged Collateral in the same form as so
received (with all necessary indorsements); and
(iii) Secured Party shall promptly execute and
deliver (or cause to be executed and delivered) to
Pledgor all such proxies, dividend payment orders and
other instruments as Pledgor may from time to time
reasonably request for the purpose of enabling Pledgor to
exercise the voting and other consensual rights which it
is entitled to exercise pursuant to paragraph (i) above
and to receive the dividends, principal or interest
payments which it is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuation
of an Event of Default and upon three Business Days' prior
notice as provided in Section 7 of the DIP Credit Agreement:
(i) upon written notice from Secured Party to
Pledgor, all rights of Pledgor to exercise the voting and
other consensual rights which it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall
cease, and all such rights shall thereupon become vested
in Secured Party who shall thereupon have the sole right
to exercise such voting and other consensual rights;
(ii) all rights of Pledgor to receive the
dividends and interest payments which it would otherwise
be authorized to receive and retain pursuant to Section
7(a)(ii) shall cease, and all such rights shall thereupon
become vested in Secured Party who shall thereupon have
the sole right to receive and hold as Pledged Collateral
such dividends and interest payments; and
(iii) all dividends, principal and interest pay-
ments which are received by Pledgor contrary to the
provisions of paragraph (ii) of this Section 7(b) shall
be received in trust for the benefit of Secured Party,
shall be segregated from other funds of Pledgor and shall
forthwith be paid over to Secured Party as Pledged
Collateral in the same form as so received (with any
necessary indorsements).
(c) In order to permit Secured Party to exercise the
voting and other consensual rights which it may be entitled to
exercise pursuant to Section 7(b)(i) and to receive all
dividends and other distributions which it may be entitled to
receive under Section 7(a)(ii) or Section 7(b)(ii),
(i) Pledgor shall promptly execute and deliver (or cause to be
executed and delivered) to Secured Party all such proxies,
dividend payment orders and other instruments as Secured Party
may from time to time reasonably request and (ii) without
limiting the effect of the immediately preceding clause (i),
Pledgor hereby grants to Secured Party an irrevocable proxy to
vote the Pledged Shares and to exercise all other rights,
powers, privileges and remedies to which a holder of the
Pledged Shares would be entitled (including, without
limitation, giving or withholding written consents of
shareholders, calling special meetings of shareholders and
voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action
(including any transfer of any Pledged Shares on the record
books of the issuer thereof) by any other Person (including
the issuer of the Pledged Shares or any officer or agent
thereof), upon the occurrence of an Event of Default and which
proxy shall terminate only upon the indefeasible payment in
full of the Secured Obligations.
SECTION 8. Secured Party Appointed Attorney-in-Fact.
Pledgor hereby irrevocably appoints Secured Party as Pledgor's
attorney-in-fact, with full authority in the place and stead
of Pledgor and in the name of Pledgor, Secured Party or
otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured
Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including without limitation:
(a) to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part
of the Pledged Collateral without the signature of Pledgor;
(b) to ask, demand, collect, xxx for, recover,
compound, receive and give acquittance and receipts for moneys
due and to become due under or in respect of any of the
Pledged Collateral;
(c) to receive, endorse and collect any instruments
made payable to Pledgor representing any dividend, principal
or interest payment or other distribution in respect of the
Pledged Collateral or any part thereof and to give full
discharge for the same; and
(d) to file any claims or take any action or
institute any proceedings that Secured Party may deem
necessary or desirable for the collection of any of the
Pledged Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Pledged Collateral.
SECTION 9. Secured Party May Perform. If Pledgor
fails to perform any agreement contained herein, Secured Party
may itself perform, or cause performance of, such agreement,
and the expenses of Secured Party incurred in connection
therewith shall be payable by Pledgor under Section 14(b).
SECTION 10. Standard of Care. The powers conferred
on Secured Party hereunder are solely to protect its interest
in the Pledged Collateral and shall not impose any duty upon
it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Pledged Collateral in
its possession and the accounting for moneys actually received
by it hereunder, Secured Party shall have no duty as to any
Pledged Collateral, it being understood that Secured Party
shall have no responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged
Collateral, whether or not Secured Party has or is deemed to
have knowledge of such matters, (b) taking any necessary steps
(other than steps taken in accordance with the standard of
care set forth above to maintain possession of the Pledged
Collateral) to preserve rights against any parties with
respect to any Pledged Collateral, (c) taking any necessary
steps to collect or realize upon the Secured Obligations or
any guarantee therefor, or any part thereof, or any of the
Pledged Collateral, or (d) initiating any action to protect
the Pledged Collateral against the possibility of a decline in
market value. Secured Party shall be deemed to have exercised
reasonable care in the custody and preservation of Pledged
Collateral in its possession if such Pledged Collateral is
accorded treatment substantially equal to that which Secured
Party accords its own property consisting of negotiable
securities.
SECTION 11. Remedies.
(a) If any Event of Default shall have occurred and
be continuing, Secured Party may exercise in respect of the
Pledged Collateral, in addition to all other rights and
remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under
the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "Code") (whether or not the Code applies to
the affected Pledged Collateral), and Secured Party may also
in its sole discretion, without notice except as specified
below or as expressly provided in Section 7 of the DIP Credit
Agreement, sell the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange
or broker's board or at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such
time or times and at such price or prices and upon such other
terms as Secured Party may deem commercially reasonable,
irrespective of the impact of any such sales on the market
price of the Pledged Collateral. Secured Party or any Lender
may be the purchaser of any or all of the Pledged Collateral
at any such sale and Secured Party, as agent for and
representative of Lenders (but not any Lender or Lenders in
its or their respective individual capacities unless Required
Lenders shall otherwise agree in writing), shall be entitled,
for the purpose of bidding and making settlement or payment of
the purchase price for all or any portion of the Pledged
Collateral sold at any such public sale, to use and apply any
of the Secured Obligations as a credit on account of the
purchase price for any Pledged Collateral payable by Secured
Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right
on the part of Pledgor, and Pledgor hereby waives (to the
extent permitted by applicable law) all rights of redemption,
stay and/or appraisal which it now has or may at any time in
the future have under any rule of law or statute now existing
or hereafter enacted. Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten days'
notice to Pledgor of the time and place of any public sale or
the time after which any private sale is to be made shall
constitute reasonable notification. Secured Party shall not
be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and
place to which it was so adjourned. Pledgor hereby waives any
claims against Secured Party arising by reason of the fact
that the price at which any Pledged Collateral may have been
sold at such a private sale was less than the price which
might have been obtained at a public sale, even if Secured
Party accepts the first offer received and does not offer such
Pledged Collateral to more than one offeree. If the proceeds
of any sale or other disposition of the Pledged Collateral are
insufficient to pay all the Secured Obligations, Pledgor shall
be liable for the deficiency and the fees of any attorneys
employed by Secured Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as from
time to time amended (the "Securities Act"), and applicable
state securities laws, Secured Party may be compelled, with
respect to any sale of all or any part of the Pledged Collat-
eral conducted without prior registration or qualification of
such Pledged Collateral under the Securities Act and/or such
state securities laws, to limit purchasers to those who will
agree, among other things, to acquire the Pledged Collateral
for their own account, for investment and not with a view to
the distribution or resale thereof. Pledgor acknowledges that
any such private sales may be at prices and on terms less
favorable than those obtainable through a public sale without
such restrictions (including, without limitation, a public
offering made pursuant to a registration statement under the
Securities Act) and, notwithstanding such circumstances and
the registration rights granted to Secured Party by Pledgor
pursuant to Section 12, Pledgor agrees that any such private
sale shall be deemed to have been made in a commercially
reasonable manner and that Secured Party shall have no
obligation to engage in public sales and no obligation to
delay the sale of any Pledged Collateral for the period of
time necessary to permit the issuer thereof to register it for
a form of public sale requiring registration under the Securi-
ties Act or under applicable state securities laws, even if
such issuer would, or should, agree to so register it.
