Exhibit 10.5
FOURTH AMENDMENT
FOURTH AMENDMENT, dated as of March 20, 1998 (this "Amendment"), to the
Credit end Guarantee Agreement, dated as of May 23, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among:
(a) REMINGTON PRODUCTS COMPANY, L.L.C., a Delaware limited liability
company (the "Company");
(b) REMINGTON CONSUMER PRODUCTS LIMITED, a corporation organized and
existing under the laws of the United Kingdom (the "UK Borrower");
(c) each Acquisition Subsidiary from time to time party thereto (together
with the Company and the UK Borrower, the "Borrowers");
(d) the Lenders from time to time parties to the Agreement including the
Issuing Bank;
(e) FLEET NATIONAL BANK and BANQUE NATIONALE DE PARIS, as Co-
Documentation Agents (in such capacity, the "Co Documentation
Agents"); and
(f) THE CHASE MANHATTAN BANK (formally known as CHEMICAL BANK), a New York
banking corporation, as administrative agent (in such capacity, the
"agent") for the Lenders hereunder.
W I T N E S S E T H
WHEREAS, the Borrowers, the Lenders and the Agent are parties to
the Credit Agreement;
WHEREAS, the Borrowers have requested that the Agent and the
Lenders agree to amend certain provisions of the Credit Agreement in and with
the terms hereof;
WHEREAS, the Agent, the Lenders and The Chase Manhattan Bank (as
Issuing Lender) are willing to amend such provisions of the Credit Agreement,
but only upon the terms and subject to the conditions set forth herein;
NOW THEREFORE, in consideration of the premises contained herein,
the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized
terms which are used herein shall have the meanings assigned thereto in the
Credit Agreement.
2. Amendment of Subsection 1.1. Subsection l.1 of the Credit
Agreement hereby is amended by (a) deleting tberefrom in their entireties the
definitions of the terms "Domestic Borrowing Base" and "UK Borrowing Base"
contained thereto (b) inserting therein in proper alphabetical order the
following new definitions:
"Domestic Borrowing Base": as of any date of determination an amount
equal to the sum, without duplication of (a) 85%. of the total of
Eligible Domestic Accounts of the Company and in Domestic Subsidiaries
as of such date less the Domestic Dilution Reserve then in effect, (b)
60% of the Eligible Domestic Inventory of the Company and its Domestic
Subsidiaries as of such date and (c) during any Overadvance Period,
$10,000,000 minus any Seasonal Overadvance Utilization then in effect.
For purposes of determining the Domestic Borrowing Base from time to
time, Eligible Domestic Accounts and Eligible Domestic Accounts of the
Company and its Domestic Subsidiaries shall be determined from time to
time by the Agent by reference to the Domestic Borrowing Base
Certificate then most recently delivered to it; provided that the
information contained in such Domestic Borrowing Base Certificate
shall not be conclusive in calculating the amount of Eligible Domestic
Accounts and Eligible Domestic Inventory and, after consultation with
the Company, the Agent shall be entitled to adjust the amounts and
other information contained therein to the extent that it believes in
its reasonable credit judgment that such adjustment is appropriate to
reflect (x) the then current amount of Eligible Domestic Accounts and
Eligible Domestic Accounts or (y) changes in the business practices of
the Company and its Domestic Subsidiaries (or newly disclosed matters
with respect to them).
"Lock Box Agreement" shall mean a Lock Box Agreement among the
Company or a Subsidiary, the Agent and a Lock Box Bank (as defined
therein; .provided that each Lock Box Bank shall be a Bank party to
this agreement), substantially in the form of Exhibit G hereto (with
such changes therein as shall (x) in the case of any lock Box Agreement
with the UK Borrower or any of its Subsidiaries, be appropriate in
accordance with customary practice in the United Kingdom and (y) in any
case, be negotiated by the Agent and the respective Lock Box Bank), as
the same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof and of this Agreement.
