SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this
"Agreement") dated as of November 3, 1997, is made and
entered into by and among CITICORP NORTH AMERICA,
INC., as agent for the Issuing Bank and the Lenders (as
hereafter defined) (the "Agent"), LG ELECTRONICS INC., a
corporation organized under the laws of the Republic of Korea
(the "Subordinated Creditor"), and ZENITH ELECTRONICS
CORPORATION, a Delaware corporation (the "Borrower").
All capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Credit Agreement (as
defined below).
W I T N E S S E T H:
WHEREAS, the Borrower, the financial institutions
party thereto from time to time (the "Lenders"), Citibank, N.A.,
as Issuing Bank (the "Issuing Bank"), and Agent are parties to
that certain Credit Agreement dated as of March 31, 1997, as
amended by that certain First Amendment to Credit Agreement
dated as of October 29, 1997 (as amended, restated or otherwise
modified from time to time, the "Credit Agreement"); and
WHEREAS, the Obligations under the Credit Agreement
and the other Loan Documents are secured by the Lien of
Agent, for its benefit and the benefit of the Lenders and the
Issuing Bank, on the Collateral (together with any Liens that
may be granted to Agent, the Issuing Bank or any Lender from
time to time, the "Senior Lien"); and
WHEREAS, at the request of Borrower, Subordinated
Creditor has agreed to guarantee from time to time the
obligations of Borrower under the Additional Unsecured Debt as
more fully set forth in that certain Reimbursement Agreement by
and between Borrower and Subordinated Creditor dated
November 3, 1997 (as amended, restated or otherwise modified
from time to time, and together with each guaranty by
Subordinated Creditor of the Additional Unsecured Debt, the
"Reimbursement Agreement"); and
WHEREAS, Subordinated Creditor has requested that
Borrower grant to Subordinated Creditor a Lien on the Capital
Stock of Borrower's domestic Subsidiaries and on certain
Intellectual Property (other than the Tuning Patents, Tuning
Patent Royalties, and License Agreements), real estate and
Equipment located in the United States of the Borrower and its
Material Subsidiaries (the "Subordinated Creditor Collateral") to
secure the reimbursement obligations of the Borrower under the
Reimbursement Agreement (the Borrower's reimbursement
obligations under the Reimbursement Agreement, together with
all fees to be paid to Subordinated Creditor in connection with
the Reimbursement Agreement and all other amounts which may
from time to time be owing to Subordinated Creditor or any
affiliate of Subordinated Creditor in connection with the
Reimbursement Agreement, the Subordinated Lien, the
Subordinated Debt Documents or the Additional Unsecured
Debt are hereinafter collectively referred to as the "Subordinated
Debt"); and
WHEREAS, as an inducement and a condition precedent
to, and part of the consideration for, Agent's, the Issuing Bank's
and the Lenders' consent to the granting of the Subordinated
Lien and the creation of the Subordinated Debt, Subordinated
Creditor has agreed, among other things, subject to the terms
and provisions of this Agreement, (i) to subordinate the
Subordinated Debt to the Obligations at all times prior to the
Termination Date, (ii) to subordinate any Lien which
Subordinated Creditor has or may have in the future in the
Subordinated Creditor Collateral and any other assets or
property of Borrower or any Subsidiary of Borrower (the
"Subordinated Lien") to the Senior Lien and (iii) to forebear
from foreclosing upon any part of the Collateral or any other
security with respect to the Subordinated Debt or otherwise
exercising any creditor's remedy or taking any action against
Borrower upon any of its obligations to Subordinated Creditor
except as permitted hereby.
NOW, THEREFORE, in consideration of the foregoing
and the mutual covenants herein contained, and for other good
and valuable consideration, it is hereby agreed as follows:
1. Priority of Liens. Notwithstanding anything to the
contrary including without limitation the date, time, manner or
order of perfection or attachment of the security interests and
liens on the Collateral granted by Borrower to either of Agent or
Subordinated Creditor, and notwithstanding the usual
application of the priority provisions of the Uniform Commercial
Code as in effect in any jurisdiction or any other applicable law
or judicial decision of any jurisdiction, or whether Subordinated
Creditor holds possession of all or any part of the Collateral, or
if Agent or Subordinated Creditor is perfected without filing or
possession in any part of the Collateral, the Senior Lien shall be
a first, senior and prior security interest in and lien on the
Collateral, prior in interest and superior to the Subordinated
Lien.