(c) If Secured Party determines to exercise its
right to sell any or all of the Pledged Collateral, upon
written request, Pledgor shall and shall cause each issuer of
any Pledged Shares to be sold hereunder from time to time to
furnish to Secured Party all such information as Secured Party
may request in order to determine the number of shares and
other instruments included in the Pledged Collateral which may
be sold by Secured Party in exempt transactions under the
Securities Act and the rules and regulations of the Securities
and Exchange Commission thereunder, as the same are from time
to time in effect.
SECTION 12. Registration Rights. If Secured Party
shall determine to exercise its right to sell all or any of
the Pledged Collateral pursuant to Section 11, Pledgor agrees
that, upon request of Secured Party (which request may be made
by Secured Party in its sole discretion), Pledgor will, at its
own expense:
(a) execute and deliver, and cause each issuer of
the Pledged Collateral contemplated to be sold and the
directors and officers thereof to execute and deliver, all
such instruments and documents, and do or cause to be done all
such other acts and things, as may be necessary or, in the
opinion of Secured Party, advisable to register such Pledged
Collateral under the provisions of the Securities Act and to
cause the registration statement relating thereto to become
effective and to remain effective for such period as
prospectuses are required by law to be furnished, and to make
all amendments and supplements thereto and to the related
prospectus which, in the opinion of Secured Party, are
necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regula-
tions of the Securities and Exchange Commission applicable
thereto;
(b) use its best efforts to qualify the Pledged
Collateral under all applicable state securities or "Blue Sky"
laws and to obtain all necessary governmental approvals for
the sale of the Pledged Collateral, as requested by Secured
Party;
(c) cause each such issuer to make available to its
security holders, as soon as practicable, an earnings
statement which will satisfy the provisions of Section 11(a)
of the Securities Act;
(d) do or cause to be done all such other acts and
things as may be necessary to make such sale of the Pledged
Collateral or any part thereof valid and binding and in
compliance with applicable law; and
(e) bear all costs and expenses, including
reasonable attorneys' fees, of carrying out its obligations
under this Section 12.
Pledgor further agrees that a breach of any of the
covenants contained in this Section 12 will cause irreparable
injury to Secured Party, that Secured Party has no adequate
remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this Section 12
shall be specifically enforceable against Pledgor, and 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 default has occurred giving rise to the
Secured Obligations becoming due and payable prior to their
stated maturities. Nothing in this Section 12 shall in any
way alter the rights of Secured Party under Section 11.
SECTION 13. Application of Proceeds. Except as
expressly provided elsewhere in this Agreement, all proceeds
received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of
the Pledged Collateral may, in the discretion of Secured
Party, be held by Secured Party as Pledged Collateral for,
and/or then, or at any time thereafter, applied in full or in
part by Secured Party against, the Secured Obligations in the
following order of priority:
FIRST: To the payment of all costs and expenses of
such sale, collection or other realization, including
reasonable compensation to Secured Party and its agents
and counsel, and all other expenses, liabilities and
advances made or incurred by Secured Party in connection
therewith, and all amounts for which Secured Party is
entitled to indemnification hereunder and all advances
made by Secured Party hereunder for the account of
Pledgor, and to the payment of all costs and expenses
paid or incurred by Secured Party in connection with the
exercise of any right or remedy hereunder, all in
accordance with Section 14;
SECOND: To the payment of all other Secured
Obligations (for the ratable benefit of the holders
thereof) in such order as Secured Party shall elect; and
THIRD: To the payment to or upon the order of
Pledgor, or to whosoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such
proceeds.
SECTION 14. Indemnity and Expenses.
(a) Pledgor agrees to indemnify Secured Party and
each Lender from and against any and all claims, losses and
liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions
contemplated hereby (including, without limitation,
enforcement of this Agreement), except to the extent such
claims, losses or liabilities result solely from Secured
Party's or such Lender's gross negligence or willful
misconduct as finally determined by a court of competent
jurisdiction.
(b) Pledgor shall pay to Secured Party upon demand
the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts
and agents, that Secured Party may incur in connection with
(i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the
exercise or enforcement of any of the rights of Secured Party
hereunder, or (iv) the failure by Pledgor to perform or
observe any of the provisions hereof.
(c) In the event of any public sale described in
Section 12, Pledgor agrees to indemnify and hold harmless
Secured Party and each of Secured Party's directors, officers,
employees and agents from and against any loss, fee, cost,
expense, damage, liability or claim, joint or several, to
which Secured Party or such other persons may become subject
or for which any of them may be liable, under the Securities
Act or otherwise, insofar as such losses, fees, costs,
expenses, damages, liabilities or claims (or any litigation
commenced or threatened in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus,
registration statement, prospectus or other such document
published or filed in connection with such public sale, or any
amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse
Secured Party and such other persons for any legal or other
expenses reasonably incurred by Secured Party and such other
persons in connection with any litigation, of any nature
whatsoever, commenced or threatened in respect thereof
(including without limitation any and all fees, costs and
expenses whatsoever reasonably incurred by Secured Party and
such other persons and counsel for Secured Party and such
other persons in investigating, preparing for, defending
against or providing evidence, producing documents or taking
any other action in respect of, any such commenced or
threatened litigation or any claims asserted). This indemnity
shall be in addition to any liability which Pledgor may
otherwise have and shall extend upon the same terms and
conditions to each person, if any, that controls Secured Party
or such persons within the meaning of the Securities Act.
SECTION 15. Continuing Security Interest; Transfer
of Loans. This Agreement shall create a continuing security
interest in the Pledged Collateral and shall (a) remain in
full force and effect until the indefeasible payment in full
of all Secured Obligations, the cancellation or termination of
the Commitments and the cancellation or expiration of all
outstanding Letters of Credit, (b) be binding upon Pledgor,
its successors and assigns, and (c) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit
of Secured Party and its successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c),
but subject to the provisions of subsection 9.6 of the DIP
Credit Agreement, any Lender may assign or otherwise transfer
any Loans held by it to any other Person, and such other
Person shall thereupon become vested with all the benefits in
respect thereof granted to Lenders herein or otherwise. Upon
the indefeasible payment in full of all Secured Obligations,
the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of
Credit, the security interest granted hereby shall terminate
and all rights to the Pledged Collateral shall revert to
Pledgor. Upon any such termination Secured Party will, at
Pledgor's expense, execute and deliver to Pledgor such
documents as Pledgor shall reasonably request to evidence such
termination and Pledgor shall be entitled to the return, upon
its request and at its expense, against receipt and without
recourse to Secured Party, of such of the Pledged Collateral
as shall not have been sold or otherwise applied pursuant to
the terms hereof.