"Overadvance Period" shall mean the period from April 1, 1998
through June 30, 1999; provided that, in the reasonable judgment of the
Required Lenders, the Company is proceeding in good faith to enhance
its option in order to achieve an Interest Coverage Ratio of 1.35 to
1.0.
"UK Borrowing Base": as of any date of determination, an
amount equal to the Sum, without duplication of (a) 85% of the total of
Eligible UK Accounts of the UK Borrower as of such date less the UK
Dilution Reserve then in effect, (b) 60% of the Eligible UK Inventory
of the UK Borrower and (c) during any Overadvance Period, the pounds
Sterling equivalent of $10,000,000 minus any Seasonal Overadvance
Utilization then in effect. For purposes of determining the UK
Borrowing Base from time to time, Eligible UK Accounts ant Eligible UK
Inventory of the UK Borrower shall be determined from time to time by
the Agent by reference to the UK Borrowing Base Certificate then most
recently delivered to it; provided that the information contained in UK
Borrowing Base Certificate shall not be conclusive in calculating the
amount of Eligible UK Accounts and Eligible UK Inventory and, after
consultation with the Company, the Agent shall be entitled to adjust
the amounts and other information contained therein and/or the advance
rates set forth above to the extent that it believes in its reasonable
credit judgment that such adjustment is appropriate to reflect (x) the
then current amounts of Eligible UK Inventory and Eligible UK Accounts
or (y) changes in the business practices
of the UK Borrower (or newly disclosed matters with respect to it).
3. Amendment of Subsection 10.7. Subsection 10.7 of the Credit
Agreement hereby is amended by inserting therein as a new clause (d} thereof the
following:
(d) The Company agrees to pay to the Agent for the account of
each Lender, an overadvance fee for each day upon which there is any
Seasonal Overadvance Utilization in effect in the amount equal to 1/4
of 1% per annum on the then outstanding amount of such Lender's
Domestic Revolving Credit Exposure, UK Revolving Credit Exposure,
Domestic Terms Loans and UK Term Loans. Such overadvance fee shall be
payable quarterly, in arrears on the last day of each March, June,
September and December to occur after the date of the occurrence of any
Seasonal Overadvance Utilization. Such overadvance fee shall be payable
for the period from April 1, 1998 until June 30, 1999.
4. Amendment of Subsection 11.21. Subsection 11.21 of the Credit
Agreement hereby is amended by inserting therein as new clause (d) thereof the
following:
(f) Each Lock-Box Agreement is effective to create in favor of
the Agent, for the ratable benefit of the Agent and the Lenders, a
perfected first Lien on, and security interest in, all right, title and
interest of the Company or its Subsidiary (as the case may be) party
thereto in the proceeds of accounts receivable and in all other monies
received in any lock box established pursuant to any Lock Box
Agreement. The Company and each of its Subsidiaries has notified the
account debtors in respect of each Account to make all payments in
respect of such Accounts through the lock boxes established pursuant to
the Lock Box Agreement. Notwithstanding the foregoing, the
representations and warranties contained in this subsection 11.21(d)
shall be made by the Company only from and after March 31, 1998.
5. Amendment of Section 10. Section 10 of the Credit Agreement
hereby is amended by inserting therein as new subsection 10.15 thereof the
following:
10.15 Lock Box Accounts. Any amounts received from
time to time in the Lock Box Account (as defined in the Lock Box
Agreements) or otherwise paid in accordance with the requirements of
subsection 14.21 shall be applied:
(a) in the case of amounts owing to the Company and
its Domestic Subsidiaries, to repay, first, any then
outstanding Domestic Swing Line Loans, second , any then
outstanding Domestic Revolving Credit Loans, third, to cash
collateralize any then outstanding Domestic Letters of Credit
and, fourth, to prepay any then outstanding Domestic Term
Loans; and
(b) in the case of other amounts, to repay, first,
any then outstanding UK Swing Line Loans, second, any then
outstanding UK Revolving Credit Loans and, third, to cash
collateralize any then outstanding UK Letters of Credit.