2. Subordination of Subordinated Debt.
(a) As of the date hereof and until the Termination
Date, Subordinated Creditor subordinates any and all claims now
or hereafter owing to it by Borrower under the Subordinated
Debt to any and all claims of Agent, the Issuing Bank and the
Lenders under the Obligations (including, without limitation,
interest or other payments on the Obligations paid or accrued
after the commencement of an Insolvency Proceeding) (as
hereinafter defined), and payment of or for adequate protection
pursuant to any Insolvency Proceeding, and, except as set forth
in paragraph (b) below, agrees that all claims of the Lenders, the
Issuing Bank and Agent shall be paid in full in cash or otherwise
satisfied and the Commitments shall be terminated before any
payment may be made on the Subordinated Debt, whether of
principal or interest or other Indebtedness.
(b) Except as set forth below in this paragraph (b),
Subordinated Creditor agrees not to accept any payment of the
Subordinated Debt nor make any transfer to third parties not
party to this Agreement or take any other action designed to
secure directly or indirectly from Borrower or any other Person
any payment on account of the Subordinated Debt, without the
express, prior written consent of Agent, and, except as set forth
below in this paragraph (b), Subordinated Creditor agrees to pay
over to Agent any funds that may be received by it from
Borrower as a payment on account of the Subordinated Debt at
any time prior to the Termination Date. Subordinated Creditor
further agrees not to sell, assign, transfer or endorse any
Subordinated Debt or Subordinated Lien to anyone except
subject to the terms and conditions of this Agreement.
Notwithstanding anything contained herein to the contrary, (i)
provided no Default or Event of Default then exists or would be
caused thereby, Borrower may (x) make payments of the
Additional Unsecured Debt to the holders thereof, and (y) pay
and Subordinated Creditor may receive payments of fees in
connection with the Reimbursement Agreement to the extent
permitted by Section 7.6 of the Credit Agreement and (ii) in any
Insolvency Proceeding, Subordinated Creditor shall be entitled
to receive and retain its share of any payment, security or other
distribution payable to a class of unsecured creditors on account
of any portion of the Subordinated Debt that is determined to be
an unsecured deficiency claim or by way of subrogation to the
Additional Unsecured Debt.
(c) Subordinated Creditor agrees that the priority of
the Obligations set forth above shall continue during any
insolvency, receivership, bankruptcy, dissolution, liquidation, or
reorganization proceeding, or in any other proceeding, whether
voluntary or involuntary, by or against Borrower, under any
bankruptcy or insolvency law or laws, federal or state relating to
the relief of debtors of any jurisdiction, whether now or hereafter
in effect, and in any out-of-court composition, assignment for
the benefit of any creditor, readjustment of indebtedness,
reorganization, extension or other debt arrangement of any kind
(collectively, "Insolvency Proceeding"). In the event of any
payment, distribution, division or application, partial or
complete, voluntary or involuntary, by operation of law or
otherwise, of all or any part of the property, assets or business of
Borrower, or the proceeds thereof, or any securities of
Borrower, to Subordinated Creditor, by reason of any
liquidation, dissolution or other winding up of Borrower or its
business or by reason of any sale or Insolvency Proceeding, then
any such payment or distribution of any kind or character,
whether in cash, property or securities, which, but for the
subordination provisions of this Section 2, would otherwise be
payable or deliverable upon or in respect of the Subordinated
Debt, shall instead be paid over or delivered directly to Agent,
for application to the payment of the Obligations, to the extent
necessary to make payment of the Obligations remaining unpaid
after giving effect to any concurrent payment or distribution to
Agent, and Subordinated Creditor shall not receive any such
payment or distribution or any benefit therefrom to such extent
until after the Termination Date.
(d) Subject to the provisions of this Agreement,
Agent shall have the sole right to control all aspects of
liquidation of the Collateral and disposition of the proceeds
thereof, including all proceedings pertaining thereto under any
Insolvency Proceeding and the approval of any plan of
reorganization of Borrower thereunder.