SECTION 16. Secured Party as Agent.
(a) Secured Party has been appointed to act as
Secured Party hereunder by Lenders. Secured Party shall be
obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any
action (including, without limitation, the release or
substitution of Pledged Collateral), solely in accordance with
this Agreement and the DIP Credit Agreement.
(b) Secured Party shall at all times be the same
Person that is Agent under the Credit Agreement. Notice of
resignation by Agent pursuant to subsection 8.9 of the DIP
Credit Agreement shall also constitute notice of resignation
as Secured Party under this Agreement and appointment of a
successor Agent pursuant to subsection 8.9 of the DIP Credit
Agreement shall also constitute appointment of a successor
Secured Party under this Agreement. Upon the acceptance of
any appointment as Agent under subsection 8.9 of the DIP
Credit Agreement by a successor Agent, that successor Agent
shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or
removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly
(i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder,
together with all records and other documents necessary or
appropriate in connection with the performance of the duties
of the successor Secured Party under this Agreement, and
(ii) execute and deliver to such successor Secured Party such
amendments to financing statements, and take such other
actions, as may be necessary or appropriate in connection with
the assignment to such successor Secured Party of the security
interests created hereunder, whereupon such retiring or
removed Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured
Party, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it
under this Agreement while it was Secured Party hereunder.
SECTION 17. Amendments; Etc. No amendment,
modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by Pledgor
therefrom, shall in any event be effective unless the same
shall be in writing and signed by Secured Party and, in the
case of any such amendment or modification, by Pledgor. Any
such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
SECTION 18. Notices. Any notice or other
communication herein required or permitted to be given shall
be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or
by courier service, upon receipt of telefacsimile or telex, or
three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed. For the
purposes hereof, the address of each party hereto shall be as
set forth under such party's name on the signature pages
hereof or, as to either party, such other address as shall be
designated by such party in a written notice delivered to the
other party hereto.
SECTION 19. Failure or Indulgence Not Waiver;
Remedies Cumulative. No failure or delay on the part of
Secured Party in the exercise of any power, right or privilege
hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such
power, right or privilege preclude any other or further
exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies
otherwise available.
SECTION 20. Severability. In case any provision in
or obligation under this Agreement shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations,
or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
SECTION 21. Headings. Section and subsection
headings in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive
effect.
SECTION 22. Governing Law; Terms. THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE
CODE PROVIDES THAT THE VALIDITY OR PERFECTION OF THE SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless
otherwise defined herein or in the Credit Agreement, terms
used in Articles 8 and 9 of the Uniform Commercial Code in the
State of New York are used herein as therein defined.
SECTION 23. Consent to Jurisdiction and Service of
Process. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEX-
CLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT. Pledgor hereby agrees that service of all process
in any such proceeding in any such court may be made by
registered or certified mail, return receipt requested, to
Pledgor at its address provided in Section 18, such service
being hereby acknowledged by Pledgor to be sufficient for
personal jurisdiction in any action against Pledgor in any
such court and to be otherwise effective and binding service
in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall
limit the right of Secured Party to bring proceedings against
Pledgor in the courts of any other jurisdiction.
SECTION 24. Waiver of Jury Trial. PLEDGOR AND
SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that
may be filed in any court and that relate to the subject
matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Pledgor and Secured
Party each acknowledge that this waiver is a material induce-
ment for Pledgor and Secured Party to enter into a business
relationship, that Pledgor and Secured Party have already
relied on this waiver in entering into this Agreement and that
each will continue to rely on this waiver in their related
future dealings. Pledgor and Secured Party further warrant
and represent that each has reviewed this waiver with its
legal counsel, and that each knowingly and voluntarily waives
its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT
BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of litigation,
this Agreement may be filed as a written consent to a trial by
the court.
SECTION 25. Counterparts. This Agreement may be
executed in one or more counterparts and by different parties
hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same
document.
IN WITNESS WHEREOF, Pledgor and Secured Party have
caused this Agreement to be duly executed and delivered by
their respective officers thereunto duly authorized as of the
date first written above.
XXXXX XXXXXX CORPORATION
By: __________________________
Name:
Title:
Notice Address: _____________________
_____________________
_____________________
Telecopy:____________
CHEMICAL BANK
By: __________________________
Name:
Title:
Notice Address: _____________________
_____________________
_____________________
Telecopy:____________
SCHEDULE I
Attached to and forming a part of the Pledge
Agreement dated as of July ___, 1995 between Xxxxx Corona
Corporation, as Pledgor, and Chemical Bank, as Secured Party.
Part A
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
Part B
Debt Issuer Amount of Indebtedness
SCHEDULE II
Attached to and forming a part of the Pledge
Agreement dated as of July ___, 1995 between Xxxxx Xxxxxx
Corporation, as Pledgor, and Chemical Bank, as Secured Party.
Percentage
Number of Represented Holders
Shares Issued by Pledged of Shares
Stock Issuer and Outstanding Shares Not Pledged
SCHEDULE III
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________, 19__, is
delivered pursuant to Section 6(b) of the Pledge Agreement
referred to below. The undersigned hereby agrees that this
Pledge Amendment may be attached to the Pledge Agreement dated
July ___, 1995, between the undersigned and Chemical Bank, as
Secured Party (the "Pledge Agreement," capitalized terms
defined therein being used herein as therein defined), and
that the [Pledged Shares] [Pledged Debt] listed on this Pledge
Amendment shall be deemed to be part of the [Pledged Shares]
[Pledged Debt] and shall become part of the Pledged Collateral
and shall secure all Secured Obligations.
XXXXX CORONA CORPORATION
By: ___________________________
Name:
Title:
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
Debt Issuer Amount of Indebtedness
O'M&M DRAFT
07/09/95
EXHIBIT L
FORM OF GUARANTOR PLEDGE AGREEMENT
This GUARANTOR PLEDGE AGREEMENT (this "Agreement") is
dated as of July 10, 1995 and entered into by and among EACH
OF THE UNDERSIGNED PARTIES (each individually a "Pledgor" and
collectively the "Pledgors"), and CHEMICAL BANK, as agent for
and representative of (in such capacity herein called "Secured
Party") the financial institutions ("Lenders") party to the
DIP Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Pledgors are the legal and beneficial owners of
(i) the shares of stock (the "Pledged Shares") described in
Part A of Schedule I annexed hereto and issued by the
corporations named therein and (ii) the indebtedness (the
"Pledged Debt") described in Part B of said Schedule I and
issued by the obligors named therein.
B. Secured Party and Lenders have entered into a
Debtor-in-Possession Credit Agreement dated as of July 10,
1995 (said Debtor-in-Possession Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from
time to time, being the "DIP Credit Agreement", the terms
defined therein and not otherwise defined herein being used
herein as therein defined) with Xxxxx Xxxxxx Corporation, a
Delaware corporation ("Company"), pursuant to which Lenders
have made certain commitments, subject to the terms and
conditions set forth in the DIP Credit Agreement, to extend
certain credit facilities to Company.
C. Pledgors have executed and delivered a
Subsidiary Guaranty dated as of July 10, 1995 (said Subsidiary
Guaranty, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Subsidiary
Guaranty") in favor of Secured Party for the ratable benefit
of Lenders, pursuant to which Pledgors have guarantied the
prompt payment and performance when due of all obligations of
Company under the DIP Credit Agreement.