The Company hereby acknowledges and agrees that all fees and expenses
incurred by the Agent, any Lender or the Company with regard to a Lock
Box Agreement, the lock boxes established pursuant thereto and any
concentration accounts established in connection therewith shall be
the obligation of the Company.
6. Amendment of Subsection 13.4. Subsection 13.4 of the Credit
Agreement hereby is amended by:
(a) deleting from clause (e) thereof the phrase "concurrently with any
delivery of any such financial statements" and by substituting
therefor the phrase "concurrently with any delivery of any such
financial statements contemplated by clauses (a) through (d) hereof";
and
(b) deleting therefrom in its entirety clause (j) thereof and substituting
therefor the following:
(j) on each "delivery date" for the relevant "reporting
date," deliver to the Administrative Agent for each of a Domestic
Borrowing Base Certificate and a UK Borrowing Base Certificate
(and any applicable supporting documentation described in
Schedule XIV) setting forth the Domestic Borrowing Base or the UK
Borrowing Base, as the case may be, as of the relevant reporting
date, duly completed and signed by a Responsible Officer of the
Company (in his or her capacity as such); for purposes of this
clause (j), the term:
(x) "reporting date" shall mean each of (I) the last
day of each calendar month, (ii) the fifteenth day of each
of each calendar month during the period from September of
1998 through January 1999, (iii) the fifteenth day of each
calendar month during the period from September 1999 through
January 2000 and (iv) any other time when the Agent notifies
the Company that it reasonably believes that the then
existing Domestic Borrowing Base or UK Borrowing Base (as
the case may be) is materially inaccurate; and
(y) "delivery date" shall mean fifteen days after the
corresponding reporting date (or, to the extent that the
relevant Borrowing Base Certificate is being delivered
pursuant to clause (x)(iii) above, ten days after the date
upon which the notice described therein is delivered);
; provided that, for purposes of completing any Borrowing
Base Certificates delivered pursuant to clause (x)(ii) or
(xx)(iii) above. the relevant Borrowing Base shall be calculated
based upon a reasonable, good faith estimate by the Company of
its Eligible Domestic Inventory and Eligible Domestic Accounts or
the UK Borrower of its Eligible UK Inventory and Eligible UK
Accounts (as the case may be) on the relevant reporting date;
(c) inserting therein as new clauses (m) and (n) the following:
(m) as soon as available. and in any event not later than 30
days after the end of each month occurring during each fiscal
year (other than the third, sixth, ninth and twelfth such month)
the unaudited consolidated balance sheets of the Company and its
consolidated Subsidiaries as at the end of such month and the
related unaudited consolidated statements of income and of cash
flows for such month and the portion of the fiscal year through
the end of such month, setting forth in each case in comparative
form the figures for the previous year, accompanied by a
certificate of a Responsible Officer certifying that (I) such
financial statements are fairly stated in all material respects
(subject to normal year-end audit adjustments) and (ii) such
Responsible Officer has no actual knowledge of the occurrence of
any Event of Default or Default, or if s/he has knowledge of any
Event of Default or Default, specifying the nature and extent
thereof any corrective action taken or proposed to be taken with
respect thereto; and
(n) as soon as available, and in any event not later than 30
days after the end of each month occurring during each fiscal
year (other than the third, sixth, ninth and twelfth such month),
the unaudited consolidated balance sheets of the UK Borrower and
its consolidated Subsidiaries as at the end of such month and the
related unaudited consolidated shots of income and of cash flows
for such month and the portion of the fiscal year through the end
of such month, setting forth in each case in comparative form the
figures for the previous year, accompanied by a certificate of a
Responsible Officer certifying that (I) such financial statements
are fairly stated in all material respects (subject to normal
year-end audit adjustments) and (ii) such Responsible Officer has
no actual knowledge of the occurrence of any Event of Default or
Default or, if s/he has knowledge of any Event of Default or
Default, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect
thereto.