3. Negative Covenants. For so long as this
Agreement is in effect, and except as expressly permitted hereby,
(i) Borrower shall not directly or indirectly, make any payment
(other than a payment permitted by paragraph 2(b) hereof and
other than the Lien on the Subordinated Creditor Collateral) on
account of or grant a security interest in, mortgage, pledge,
assign or transfer any properties to secure or satisfy all or any
part of the Subordinated Debt; (ii) Subordinated Creditor shall
not demand, collect or accept from Borrower or any other
Person any payment (other than a payment permitted by
paragraph 2(b) hereof and other than the Lien on the
Subordinated Creditor Collateral) or security on account of the
Subordinated Debt or any part thereof, or accelerate the
maturity of the Subordinated Debt; (iii) Subordinated Creditor
shall not exchange or set off any part of the Subordinated Debt;
(iv) Subordinated Creditor shall not hereafter give any
subordination in respect of the Subordinated Debt or transfer or
assign any of the Subordinated Debt or Subordinated Lien to any
Person other than Agent unless the transferee or assignee thereof
first agrees in writing with Agent to be bound by the terms of
this Agreement; (v) Borrower shall not hereafter issue any
instrument, security or other writing evidencing any part of the
Subordinated Debt, and Subordinated Creditor will not receive
any such writing, except upon the prior written approval of
Agent; (vi) Borrower and Subordinated Creditor shall not
amend, alter or modify any provision of the Reimbursement
Agreement or any document securing or evidencing Borrower's
reimbursement obligations under the Reimbursement Agreement
(collectively, the "Subordinated Debt Documents") without the
prior written consent of Agent; (vii) Subordinated Creditor shall
not commence or join with any other creditors of a Borrower in
commencing any bankruptcy, reorganization, receivership or
insolvency proceeding against Borrower; and (viii) neither
Borrower nor Subordinated Creditor shall otherwise take or
permit any action prejudicial to or inconsistent with Agent's
priority position over Subordinated Creditor that is created by
this Agreement.
4. Forbearance from Exercise of Certain Remedies.
Until the Termination Date and except as permitted in Section
2(b) hereof, Subordinated Creditor shall not (a) take any action
or exercise any remedy against Borrower to enforce the
Subordinated Debt (other than filing a proof of claim, voting on
a plan of reorganization in an Insolvency Proceeding, obtaining
adequate protection of the Subordinated Lien (which shall be
junior to any adequate protection of the Senior Lien) or other
actions necessary to preserve the Subordinated Debt and
Subordinated Lien in an Insolvency Proceeding and not
inconsistent with the provisions of this Agreement); or (b) take
any action or exercise any remedy against any guarantor of or
pledgor securing the Obligations in order to collect any of the
Subordinated Debt; or (c) take any action or exercise any
remedy against the Collateral as a result of any breach or default
under the Subordinated Debt; or (d) commence, or join with any
other creditor of Borrower in commencing, any bankruptcy,
reorganization or Insolvency Proceeding against Borrower; or
(e) take any action or exercise any remedy against any property
or assets of any guarantor of or pledgor securing the
Obligations; or (f) take any action or exercise any remedy with
respect to any securities, equity or otherwise, of Borrower
pledged to Subordinated Creditor. Subordinated Creditor
understands and agrees that Agent shall have the right, but shall
have no obligation, to cure any default under the Subordinated
Debt without the prior written consent of Subordinated
Creditor.
5. Duration and Termination. This Agreement shall
constitute a continuing agreement of subordination, and shall
remain in full force and effect until the earlier of (the
"Termination Date") (a) indefeasible payment in full of the
Obligations and termination of the Commitments, or (b) the final
liquidation, sale or other disposition of all Collateral, and the
receipt of the proceeds thereof by Agent. The Lenders may,
without notice to Subordinated Creditor, extend or continue or
increase the amount of credit and make other financial
accommodations to or for the account of Borrower in reliance
upon this Agreement. The obligations of Subordinated Creditor
under this Agreement shall continue to be effective, or be
reinstated, as the case may be, if at any time any payment in
respect of any Obligations is rescinded or must otherwise be
restored or returned by Agent, the Issuing Bank or any Lender
by reason of any bankruptcy, reorganization, arrangement,
composition or Insolvency Proceeding or as a result of the
appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, Borrower or any substantial part of
its property, or otherwise, all as though such payment had not
been made.