D. It is a condition precedent to the initial
extensions of credit by Lenders under the DIP Credit Agreement
that Pledgors shall have granted the security interests and
undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and
in order to induce Lenders to make Loans and other extensions
of credit under the DIP Credit Agreement and for other good
and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, each Pledgor hereby agrees with
Secured Party as follows:
SECTION 1. Pledge of Security. Each Pledgor hereby
pledges and assigns to Secured Party, and hereby grants to
Secured Party a security interest in, all of such Pledgor's
right, title and interest in and to the following (the
"Pledged Collateral"):
(a) the Pledged Shares and the certificates
representing the Pledged Shares and any interest of such
Pledgor in the entries on the books of any financial
intermediary pertaining to the Pledged Shares, and all
dividends, cash, warrants, rights, instruments and other
property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or
all of the Pledged Shares;
(b) the Pledged Debt and the instruments evidencing
the Pledged Debt, and all interest, cash, instruments and
other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Debt;
(c) all additional shares of, and all securities
convertible into and warrants, options and other rights to
purchase or otherwise acquire, stock of any issuer of the
Pledged Shares from time to time acquired by such Pledgor in
any manner (which shares shall be deemed to be part of the
Pledged Shares), the certificates or other instruments
representing such additional shares, securities, warrants,
options or other rights and any interest of Pledgor in the
entries on the books of any financial intermediary pertaining
to such additional shares, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time
to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such additional
shares, securities, warrants, options or other rights,
provided, however, that in no case shall shares of stock
issued by [NAMES OF FOREIGN SUBSIDIARIES] which constitute all
or part of the Pledged Shares exceed 66% of the total [number
of] [voting power represented by all] shares of such
Subsidiary's capital stock at any time outstanding;
(d) all additional indebtedness from time to time
owed to such Pledgor by any obligor on the Pledged Debt and
the instruments evidencing such indebtedness, and all
interest, cash, instruments and other property or proceeds
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
such indebtedness;
(e) all shares of, and all securities convertible
into and warrants, options and other rights to purchase or
otherwise acquire, stock of any Person that, after the date of
this Agreement, becomes, as a result of any occurrence, a
direct Subsidiary of such Pledgor (which shares shall be
deemed to be part of the Pledged Shares), the certificates or
other instruments representing such shares, securities,
warrants, options or other rights and any interest of such
Pledgor in the entries on the books of any financial
intermediary pertaining to such shares, and all dividends,
cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
such shares, securities, warrants, options or other rights,
provided, however, that in no case shall shares of stock
issued by a Subsidiary which is an entity organized under the
laws of a jurisdiciton other than the United States or a
political subdivision or territory thereof which constitute
all or part of the Pledged Shares exceed 66% of the total
[number of] [voting power represented by all] shares of such
Subsidiary's capital stock at any time outstanding;
(f) all indebtedness from time to time owed to such
Pledgor by any Person that, after the date of this Agreement,
becomes, as a result of any occurrence, a direct or indirect
Subsidiary of such Pledgor, and all interest, cash,
instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all of such indebtedness; and
(g) to the extent not covered by clauses (a) through
(f) above, all proceeds of any or all of the foregoing Pledged
Collateral. For purposes of this Agreement, the term
"proceeds" includes whatever is receivable or received when
Pledged Collateral or proceeds are sold, exchanged, collected
or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes, without
limitation, proceeds of any indemnity or guaranty payable to
Pledgor or Secured Party from time to time with respect to any
of the Pledged Collateral.
SECTION 2. Security for Obligations. This Agreement
secures, and the Pledged Collateral is collateral security
for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation
of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. article 362(a)), of all obligations and liabilities
of every nature of Pledgors now or hereafter existing under or
arising out of or in connection with the Subsidiary Guaranty
and all extensions or renewals thereof, whether for principal,
interest, fees, expenses, indemnities or otherwise, whether
voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly
owed with others, and whether or not from time to time
decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly
from Secured Party or any Lender as a preference, fraudulent
transfer or otherwise (all such obligations and liabilities
being the "Underlying Debt"), and all obligations of every
nature of Pledgors now or hereafter existing under this
Agreement (all such obligations of Pledgors, together with the
Underlying Debt, being the "Secured Obligations").
SECTION 3. Delivery of Pledged Collateral. All
certificates or instruments representing or evidencing the
Pledged Collateral shall be delivered to and held by or on
behalf of Secured Party pursuant hereto and shall be in
suitable form for transfer by delivery or, as applicable,
shall be accompanied by the applicable Pledgor's endorsement,
where necessary, or duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to
Secured Party. Secured Party shall have the right, at any
time in its discretion and without notice to any Pledgor, to
transfer to or to register in the name of Secured Party or any
of its nominees any or all of the Pledged Collateral, subject
only to the revocable rights specified in Section 7(a). In
addition, Secured Party shall have the right at any time to
exchange certificates or instruments representing or evi-
dencing Pledged Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 4. Representations and Warranties. Each
Pledgor represents and warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral.
All of the Pledged Shares have been duly authorized and
validly issued and are fully paid and non-assessable. All of
the Pledged Debt has been duly authorized, authenticated or
issued, and delivered and is the legal, valid and binding
obligation of the issuers thereof and is not in default.
(b) Description of Pledged Collateral. The Pledged
Shares constitute all of the issued and outstanding shares of
stock of each issuer thereof, except as otherwise set forth in
Schedule II annexed hereto, and there are no outstanding
warrants, options or other rights to purchase, or other agree-
ments outstanding with respect to, or property that is now or
hereafter convertible into, or that requires the issuance or
sale of, any Pledged Shares. The Pledged Debt constitutes all
of the issued and outstanding intercompany indebtedness
evidenced by a promissory note of the respective issuers
thereof owing to any Pledgor.
(c) Ownership of Pledged Collateral. Each Pledgor
is the legal, record and beneficial owner of the Pledged
Collateral pledged by such Pledgor free and clear of any Lien
except for the security interest created by this Agreement.
(d) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for
either (i) the pledge by any Pledgor of the Pledged Collateral
pursuant to this Agreement and the grant by any Pledgor of the
security interest granted hereby, (ii) the execution, delivery
or performance of this Agreement by any Pledgor, or (iii) the
exercise by Secured Party of the voting or other rights, or
the remedies in respect of the Pledged Collateral, provided
for in this Agreement (except as may be required in connection
with a disposition of Pledged Collateral by laws affecting the
offering and sale of securities generally).
(e) Perfection. The pledge of the Pledged
Collateral pursuant to this Agreement creates a valid and
perfected first priority security interest in the Pledged
Collateral, securing the payment of the Secured Obligations.
(f) Margin Regulations. The pledge of the Pledged
Collateral pursuant to this Agreement does not violate
Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System.
(g) Other Information. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf
of Pledgors with respect to the Pledged Collateral is accurate
and complete in all respects.