7. Amendment of Subsection 14.12. Subsection 14. 12 of the Credit
Agreement hereby is amended by deleting therefrom clause (b) and by substituting
therefor the following:
(b) not more than $1,500,000 of such Capital Lease Obligations at any
one time outstanding shall, at the time of its incurrence, have an
average life to maturity which is shorter than the average life to
maturity of the Domestic Term Loans outstanding at such time and
8. Amendment of Subsection 14.14. Subsection 14.14 of the Credit
Agreement is amended by deleting therefrom the dates set forth under the heading
"Period" and the ratios set forth under the heading "Ratio" contained therein
and by substituting therefor the following:
Period Ratio
03/31/99 - 06/30/99 1.00 to 1.0
07/01/99 - thereafter 1.05 to 1.0
9. Amendment of Subsection 14.15. Subsection 14.15 of the Credit
Agreement hereby is amended by deleting therefrom the dates set forth under the
heading "Period" and the ratios set forth under the heading "Ratios" contained
therein and by substituting therefor the following:
Period Ratio
Closing Date - 12/31/98 1.00 to 1.0
01/01/99 - 06/30/00 1.60 to 1.0
07/01/00 - 06/30/01 1.70 to 1.0
07/01/01 - 12/31/01 1.80 to 1.0
01/01/02 - thereafter 2.00 to 1.0
10. Amendment of Subsection 14.16(a). Subsection 14.16(a) of the
Credit Agreement hereby is amended by deleting therefrom the dates set form
under the heading "Period" and the ratios set forth under the heading "Ratio"
contained therein and by substituting therefor the following:
Period Ratio
01/01/99 - 06/30/99 5.5 to 1.0
07/01/99 - 0630/00 5.0 to 1.0
07/01/00 - 06/30/01 4.5 to 1.0
07/01/01 - thereafter 4.0 to 1.0
11. Amendment of Section 14. Section 14 of the Credit Agreement
hereby is amended by inserting therein as new subsections 14.16(b), 14.21 and
14.22 the following:
14.16(b) Senior Leverage Ratio. Permit the Senior Leverage Ratio
for the period of four consecutive fiscal quarters ending on the last
day of any fiscal quarter ending during any period set forth below
(commencing with the period ending March 31, 1998) to be in excess of
the ratio set for opposite such period:
Period Ratio
01/01/98 - 03/31/98 2.8 to 1.0
04/01/98 - 09/30/98 2.9 to 1.0
10/01/98 - 06/30/99 3.2 to 1.0
14.21 Payments in Respect of Account. The Company shall not, nor
shall it permit any of its Subsidiaries organized under the laws of
the United States or the United Kingdom to, instruct or otherwise
permit any Person obligated under any of the Accounts (as defined in
the Security Agreements) to remit any payment (whether by check, wire
transfer or otherwise) to any account other than a Lock Box Account
(as defined in the Lock Box Agreement) established by the Agent
pursuant to a Lock Box Agreement, other than, in the case of amounts
owed to the UK Borrower and its Subsidiaries, payments which are made
through an alternate means which (in the reasonable judgement of the
Agent) (a) enables the Agent to maintain a perfected, first priority
security interest in such payments and the proceeds thereof and (b)
provides for the application of such proceeds in the same manner as
payments deposited in a Lock BOX Account. The Company hereby agrees
that it shall not, and shall not permit any of its Subsidiaries to,
cause or permit any amounts which are not Collateral to be deposited
in the Lock Box Account (as defined in the Lock Box Agreement).
14.22 Bank Accounts. The Company shall not nor shall it permit
any of its Subsidiaries to, establish or maintain, or permit to be
established or maintained, any bank accounts in the name of, or for
the benefit of, the Company or any of its Domestic Subsidiaries, other
than (x) bank accounts establishes or maintained with a Bank, (y)
other bank accounts containing operating funds required to cover
substantially immediate payment obligations (including, without
limitation, payroll obligations) and (z) other operating bank accounts
which are debited on a daily basis so that they do not contain any
material overnight deposits.
12. Amendment of Exhibits. The Credit Agreement hereby is amended
by inserting therein as new Exhibit G thereof the form of Lock Box Agreement
which is attached hereto as Exhibit A.