6. Warranties and Representations of Subordinated
Creditor. Subordinated Creditor hereby represents and warrants
that: (i) it has not relied nor will it rely on any representation or
information of any nature made by or received from Agent
relative to Borrower in deciding to execute this Agreement; (ii)
no part of the Subordinated Debt is evidenced by any instrument
or writing except the Reimbursement Agreement and the
Subordinated Debt Documents; (iii) Subordinated Creditor is the
lawful owner of the Subordinated Debt; (iv) Subordinated
Creditor has not heretofore assigned or transferred any of the
Subordinated Debt, any interest therein or any Collateral or
security pertaining thereto; (v) Subordinated Creditor has not
heretofore given any subordination in respect to the
Subordinated Debt; (vi) it has the corporate power and authority
to enter into this Agreement, and to do all acts and things as are
required or contemplated hereunder to be done, observed and
performed by it; and (vii) this Agreement has been duly
authorized, validly executed and delivered by one or more
authorized signatories of Subordinated Creditor, and constitutes
the legal, valid and binding obligation of Subordinated Creditor,
enforceable against Subordinated Creditor in accordance with its
terms. Subordinated Creditor also represents and warrants to
Agent that true and complete copies of the Subordinated Debt
Documents have been or concurrently herewith are being
furnished to Agent, and that no part of the Subordinated Debt is
evidenced by any other instrument, security or other writing
which has not been or is not concurrently herewith being
furnished to Agent.
7. Subordinated Creditor Waivers. Subordinated
Creditor expressly waives all notices not specifically required
pursuant to the terms of this Agreement whatsoever, and
Subordinated Creditor expressly consents to reliance by Agent,
the Issuing Bank and the Lenders upon the subordination and
other agreements as herein provided. Subordinated Creditor
agrees that neither Agent, the Issuing Bank nor any Lender has
made warranties or representations with respect to the due
execution, legality, validity, completeness or enforceability of
the Loan Documents or the collectibility of the obligations
thereunder, that Agent shall be entitled to manage and
supervise the Loans in accordance with applicable law and its
usual practices, modified from time to time as it deems
appropriate under the circumstances, without regard to the
existence of any rights that Subordinated Creditor may now or
hereafter have in or to any of the Collateral, and that neither
Agent, the Issuing Bank nor any Lender shall have any liability
to Subordinated Creditor for, and Subordinated Creditor
waives any claim which Subordinated Creditor may now or
hereafter have against Agent, the Issuing Bank or any Lender
arising out of, and Subordinated Creditor waives any objection
to, (i) any and all actions which Agent, the Issuing Bank or the
Lenders take or omit to take (including, without limitation,
actions with respect to the creation, perfection or continuation
of liens or security interests in the Collateral or the Senior Lien,
actions with respect to the occurrence of an Event of Default,
actions with respect to the foreclosure upon, sale, release, or
depreciation of, or failure to realize upon, the Collateral and
actions with respect to the collection of any claim for all or any
part of the obligations from any account debtor, guarantor or
any other party) with respect to the Loans, the Loan
Documents or to the collection of the Obligations or the
valuation, use, protection or release of the Collateral and/or
other security for the Obligations, (ii) any motion for relief
from the automatic stay brought by Agent, the Issuing Bank or
any Lender, (iii) the procedures established for, or the terms of,
any foreclosure on, or sale or other liquidation of the
Collateral, (iv) Agent's election, in any proceeding instituted
under Chapter 11 of Title 11 of the United States Code (11
U.S.C. 101 et seq.) (the "Bankruptcy Code"), of the
application of Section 1111 (b)(2) of the Bankruptcy Code,
and/or (v) any borrowing of, or grant of a security interest
under Section 364 of the Bankruptcy Code to Borrower as
debtor-in-possession. Additionally, Subordinated Creditor
acknowledges that any right it may have to receive adequate
protection or an administrative claim priority in connection
with any debtor-in-possession financing, use of cash collateral
or otherwise under the Bankruptcy Code is junior and
subordinate to the rights of Agent, the Issuing Bank and the
Lenders to receive adequate protection and administrative
claim priority.