SECTION 5. Transfers and Other Liens; Additional
Pledged Collateral; etc. Each Pledgor shall:
(a) not, except as expressly permitted by the DIP
Credit Agreement, (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Pledged Collateral, (ii) create or
suffer to exist any Lien upon or with respect to any of the
Pledged Collateral, except for the security interest under
this Agreement, or (iii) permit any issuer of Pledged Shares
to merge or consolidate unless all the outstanding capital
stock of the surviving or resulting corporation is, upon such
merger or consolidation, pledged hereunder and no cash,
securities or other property is distributed in respect of the
outstanding shares of any other constituent corporation;
provided that in the event any Pledgor sells, assigns or
disposes of any Pledged Shares in a transaction permitted by
the DIP Credit Agreement, Secured Party shall release such
Pledged Shares to Pledgor free and clear of the lien and
security interest under this Agreement concurrently with the
consummation of such sale, assignment or disposition;
provided, further that, as a condition precedent to such
release, Secured Party shall have received evidence
satisfactory to it that arrangements satisfactory to it have
been made for delivery to Secured Party of the Net Cash
Proceeds of such sale, assignment or disposition. For
purposes of this subsection 5(a), "Net Cash Proceeds" shall
mean the cash proceeds of any sale, assignment or disposition
of Pledged Shares net of bona fide direct costs thereof
including, without limitation, (i) income taxes reasonably
estimated to be actually payable as a result of such sale,
assignment or disposition within two years of the date of
receipt of such cash proceeds, (ii) transfer, sales, use and
other taxes payable in connection with such sale, assignment
or disposition, (iii) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on any
indebtedness (other than extensions of credit under the DIP
Credit Agreement) that is secured by a Lien on the Pledged
Shares in question and that is required to be repaid under the
terms thereof as a result of such sale, assignment or
disposition, and (iv) broker's commissions and reasonable fees
and expenses of counsel in connection with such sale,
assignment or disposition.
(b) (i) cause each issuer of Pledged Shares not to
issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer,
except to the applicable Pledgor, (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly)
thereof, any and all additional shares of stock or other
securities of each issuer of Pledged Shares subject in each
case to the restriction set forth in subsection 1(c) hereof,
and (iii) pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any and all shares of stock
of any Person that, after the date of this Agreement, becomes,
as a result of any occurrence, a direct Subsidiary of such
Pledgor subject in each case to the restriction set forth in
subsection 1(e) hereof;
(c) (i) pledge hereunder, immediately upon their
issuance, any and all instruments or other evidences of
additional indebtedness from time to time owed to such Pledgor
by any obligor on the Pledged Debt, and (ii) pledge hereunder,
immediately upon their issuance, any and all instruments or
other evidences of indebtedness from time to time owed to such
Pledgor by any Person that after the date of this Agreement
becomes, as a result of any occurrence, a direct or indirect
Subsidiary of such Pledgor;
(d) promptly notify Secured Party of any event of
which such Pledgor becomes aware causing loss or depreciation
in the value of the Pledged Collateral;
(e) promptly deliver to Secured Party all written
notices received by it with respect to the Pledged Collateral;
and
(f) pay promptly when due all taxes, assessments and
governmental charges or levies imposed upon, and all claims
against, the Pledged Collateral, except to the extent the
validity thereof is being contested in good faith; provided
that such Pledgor shall in any event pay such taxes,
assessments, charges, levies or claims not later than five
days prior to the date of any proposed sale under any
judgement, writ or warrant of attachment entered or filed
against such Pledgor or any of the Pledged Collateral as a
result of the failure to make such payment.
SECTION 6. Further Assurances; Pledge Amendments.
(a) Each Pledgor agrees that from time to time, at
the expense of such Pledgor, such Pledgor will promptly
execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and
protect any security interest granted or purported to be
granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any
Pledged Collateral. Without limiting the generality of the
foregoing, each Pledgor will: (i) execute and file such
financing or continuation statements, or amendments thereto,
and such other instruments or notices, as may be necessary or
desirable, or as Secured Party may request, in order to
perfect and preserve the security interests granted or
purported to be granted hereby and (ii) at Secured Party's
request, appear in and defend any action or proceeding that
may affect such Pledgor's title to or Secured Party's security
interest in all or any part of the Pledged Collateral.
(b) Each Pledgor further agrees that it will, upon
obtaining any additional shares of stock or other securities
required to be pledged hereunder as provided in Section 5(b)
or (c), promptly (and in any event within five Business Days)
deliver to Secured Party a Pledge Amendment, duly executed by
such Pledgor, in substantially the form of Schedule III
annexed hereto (a "Pledge Amendment"), in respect of the
additional Pledged Shares or Pledged Debt to be pledged
pursuant to this Agreement. Each Pledgor hereby authorizes
Secured Party to attach each Pledge Amendment to this
Agreement and agrees that all Pledged Shares or Pledged Debt
listed on any Pledge Amendment delivered to Secured Party
shall for all purposes hereunder be considered Pledged
Collateral; provided that the failure of Pledgor to execute a
Pledge Amendment with respect to any additional Pledged Shares
or Pledged Debt pledged pursuant to this Agreement shall not
impair the security interest of Secured Party therein or
otherwise adversely affect the rights and remedies of Secured
Party hereunder with respect thereto.
SECTION 7. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have
occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any
and all voting and other consensual rights pertaining to
the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms of this Agreement
or the Credit Agreement; provided, however, that no
Pledgor shall exercise or refrain from exercising any
such right if Secured Party shall have notified such
Pledgor that, in Secured Party's judgment, such action
would have a material adverse effect on the value of the
Pledged Collateral or any part thereof; and provided,
further, that such Pledgor shall give Secured Party at
least five Business Days' prior written notice of the
manner in which it intends to exercise, or the reasons
for refraining from exercising, any such right. It is
understood, however, that neither (A) the voting by any
Pledgor of any Pledged Shares for or any Pledgor's
consent to the election of directors at a regularly
scheduled annual or other meeting of stockholders or with
respect to incidental matters at any such meeting nor
(B) any Pledgor's consent to or approval of any action
otherwise permitted under this Agreement and the DIP
Credit Agreement shall be deemed inconsistent with the
terms of this Agreement or the DIP Credit Agreement
within the meaning of this Section 7(a)(i), and no notice
of any such voting or consent need be given to Secured
Party;
(ii) Each Pledgor shall be entitled to receive
and retain, and to utilize free and clear of the lien of
this Agreement, any and all dividends and interest paid
in respect of the Pledged Collateral; provided, however,
that any and all
(A) dividends and interest paid or payable
other than in cash in respect of, and instruments and
other property received, receivable or otherwise
distributed in respect of, or in exchange for, any
Pledged Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged Collateral
in connection with a partial or total liquidation or
dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed
in respect of principal or in redemption of or in
exchange for any Pledged Collateral,
shall be, and shall forthwith be delivered to Secured
Party to hold as, Pledged Collateral and shall, if
received by any Pledgor, be received in trust for the
benefit of Secured Party, be segregated from the other
property or funds of such Pledgor and be forthwith
delivered to Secured Party as Pledged Collateral in the
same form as so received (with all necessary
indorsements); and
(iii) Secured Party shall promptly execute and
deliver (or cause to be executed and delivered) to the
applicable Pledgor all such proxies, dividend payment
orders and other instruments as such Pledgor may from
time to time reasonably request for the purpose of
enabling such Pledgor to exercise the voting and other
consensual rights which it is entitled to exercise
pursuant to paragraph (i) above and to receive the
dividends, principal or interest payments which it is
authorized to receive and retain pursuant to paragraph
(ii) above.