13. Acknowledgment. The Company hereby acknowledges and agrees
that, without limiting the provisions of subsection 13.7(b) of the Credit
Agreement:
(a) the Agent intends to conduct (or to cause to be conducted) an audit
and/or collateral examination of the Accounts and Inventory of the
Company and its Subsidiaries, and of the Domestic Borrowing Base and
UK Borrowing Base, not less frequently than twice per annum; and
(b) the Agent intends to conduct (or to cause to be conduced) an appraisal
of the inventory of the Company and its Domestic Subsidiaries [and of
the UK Borrower and its Subsidiaries]
The Company hereby (x) covenants and agrees to cooperate, and to cause its
Subsidiaries to cooperate, fully with the Agent and its agents in the conduct of
such audits, collateral examinations and appraisals and (y) acknowledges and
agrees that the reasonable costs and expenses of the Agent and its agents in
connection with such audits, collateral examinations and appraisals shall be for
the account of the Company.
14. Conditions to Effectiveness. This Amendment shall become
effective on the date upon which the Agent receives (a) counterparts hereof,
executed and delivered by a duly authorized officer of each Borrower and the
Required Lenders and (b) an amendment fee, for ratable account of the Lenders
which execute and deliver this Amendment on or prior to March 20, 1998, in the
amount equal to 1/4 of 1% of the amount of the Domestic Revolving Credit
Commitments then then in effect, the UK Revolving Credit Commitments then in
effect and the aggregate then outstanding principal amount of the Domestic Term
Loans and the UK Term Loans.
15. Representations and Warranties. The Borrowers hereby confirm,
reaffirm and restate the representations and warranties set forth in Section 6
of the Credit Agreement; provided that each reference to the Credit Agreement
therein shall be deemed to be a reference to the Credit Agreement giving effect
to this Amendment. The Borrowers represent and warrant that no Default or Event
of Default has occurred and is continuing.
16. Continuing Effect of Credit Agreement. This Amendment shall
not constitute a waiver or amendment of any other provision of the Credit
Agreement not expressly referred to herein and shall not be construed as a
waiver or consent to any further or future action on the part of a Borrower that
would require a waiver or consent of the Agent or the Lenders. Except as
expressly amended hereby, the provisions of the Credit Agreement are and shall
remain in full force and effect.
17. Counterparts. This Amendment may be executed by the parties
hereto in any number of counterparts, and all of such counterparts taken
together shall be deemed to constitute one and the same instrument.
18. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed and delivered by their respective duly authorized offices as of
the date first above written.
REMINGTON PRODUCTS COMPANY, L.L.C.
/s/
By:-----------------------------
Title:
REMINGTON CONSUMER PRODUCTS
LIMITED
/s/
By:-----------------------------
Title
THE CHASE MANHATTAN BANK,
as Administrative Agent, as
a Lender and as (or on
behalf of) the Issuing
Bank.
/s/
By: ----------------------------
Title:
BANQUE NATIONALE DE PARIS, as a Co-
Documentation Agent and as a Lender
/s/
By:------------------------------
Title:
FLEET NATIONAL BANK, as a Co-
Documentation Agent and as a Lender
/s/
By:-----------------------------
Title:
CORESTATES BANK, N.A.
/s/
By:----------------------------
Title:
THE FIRST NATIONAL BANK OF BOSTON
/s/
By:----------------------------
Title:
FIRST UNION BANK OF CONNECTICUT
By:-----------------------------
Title:
XXXXXX FINANCIAL, INC.