8. Turnover of Prohibited Transfers. If any payment,
distribution or security, or the proceeds thereof, are received by
Subordinated Creditor on account of or with respect to any of
the Subordinated Debt other than as expressly permitted in
paragraph 2(b) hereof, Subordinated Creditor shall forthwith
deliver same to Agent in the form received (except for the
addition of any endorsement or assignment necessary to effect a
transfer of all rights therein to Agent) for application to the
Obligations or, at Agent's option, Subordinated Creditor shall
pay to Agent the amount thereof on demand. Agent is
irrevocable authorized to supply an required endorsement or
assignment which may have been omitted. Until so delivered,
any such payment, distribution or security shall be held by
Subordinated Creditor in trust for Agent, and shall not be
commingled with other funds or property of Subordinated
Creditor.
9. Proceeds. The order of priority of liens set forth
in Section 1 hereof shall apply to all proceeds of the Collateral,
including, without limitation, any insurance proceeds payable in
the event of loss of, or damage to, the Collateral.
10. Waiver of Marshaling. Subordinated Creditor
agrees that Agent shall have no obligation to marshal any part of
the Collateral or any other property, instruments, documents,
agreements or guaranties before enforcing its rights against the
Subordinated Creditor Collateral or any other Collateral.
Accordingly, the parties hereto agree that Agent may liquidate
the Collateral in any order in its sole discretion.
11. Perfection and Release of Liens. Subordinated
Creditor hereby agrees to execute and deliver such documents,
instruments, lien releases, assignments and financing statements
and do such acts as may be necessary in order for Agent to
establish and maintain a first, valid, prior and perfected security
interest in the Collateral. In the event of any sale or other
disposition of all or any part of the Collateral prior to payment in
full of the Obligations, upon request by Agent, Subordinated
Creditor shall execute releases, assignments, UCC terminations
and other similar agreements that are requested by Agent from
time to time; provided, (i) the Agent also releases its lien on such
Collateral in connection with such sale or disposition, and (ii) the
Subordinated Lien shall continue in any proceeds of the
Subordinated Creditor Collateral subject to the provisions of this
Agreement. Upon payment and satisfaction in full of the
Subordinated Debt, Subordinated Creditor shall cooperate fully
in releasing the Subordinated Lien, if in existence at such time,
promptly upon the request of Agent.
12. No Contest of Security Interest. Subordinated
Creditor shall not contest the validity, perfection or
enforceability of the Senior Lien or any other lien or security
interest granted to Agent, the Issuing Bank or any Lender by
Borrower, or any payment on the Obligations or the allowance
of the Obligations as a senior secured claim, and Subordinated
Creditor agrees to cooperate in the defense of any action
contesting the validity, perfection or enforceability of such liens
or security interests or such payment or allowance. Nothing in
this Agreement shall be construed as in any way limiting a party's
right to enforce the order of priorities of liens and debts set forth
herein as against any other Person. Agent (on its own behalf or
on behalf of the Issuing Bank or the Lenders) shall not contest
the validity, perfection or enforceability of the Subordinated
Lien, or the allowance of the Subordinated Debt, provided such
Subordinated Lien and Subordinated Debt are subordinate and
junior to the Senior Lien and the Obligations, in accordance with
all terms and provisions of this Agreement.