(b) Upon the occurrence and during the continuation
of an Event of Default and upon three days Business Day's
prior notice as provided in Section 7 of the DIP Credit
Agreement:
(i) upon written notice from Secured Party to any
Pledgor, all rights of such Pledgor to exercise the
voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section
7(a)(i) shall cease, and all such rights shall thereupon
become vested in Secured Party who shall thereupon have
the sole right to exercise such voting and other
consensual rights;
(ii) all rights of Pledgors to receive the
dividends and interest payments which it would otherwise
be authorized to receive and retain pursuant to Section
7(a)(ii) shall cease, and all such rights shall thereupon
become vested in Secured Party who shall thereupon have
the sole right to receive and hold as Pledged Collateral
such dividends and interest payments; and
(iii) all dividends, principal and interest pay-
ments which are received by any Pledgor contrary to the
provisions of paragraph (ii) of this Section 7(b) shall
be received in trust for the benefit of Secured Party,
shall be segregated from other funds of such Pledgor and
shall forthwith be paid over to Secured Party as Pledged
Collateral in the same form as so received (with any
necessary indorsements).
(c) In order to permit Secured Party to exercise the
voting and other consensual rights which it may be entitled to
exercise pursuant to Section 7(b)(i) and to receive all
dividends and other distributions which it may be entitled to
receive under Section 7(a)(ii) or Section 7(b)(ii), (i) each
Pledgor shall promptly execute and deliver (or cause to be
executed and delivered) to Secured Party all such proxies,
dividend payment orders and other instruments as Secured Party
may from time to time reasonably request and (ii) without
limiting the effect of the immediately preceding clause (i),
each Pledgor hereby grants to Secured Party an irrevocable
proxy to vote the Pledged Shares and to exercise all other
rights, powers, privileges and remedies to which a holder of
the Pledged Shares would be entitled (including, without
limitation, giving or withholding written consents of
shareholders, calling special meetings of shareholders and
voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action
(including any transfer of any Pledged Shares on the record
books of the issuer thereof) by any other Person (including
the issuer of the Pledged Shares or any officer or agent
thereof), upon the occurrence of an Event of Default and which
proxy shall terminate only upon the indefeasible payment in
full of the Secured Obligations.
SECTION 8. Secured Party Appointed Attorney-in-Fact.
Each Pledgor hereby irrevocably appoints Secured Party as such
Pledgor's attorney-in-fact, with full authority in the place
and stead of such Pledgor and in the name of such Pledgor,
Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable
to accomplish the purposes of this Agreement, including
without limitation:
(a) to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part
of the Pledged Collateral without the signature of such
Pledgor;
(b) to ask, demand, collect, xxx for, recover,
compound, receive and give acquittance and receipts for moneys
due and to become due under or in respect of any of the
Pledged Collateral;
(c) to receive, endorse and collect any instruments
made payable to such Pledgor representing any dividend,
principal or interest payment or other distribution in respect
of the Pledged Collateral or any part thereof and to give full
discharge for the same; and
(d) to file any claims or take any action or
institute any proceedings that Secured Party may deem
necessary or desirable for the collection of any of the
Pledged Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Pledged Collateral.
SECTION 9. Secured Party May Perform. If any
Pledgor fails to perform any agreement contained herein,
Secured Party may itself perform, or cause performance of,
such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgors under
Section 14(b).
SECTION 10. Standard of Care. The powers conferred
on Secured Party hereunder are solely to protect its interest
in the Pledged Collateral and shall not impose any duty upon
it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Pledged Collateral in
its possession and the accounting for moneys actually received
by it hereunder, Secured Party shall have no duty as to any
Pledged Collateral, it being understood that Secured Party
shall have no responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged
Collateral, whether or not Secured Party has or is deemed to
have knowledge of such matters, (b) taking any necessary steps
(other than steps taken in accordance with the standard of
care set forth above to maintain possession of the Pledged
Collateral) to preserve rights against any parties with
respect to any Pledged Collateral, (c) taking any necessary
steps to collect or realize upon the Secured Obligations or
any guarantee therefor, or any part thereof, or any of the
Pledged Collateral, or (d) initiating any action to protect
the Pledged Collateral against the possibility of a decline in
market value. Secured Party shall be deemed to have exercised
reasonable care in the custody and preservation of Pledged
Collateral in its possession if such Pledged Collateral is
accorded treatment substantially equal to that which Secured
Party accords its own property consisting of negotiable
securities.
SECTION 11. Remedies.
(a) If any Event of Default shall have occurred and
be continuing, Secured Party may exercise in respect of the
Pledged Collateral, in addition to all other rights and
remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under
the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "Code") (whether or not the Code applies to
the affected Pledged Collateral), and Secured Party may also
in its sole discretion, without notice except as specified
below or as expressly provided in Section 7 of the DIP
Agreement, sell the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange
or broker's board or at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such
time or times and at such price or prices and upon such other
terms as Secured Party may deem commercially reasonable,
irrespective of the impact of any such sales on the market
price of the Pledged Collateral. Secured Party or any Lender
may be the purchaser of any or all of the Pledged Collateral
at any such sale and Secured Party, as agent for and
representative of Lenders (but not any Lender or Lenders in
its or their respective individual capacities unless Required
Lenders shall otherwise agree in writing), shall be entitled,
for the purpose of bidding and making settlement or payment of
the purchase price for all or any portion of the Pledged
Collateral sold at any such public sale, to use and apply any
of the Secured Obligations as a credit on account of the
purchase price for any Pledged Collateral payable by Secured
Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right
on the part of any Pledgor, and each Pledgor hereby waives (to
the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute
now existing or hereafter enacted. Each Pledgor agrees that,
to the extent notice of sale shall be required by law, at
least ten days' notice to such Pledgor of the time and place
of any public sale or the time after which any private sale is
to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given.
Secured Party may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Each Pledgor hereby
waives any claims against Secured Party arising by reason of
the fact that the price at which any Pledged Collateral may
have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if
Secured Party accepts the first offer received and does not
offer such Pledged Collateral to more than one offeree. If
the proceeds of any sale or other disposition of the Pledged
Collateral are insufficient to pay all the Secured Obliga-
tions, Pledgors shall be liable for the deficiency and the
fees of any attorneys employed by Secured Party to collect
such deficiency.
(b) Each Pledgor recognizes that, by reason of
certain prohibitions contained in the Securities Act of 1933,
as from time to time amended (the "Securities Act"), and
applicable state securities laws, Secured Party may be
compelled, with respect to any sale of all or any part of the
Pledged Collateral conducted without prior registration or
qualification of such Pledged Collateral under the Securities
Act and/or such state securities laws, to limit purchasers to
those who will agree, among other things, to acquire the
Pledged Collateral for their own account, for investment and
not with a view to the distribution or resale thereof. Each
Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable than those obtainable
through a public sale without such restrictions (including,
without limitation, a public offering made pursuant to a
registration statement under the Securities Act) and,
notwithstanding such circumstances and the registration rights
granted to Secured Party by such Pledgor pursuant to
Section 12, such Pledgor agrees that any such private sale
shall be deemed to have been made in a commercially reasonable
manner and that Secured Party shall have no obligation to
engage in public sales and no obligation to delay the sale of
any Pledged Collateral for the period of time necessary to
permit the issuer thereof to register it for a form of public
sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would,
or should, agree to so register it.