/s/
By:-----------------------------
Title:
PEOPLE'S BANK
/s/
By:-----------------------------
Title:
PNC BANK, NATIONAL ASSOCIATION
/s/
By:-------------------------------
Title:
THE PROVIDENT BANK
/s/
By:------------------------------
Title:
EXHIBIT A
to
FOURTH AMENDMENT
EXHIBIT G to
Credit Agreement
FORM OF
LOCK BOX AGREEMENT
LOCK BOX AGREEMENT, dated as of March _, 1998, among [ ], as
lock box bank (in such capacity, the "Lock Box Bank"), [______________} (the
"Grantor") and THE CHASE MANHATTAN BANK, as administrative agent (in such
capacity, the "Agent) pursuant to the Credit and Guarantee Agreement, dated as
of May 23, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement), among the Borrowers named therein, the banks and
other financial institutions parties thereto (the "Lenders"), the
Co-documentation Agents named therein and the Agent.
For good and valid consideration, the receipt of which hereby
is acknowledged, the parties hereto hereby agree as follows:
1. (a) The Lock Box Bank has rented Post Office Box [ ] (the
"Post Office Box) into which the Grantor has directed and shalt direct debtors
in respect of the Accounts (as defined in the Security Agreement) to mail
payments in respect of the Accounts (unless such debtors are to make payment
directly into the Lock Box Account described below or into the relevant
concentration account described in paragraph 4 below by wire transfer of
immediately available fiends). The Lock Box Bank shall instruct the Agent and
the Grantor how mail intended for the Lock Box Account should be addressed. The
Lock Box Bank shall have exclusive access to the Post Office Box ant shall
collect the mail delivered to such Post Office Box (even though addressed to the
Grantor or to the Agent) on each business day in accordance with the Lock Box
Banks regular collection schedule. For hereof, the term "Security Agreement"
shall mean the Security Agreement dated as of May 23, 1996, made by the Grantor
in favor of the Agent, as the same may be amended, supplemented or otherwise
modified from time to time.
(b) The Lock Box Bank has opened a bank account in the name of
the Grantor entitled the "Remington Products Company LLC Lock Box Account for
the benefit of The Chase Manhattan Bank, as Agent" (Account No._____________)
(the "Lock Box Account") Nothing shall be deposited in the Lock Box Account
other than amounts constituting proceeds of Collateral (as defined in the
Security Agreement) in which the Agent has a security interest pursuant to the
Security Agreement.
(c) The Grantor hereby grants to the Agent a first priority
security interest in all items received in the Post Office Box and in all
amounts on deposit in the Lock Box Account. The Grantor and the Lock Box Bank
hereby acknowledge and agree that the Lock Box Bank holds all amounts on deposit
in the Lock Box Account, and constitutes a bailee in possession thereof, for the
benefit of the Agent.
2.(a) The Lock Box Bank shall have unrestricted and exclusive
access to the Post Office Box for the purpose of collecting mail for delivery
and deposit into the Lock Box Account. The Lock Box Bank shall remove the
contents of the Post Office Box periodically (and, in any event on each Business
Day) in accordance with the Lock Box Bank's schedule of calls to this postal
station.
(b) The Lock Box Account shall be under the sole dominion and
control of the Agent, which shall be exercised in accordance with this Lock Box
Agreement. Neither the Grantor nor any other Personal claiming by, through or
under the Grantor shall have any control over the use of, or any right to
withdraw any amount from, the Lock Box Account, provided that the Lock Box Bank
shall withdraw funds from the Lock Box Account and make such funds available to
the Agent as provided in this Lock Box Agreement. The Lock Box Bank shall be
entitled to rely on, and shall act in accordance with, all instructions given to
it by the Agent with respect to the Lock Box Account, which instructions the
Agent will give only in accordance wit this Lock Box Agreement.
(c) Except as expressly set forth herein, and without in any way
derogating from the Agent's sole dominion and control of the Lock Box Account,
the Grantor has the right to instruct the Lock Box Bank with respect to matters
(other than with respect to the matters set forth in the next succeeding
sentence) relating to the operation and administration of the Lock Box Account;
provided that upon the occurrence and during the continuance of any Event of
Default (as defined in the Credit Agreement) the Agent shall have the right to
notify the Lock Box Bank that an Event of Default has occurred, in which case
the Agent shall thereafter have the exclusive right to so instruct the Lock Box
Bank unless the Agent notifies the Lock Box Bank to the contrary. Such matters
with respect to which the Grantor has the exclusive right shall not include
matters relating to the collection of nay items in (or to the credit of) the
Lock Box Account and the withdrawal and use of proceeds thereof. The Lock Box
Bank may rely on all instructions given by the Grantor in accordance with this
paragraph 2(c) as fully as if such instructions were given by the Agent.