13. Subordination Not Affected, Etc. Nothing in this
Agreement shall be construed as affecting or in any way limiting
the extension of any new or additional financial accommodation
by Agent, the Issuing Bank and the Lenders to Borrower and the
terms and conditions hereof shall apply to such new and
additional financial accommodations. Notwithstanding the
preceding sentence or anything contained in this Agreement to
the contrary, none of the provisions of this Agreement shall be
deemed or construed to constitute a commitment or an
obligation on the part of Agent, the Issuing Bank or any Lender
to make any future loans, advances or other extensions of credit
or financial accommodation to Borrower. Subordinated
Creditor understands and agrees that all accrued interest,
charges, expenses, attorneys' fees and other liabilities and
obligations under the Loan Documents shall constitute part of
the Obligations, and nothing in this Agreement shall be
construed as affecting or in any way limiting any indulgence
granted by Agent, the Issuing Bank or any Lender with respect
to any existing financial accommodation to Borrower. The
subordinations effected, and the rights created, hereby shall not
be affected by (a) any amendment of or any addition of or
supplement to the Loan Documents or any other instrument,
document or agreement relating to the Obligations, (b) any
exercise or non-exercise of any right, power or remedy under or
in respect of the Obligations or the Loan Documents or any
other instrument, document or agreement relating thereto, (c)
the release, sale, exchange or surrender, in whole or in part, of
any part of the Collateral or any additional collateral to which
Agent, the Issuing Bank or any Lender may become entitled, (d)
any release of any guarantor of or pledgor securing the
Obligations or any security for such pledge or guaranty, or (e)
any waiver, consent, release, indulgence, extension, renewal,
modification, delay or other action, inaction or omission in
respect of the Obligations or the Loan Documents or any other
instrument, document or agreement relating thereto or any
security therefor or pledge or guaranty thereof, whether or not
Subordinated Creditor shall have had notice or knowledge of
any of the foregoing and regardless of whether Subordinated
Creditor shall have consented or objected thereto. Any
provision of any document, instrument or agreement evidencing,
securing or otherwise relating to the Subordinated Debt
purporting to limit or restrict in any way Borrower's ability to
enter into any agreement with Agent, the Issuing Bank and the
Lenders to amend or modify any document, instrument or
agreement evidencing, securing or otherwise relating to the
Obligations shall be deemed of no force or effect.
14. Legend. Subordinated Creditor will cause all
agreements, notes, bonds, debentures or other instruments from
time to time evidencing the Subordinated Debt or any part
thereof to contain a specific statement thereon to the effect that
the indebtedness evidenced thereby is subject to the provisions
of this Agreement, and Borrower agrees to the foregoing.
15. Voided Payments. To the extent that Agent
receives any payment on behalf of the Obligations which, within
twelve (12) months of the date of such payment, is subsequently
invalidated, declared to be fraudulent, avoidable or preferential,
set aside or is required to be repaid to a trustee, receiver, the
estate of Borrower or any other party under any bankruptcy act,
state or Federal law, common law or equitable cause (such
payment being hereinafter referred to as a "Voided Payment"),
then to the extent of such Voided Payment that portion of the
Obligations which had been previously satisfied by such Voided
Payment shall be revived and continue in full force and effect as
if such Voided Payment had never been made.
16. Violation of Agreement by Borrower. Borrower
agrees not to make any payment on the Subordinated Debt nor
consent to or participate in any act which is in violation of the
provisions of this Agreement. Borrower agrees that should it
make any payment in contravention of any provision of this
Agreement the maturity of said Obligations may be accelerated
in accordance with the terms of the Credit Agreement.
17. Waiver. Irrespective of the due date of any of the
Subordinated Debt and except as permitted by Section 2(b),
Subordinated Creditor hereby expressly waives any and all rights
to payment by Borrower of the Subordinated Debt prior to the
Termination Date.
18. Immediate Effect. This Agreement shall be
effective immediately upon its execution by each of the parties
hereto, and there are no conditions precedent or subsequent to
the effectiveness of this Agreement.
19. Inducement. As an inducement to, and part of
the consideration for, the consent of the Agent, the Issuing Bank
and the Lenders to the creation of the Subordinated Lien, which
Subordinated Creditor and Borrower acknowledge that Agent,
the Issuing Bank and the Lenders would be unwilling to do
without this Agreement, Subordinated Creditor has agreed,
among other things, (i) to subordinate the Subordinated Debt to
the Obligations as set forth herein, (ii) to subordinate the
Subordinated Lien to the Senior Lien, and (iii) to forebear from
foreclosing upon any part of the Collateral or any other security
with respect to the Subordinated Debt or otherwise exercising
Subordinated Creditor's remedies or taking any action against
Borrower upon any of its obligations to Subordinated Creditor
until the Termination Date.