(c) If Secured Party determines to exercise its
right to sell any or all of the Pledged Collateral, upon
written request, each Pledgor shall and shall cause each
issuer of any Pledged Shares to be sold hereunder from time to
time to furnish to Secured Party all such information as
Secured Party may request in order to determine the number of
shares and other instruments included in the Pledged
Collateral which may be sold by Secured Party in exempt
transactions under the Securities Act and the rules and
regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
SECTION 12. Registration Rights. If Secured Party
shall determine to exercise its right to sell all or any of
the Pledged Collateral pursuant to Section 11, each Pledgor
agrees that, upon request of Secured Party (which request may
be made by Secured Party in its sole discretion), such Pledgor
will, at its own expense:
(a) execute and deliver, and cause each issuer of
the Pledged Collateral contemplated to be sold and the
directors and officers thereof to execute and deliver, all
such instruments and documents, and do or cause to be done all
such other acts and things, as may be necessary or, in the
opinion of Secured Party, advisable to register such Pledged
Collateral under the provisions of the Securities Act and to
cause the registration statement relating thereto to become
effective and to remain effective for such period as
prospectuses are required by law to be furnished, and to make
all amendments and supplements thereto and to the related
prospectus which, in the opinion of Secured Party, are
necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regula-
tions of the Securities and Exchange Commission applicable
thereto;
(b) use its best efforts to qualify the Pledged
Collateral under all applicable state securities or "Blue Sky"
laws and to obtain all necessary governmental approvals for
the sale of the Pledged Collateral, as requested by Secured
Party;
(c) cause each such issuer to make available to its
security holders, as soon as practicable, an earnings
statement which will satisfy the provisions of Section 11(a)
of the Securities Act;
(d) do or cause to be done all such other acts and
things as may be necessary to make such sale of the Pledged
Collateral or any part thereof valid and binding and in
compliance with applicable law; and
(e) bear all costs and expenses, including
reasonable attorneys' fees, of carrying out its obligations
under this Section 12.
Each Pledgor further agrees that a breach of any of
the covenants contained in this Section 12 will cause
irreparable injury to Secured Party, that Secured Party has no
adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this
Section 12 shall be specifically enforceable against such
Pledgor, and 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 default has
occurred giving rise to the Secured Obligations becoming due
and payable prior to their stated maturities. Nothing in this
Section 12 shall in any way alter the rights of Secured Party
under Section 11.
SECTION 13. Application of Proceeds. Except as
expressly provided elsewhere in this Agreement, all proceeds
received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of
the Pledged Collateral may, in the discretion of Secured
Party, be held by Secured Party as Pledged Collateral for,
and/or then, or at any time thereafter, applied in full or in
part by Secured Party against, the Secured Obligations in the
following order of priority:
FIRST: To the payment of all costs and expenses of
such sale, collection or other realization, including
reasonable compensation to Secured Party and its agents
and counsel, and all other expenses, liabilities and
advances made or incurred by Secured Party in connection
therewith, and all amounts for which Secured Party is
entitled to indemnification hereunder and all advances
made by Secured Party hereunder for the account of any
Pledgor, and to the payment of all costs and expenses
paid or incurred by Secured Party in connection with the
exercise of any right or remedy hereunder, all in
accordance with Section 14;
SECOND: To the payment of all other Secured
Obligations (for the ratable benefit of the holders
thereof) in such order as Secured Party shall elect; and
THIRD: To the payment to or upon the order of
Pledgors, or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such
proceeds.
SECTION 14. Indemnity and Expenses.
(a) Pledgors agree, jointly and severally, to
indemnify Secured Party and each Lender from and against any
and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from
Secured Party's or such Lender's gross negligence or willful
misconduct as finally determined by a court of competent
jurisdiction.
(b) Pledgors agree, jointly and severally, to pay to
Secured Party upon demand the amount of any and all costs and
expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that Secured Party may
incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale
of, collection from, or other realization upon, any of the
Pledged Collateral, (iii) the exercise or enforcement of any
of the rights of Secured Party hereunder, or (iv) the failure
by any Pledgor to perform or observe any of the provisions
hereof.
(c) In the event of any public sale described in
Section 12, Pledgors agree, jointly and severally, to
indemnify and hold harmless Secured Party and each of Secured
Party's directors, officers, employees and agents from and
against any loss, fee, cost, expense, damage, liability or
claim, joint or several, to which Secured Party or such other
persons may become subject or for which any of them may be
liable, under the Securities Act or otherwise, insofar as such
losses, fees, costs, expenses, damages, liabilities or claims
(or any litigation commenced or threatened in respect thereof)
arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any
preliminary prospectus, registration statement, prospectus or
other such document published or filed in connection with such
public sale, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
will reimburse Secured Party and such other persons for any
legal or other expenses reasonably incurred by Secured Party
and such other persons in connection with any litigation, of
any nature whatsoever, commenced or threatened in respect
thereof (including without limitation any and all fees, costs
and expenses whatsoever reasonably incurred by Secured Party
and such other persons and counsel for Secured Party and such
other persons in investigating, preparing for, defending
against or providing evidence, producing documents or taking
any other action in respect of, any such commenced or
threatened litigation or any claims asserted). This indemnity
shall be in addition to any liability which any Pledgor may
otherwise have and shall extend upon the same terms and
conditions to each person, if any, that controls Secured Party
or such persons within the meaning of the Securities Act.
SECTION 15. Continuing Security Interest; Transfer
of Loans. This Agreement shall create a continuing security
interest in the Pledged Collateral and shall (a) remain in
full force and effect until the indefeasible payment in full
of all Secured Obligations, the cancellation or termination of
the Commitments and the cancellation or expiration of all
outstanding Letters of Credit, (b) be binding upon each
Pledgor, its successors and assigns, and (c) inure, together
with the rights and remedies of Secured Party hereunder, to
the benefit of Secured Party and its successors, transferees
and assigns. Without limiting the generality of the foregoing
clause (c), but subject to the provisions of subsection 9.6 of
the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such
other Person shall thereupon become vested with all the
benefits in respect thereof granted to Lenders herein or
otherwise. Upon the indefeasible payment in full of all
Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all
outstanding Letters of Credit, the security interest granted
hereby shall terminate and all rights to the Pledged
Collateral shall revert to Pledgors. Upon any such
termination Secured Party will, at Pledgors' expense, execute
and deliver to the applicable Pledgor such documents as such
Pledgor shall reasonably request to evidence such termination
and Pledgors shall be entitled to the return, upon their
request and at their expense, against receipt and without
recourse to Secured Party, of such of the Pledged Collateral
as shall not have been sold or otherwise applied pursuant to
the terms hereof.
SECTION 16. Secured Party as Agent.
(a) Secured Party has been appointed to act as
Secured Party hereunder by Lenders. Secured Party shall be
obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any
action (including, without limitation, the release or
substitution of Pledged Collateral), solely in accordance with
this Agreement and the DIP Credit Agreement.