3(a) The contents of the mail colleted from the Post Office Box,
whether consisting of cash, checks, notes, drafts, bills of exchange, money
orders, commercial paper or other item of payment, shall be promptly deposited
by the Lock Box Bank into the Lock Box Account in accordance with the terms of
this Lock Box Agreement. The Lock Box Bank shall endorse all checks which appear
to be in order for deposit into the Lock Box Account and shall process each item
under the same terms and conditions as would apply if the Agent or the Grantor
had made the deposit directly. In endorsing the checks, the Lock Box Bank may
use the payee endorsement stamp.
(b) The Lock Box Bank shall make a photocopy of each check,
draft, note, xxxx of exchange, money order, commercial paper or other item of
payment (collectively, the "checks") deposited into the Lock Box Account, with
the date of deposit to be shown on the right-hand side and bottom edges.
Promptly after receipt thereof, such photocopies, together with (I) all
attachments received with payments, such as detachable stubs, (ii) any
correspondence and the individual envelope and (iii) all other materials
rejected for various reasons shall be sent by the Lock Box Bank to the Grantor
or , at any time after written notice by the Agent (which the Agent agrees only
to give after the occurrence and during the continuance of an Event of Default,
as defined in the Agreement), to the Agent; provided that the Lock Box
Bank shall send copies thereof to the Agent from time to time upon its request.
Checks returned unpaid because of uncollected or insufficient Funds shall be
redeposited without advice. Checks returned a second time shall be charged to
the Lock Box Account and mailed under appropriate advice to the Grantor or, at
any time after written notice by the Agent (which the Agent agrees only to give
after the occurrence and during the continuance of an Event of Default, as
defined in the Credit Agreement), to the Agent.
(c) The Lock Box Bank shall process in accordance with its usual
operating procedure all checks postdated up to seven days, and shall forward to
the Grantor for, upon a notice given in accordance with the penultimate sentence
of this paragraph, to the Agent) all checks postdated eight days or more.
Undated checks may be dated by the Lock Box Bank to agree with the postmark date
and included in the regular deposit. Checks incorrectly made out, where fill and
amount differ, are to be deposited for the written amount only. Checks bearing
no signature are to be returned with daily lock box detail. Third-party checks
may be deposited into the Lock Box Account if properly endorsed. Checks bearing
the legend "Payment in Full" or words of similar import, either typed or
handwritten, shall be withheld from the clearing system and sent to the Grantor
or, at any time after written notice by the Agent (which the Agent agrees only
to give after the occurrence and during the continuance of an Event of Default,
as defined in the Credit Agreement), to the Agent. Should such an item be
cleared, the Agent and the Grantor hereby agree that no liability shall accrue
to the Lock Box as a result of such actions.
(d) The Lock Box Bank shall maintain a microfilm record of each
check included in the Lock Box Account. This film shall be available for use by
the Agent, the Grantor or any Lender.
(e) The Lock Box Bank shall exercise due diligence in examining
all checks which are received and processed under this Agreement
4. (a) On each day as which both the branch office of the Lock
Box Bank at which the Lock Box Account is being maintained the offices of the
Agent located in New York City are open, the Lock Box Bank shall transfer (by
wire transfer of immediately available funds) all collected funds on deposit in
the Lock Box Account to the concentration account or accounts from time to time
notified to the Lock Box Bank by the Agent.
(b) Upon the request of the Agent at any time and from time to
time, the Lock Box Bank will notify the Agent (at __________________ or at such
other telephone number which the Agent may from time to time designated) of the
amounts deposited in the Lock Box Account on such day and of the amounts
transferred to the Agent in accordance with the provisions of this Section 4.