(b) Secured Party shall at all times be the same
Person that is Agent under the Credit Agreement. Notice of
resignation by Agent pursuant to subsection 8.9 of the DIP
Credit Agreement shall also constitute notice of resignation
as Secured Party under this Agreement and appointment of a
successor Agent pursuant to subsection 8.9 of the DIP Credit
Agreement shall also constitute appointment of a successor
Secured Party under this Agreement. Upon the acceptance of
any appointment as Agent under subsection 8.9 of the DIP
Credit Agreement by a successor Agent, that successor Agent
shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or
removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly
(i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder,
together with all records and other documents necessary or
appropriate in connection with the performance of the duties
of the successor Secured Party under this Agreement, and
(ii) execute and deliver to such successor Secured Party such
amendments to financing statements, and take such other
actions, as may be necessary or appropriate in connection with
the assignment to such successor Secured Party of the security
interests created hereunder, whereupon such retiring or
removed Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured
Party, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it
under this Agreement while it was Secured Party hereunder.
SECTION 17. Amendments; Etc. No amendment,
modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by any Pledgor
therefrom, shall in any event be effective unless the same
shall be in writing and signed by Secured Party and, in the
case of any such amendment or modification, by such Pledgor.
Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it
was given.
SECTION 18. Notices. Any notice or other
communication herein required or permitted to be given shall
be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or
by courier service, upon receipt of telefacsimile or telex, or
three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed. For the
purposes hereof, the address of each party hereto shall be as
set forth under such party's name on the signature pages
hereof or, as to either party, such other address as shall be
designated by such party in a written notice delivered to the
other party hereto.
SECTION 19. Failure or Indulgence Not Waiver;
Remedies Cumulative. No failure or delay on the part of
Secured Party in the exercise of any power, right or privilege
hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such
power, right or privilege preclude any other or further
exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies
otherwise available.
SECTION 20. Severability. In case any provision in
or obligation under this Agreement shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations,
or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
SECTION 21. Headings. Section and subsection
headings in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive
effect.
SECTION 22. Governing Law; Terms. THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE
CODE PROVIDES THAT THE VALIDITY OR PERFECTION OF THE SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless
otherwise defined herein or in the Credit Agreement, terms
used in Articles 8 and 9 of the Uniform Commercial Code in the
State of New York are used herein as therein defined.
SECTION 23. Consent to Jurisdiction and Service of
Process. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT EACH PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEX-
CLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT. Each Pledgor hereby agrees that service of all
process in any such proceeding in any such court may be made
by registered or certified mail, return receipt requested, to
such Pledgor at its address provided in Section 18, such
service being hereby acknowledged by such Pledgor to be
sufficient for personal jurisdiction in any action against
such Pledgor in any such court and to be otherwise effective
and binding service in every respect. Nothing herein shall
affect the right to serve process in any other manner
permitted by law or shall limit the right of Secured Party to
bring proceedings against such Pledgor in the courts of any
other jurisdiction.
SECTION 24. Waiver of Jury Trial. EACH PLEDGOR AND
SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that
may be filed in any court and that relate to the subject
matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Each Pledgor and
Secured Party each acknowledge that this waiver is a material
inducement for each Pledgor and Secured Party to enter into a
business relationship, that each Pledgor and Secured Party
have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver
in their related future dealings. Each Pledgor and Secured
Party further warrant and represent that each has reviewed
this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court.
SECTION 25. Counterparts. This Agreement may be
executed in one or more counterparts and by different parties
hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, Pledgor and Secured Party have
caused this Agreement to be duly executed and delivered by
their respective officers thereunto duly authorized as of the
date first written above.
[NAME OF PLEDGOR]
By: __________________________
Name:
Title:
Notice Address: _____________________
_____________________
_____________________
Telecopy:____________
CHEMICAL BANK
By: __________________________
Name:
Title:
Notice Address: _____________________
_____________________
_____________________
Telecopy:____________
SCHEDULE I
Attached to and forming a part of the Pledge
Agreement dated as of _____________, 1995 between
_______________, as Pledgor, and Chemical Bank, as Secured
Party.
Part A
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
Part B
Debt Issuer Amount of Indebtedness
SCHEDULE II
Attached to and forming a part of the Pledge
Agreement dated as of _____________, 1995 between
_______________, as Pledgor, and Chemical Bank, as Secured
Party.
Percentage
Number of Represented Holders
Shares Issued by Pledged of Shares
Stock Issuer and Outstanding Shares Not Pledged
SCHEDULE III
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________, 19__, is
delivered pursuant to Section 6(b) of the Pledge Agreement
referred to below. The undersigned hereby agrees that this
Pledge Amendment may be attached to the Pledge Agreement dated
__________, 1995, between the undersigned and Chemical Bank,
as Secured Party (the "Pledge Agreement," capitalized terms
defined therein being used herein as therein defined), and
that the [Pledged Shares] [Pledged Debt] listed on this Pledge
Amendment shall be deemed to be part of the [Pledged Shares]
[Pledged Debt] and shall become part of the Pledged Collateral
and shall secure all Secured Obligations.
[NAME OF PLEDGOR]
By: ___________________________
Title:
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
Debt Issuer Amount of Indebtedness
EXHIBIT M
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected [Title] of XXXXX XXXXXX
CORPORATION, a Delaware corporation (``Borrower'');
(2) We have reviewed the terms of that certain Debtor-
in-Possession Credit Agreement dated as of July 10, 1995, as
amended, supplemented or otherwise modified to the date hereof
(said Credit Agreement, as so amended, supplemented or
otherwise modified, being the ``Credit Agreement'', the terms
defined therein and not otherwise defined in this Certificate
(including Attachment No. 1 annexed hereto and made a part
hereof) being used in this Certificate as therein defined),
among Borrower, as debtor and debtor-in-possession and the
lenders party thereto and Chemical Bank, as agent, and the
terms of the other Loan Documents, and we have made, or have
caused to be made under our supervision, a review in
reasonable detail of the transactions and condition of Borrowers
during the accounting period covered by the attached financial
statements; and
(3) The examination described in paragraph (2) above did
not disclose, and we have no knowledge of, the existence of
any condition or event which constitutes any Default or Event
of Default during or at the end of the accounting period
covered by the attached financial statements or as of the date
of this Certificate[, except as set forth below].
[Set forth [below] [in a separate attachment to this
Certificate] are all exceptions to paragraph (3) above listing, in detail,
the nature of the condition or event, the period during which it
has existed and the action which Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:
]
The foregoing certifications, together with the computations
set forth in Attachment No. 1 annexed hereto and made a part hereof
and the financial statements delivered with this Certificate in
support hereof, are made and delivered this __________ day of
_____________, 199_ pursuant to subsection 5.1(ii) of the Credit
Agreement.
XXXXX CORONA CORPORATION,
as Debtor and Debtor-in-Possession
By:
Name:
Title:
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a
Compliance Certificate dated as of ____________, 199_ and pertains
to the period from ____________, 199_ to ____________, 199_.
Subsection references herein relate to subsections of the Credit
Agreement.
A. Maximum Inventory
1. Aggregate Inventory as of _____________, 199__
$__________
2. Maximum Inventory permitted pursuant to subsec-
tion 6.1(a): $__________
B. Maximum Cash Disbursements
1. Cash disbursements for month ended , 199__
$__________
2. Maximum cash disbursements permitted pursuant to subsec-
tion 6.1(b): $_________