5. The Lock Box Bank waives, with respect to all of its existing
and future claims against the Grantor or any affiliate thereof, all existing and
future rights of set-off and banker's liens again the Lock Box Accounts and all
items (and proceeds thereof) that come into its possession in connection with
the Lock Box Account, provided that the Lock Box Bank retains the right to
charge any Lock Box Account (a) for all items deposited in such Lock Box Account
after the date hereof and subsequently returned to the Lock Box Bank unpaid and
(b) for all compensation and expense with respect to the Lock Box Account.
6. (a) This Lock Box Agreement is to become effective as of the
date hereof, and the Lock Box Bank shall be in a position to process remittances
on test date.
(b) This Lock Box Agreement may be terminated by any party upon
30 days' written notice to the other parties hereto. In the event that such
notice is given by any party, the Grantor shall, with the consent of the Agent
(which consent shall not be unreasonably withheld) designate an alternate lock
box bank; provided, however, that if the Grantor and the Agent are unable to
agree upon an alternate lock box bank prior to the termination date, the Agent
may designate any of the Lenders willing to serve as an alternate lock box bank
as such alternative lock box bank and such designation shall be to be acceptable
to the Grantor. Upon termination of this Agreement, the Lock Box Bank shall, at
the direction of the Agent, deliver all checks and other funds received by it to
( I) a lock box account governed by a Lock Box Agreement (as defined in the
Credit Agreement) maintained by the institution selected or deemed to be
selected by the Grantor and the Agent or (ii) one or more concentration accounts
maintained by the Agent. Until such checks and funds are so delivered, the Lock
Box Bank shall hold such checks and funds for the benefit of the Agent, which
shall have exclusive dominion and control over them.
7. The Grantor shall pay or reimburse the Lock Box Bank for its
reasonable and customary fees and its costs and expenses as Lock Box Bank as
shall be mutually agreed upon by the Grantor and the Lock Box Bank from time to
time.
8. (a) The Grantor agrees to pay, indemnify and hold the Lock Box
Bank harmless from any and any all liabilities, obligations, losses, damages.
penalties. actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including, without limitation, reasonable legal fees,
but not including income taxes) with respect to the performance of this Lock Box
Agreement in accordance with its terms by the Lock Box Bank's directors,
officers, agents or employees, unless arising from its or their own gross
negligence or willful misconduct.
(b) The Lock Box Bank undertakes to perform only such duties as
are expressly set forth herein. Notwithstanding any other provision of this Lock
Box Agreement, it is agreed by the parties hereto that the Lock Box Bank shall
not be liable for any action taken by it or any of its directors, officers,
agents or employees in accordance with this Lock Box Agreement, except for its
or their own gross negligence or willful misconduct. In no event shall the Lock
Box Bank: be liable for losses or delays resulting from forces majeure, computer
malfunctions, interruption of communications facilities, labor difficulties or
other causes beyond the Lock Box Bank's reasonable control or for indirect,
special consequential damages.
9. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including telegraph,
telecopy or telex) and shall be deemed to have been duly given or made when
delivered by hand, or five days after being deposited in the United States mail,
postage prepaid, or, in the case of telegraphic notice, when delivered to the
telegraph company, or, in the case of telex notice, when sent, addressed as set
forth below under the signature of such party, or to such other address as may
be hereafter notified by the respective parties thereto.
10. THIS LOCK BOX AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the partied hereto have caused this Lock Box
Agreement to be duly executed and deliverer by their respective officers
thereunto duly authorized as of the date first above written.
[ ], as Lock Bank
By: ------------------------------
Title
Address: ---------------------------------
---------------------------------
Attention:------------------------
Telecopy: ------------------------
THE CHASE MANHATTAN BANK, as Agent
By: -------------------------------
Title
Address: -----------------------------------
-------------------------------------
Attention: ---------------------------
Telecopy: ----------------------------
[NAME OF GRANTOR]
By:----------------------------------
Title
Address: ------------------------------------
------------------------------------
Attention:--------------------------
Telecopy:---------------------------