20. Successors and Assigns; Continuing Effect, etc.
This Agreement is being entered into for the benefit of, and shall
be binding upon, the Issuing Bank, each Lender, Agent,
Subordinated Creditor, Borrower and their respective successors
and assigns. Any Lender may assign or participate out to any
other Person any portion of its interest under the Obligations and
no such assignee or participant shall be required to become a
signatory hereto. Any assignee or transferee of Subordinated
Creditor or Borrower shall execute and deliver to the other
parties hereto an agreement pursuant to which they will become
parties hereto as fully as if they were signatories hereto and
providing for the effectiveness of this Agreement as to such
transferee or assignee and other parties. This Agreement shall
be a continuing agreement, shall be irrevocable and shall remain
in full force and effect until the Termination Date.
21. Notification of Defaults. Borrower shall give
written notice to Agent of a default or an event of default by
Borrower under the Additional Unsecured Debt. Subordinated
Creditor shall give written notice to Agent of a default or an
event of default by Borrower under the Subordinated Debt.
Subordinated Creditor acknowledges that any default by
Borrower under the Subordinated Debt or under the Additional
Unsecured Debt is, automatically, an Event of Default of
Borrower under the Obligations.
22. Notices. Any notices, consents, requests,
demands and other communications required or permitted to be
given hereunder shall be in writing and shall be deemed to be
given to any party or parties (a) upon delivery to the address of
the party or parties set forth below if delivered in person or by
courier or if sent by certified or registered mail (return receipt
requested), or (b) upon dispatch if transmitted by telecopy or
other means of facsimile transmission, in any case to the party or
parties at the telecopy numbers set forth below:
If to Borrower:
Zenith Electronics Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Manager, Banking and Finance
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Subordinated Creditor:
LG Electronics Inc.
▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇
Attn: President
Telecopy No. 822-37775304
If to Agent:
Citicorp North America, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ Floor- ▇▇▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto may designate any other address or telecopy
number, as applicable, to which any notices or other
communications shall be given by notice duly given hereunder;
provided, however, that any such notice of other address or
telecopy number shall be deemed to have been given hereunder
only when actually received by the party to which it is addressed.
23. Amendments; Modifications. This Agreement
may not be modified, altered or amended except by an
agreement in writing executed by all of the parties hereto.
24. Cost and Expenses of Enforcement. Borrower
agrees to pay all costs, legal expenses and attorneys' and
paralegals' fees of every kind, paid or incurred by Agent, the
Issuing Bank or any Lender in enforcing its rights hereunder,
including, but not limited to, litigation instituted in a State or
Federal Court, as hereinafter provided (including proceedings
under the United States Bankruptcy Code) or in so enforcing
this Agreement, or in defending against any defense, cause of
action, counterclaim, setoff or cross claim based on any act of
commission or omission by Agent, the Issuing Bank or any
Lender with respect to the Obligations or the Collateral
promptly on demand of Agent.
25. JURISDICTION: SERVICE OF PROCESS.
THE PARTIES HERETO HEREBY IRREVOCABLY AGREE
THAT ALL ACTIONS ARISING DIRECTLY OR
INDIRECTLY AS A RESULT OR IN CONSEQUENCE OF
THIS AGREEMENT SHALL BE INSTITUTED AND
LITIGATED ONLY IN COURTS HAVING SITUS IN NEW
YORK, NEW YORK (OR IN ANY UNITED STATES
BANKRUPTCY COURT WHEREIN ANY CASE OF
BORROWER UNDER THE BANKRUPTCY CODE IS THEN
PENDING), AND HEREBY CONSENT TO THE
EXCLUSIVE JURISDICTION AND VENUE OF ANY
STATE OR FEDERAL COURT LOCATED AND HAVING
ITS SITUS IN SAID CITY AND STATE (OR OF SUCH
BANKRUPTCY COURT). THE PARTIES HERETO
HEREBY WAIVE ANY OBJECTION BASED ON FORUM
NONCONVENIENS, AND HEREBY WAIVE PERSONAL
SERVICE OF ANY AND ALL PROCESS. THE PARTIES
CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY
BE MADE BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO AGENT OR
SUBORDINATED CREDITOR AT THE RESPECTIVE
ADDRESSES SET FORTH HEREIN IN THE MANNER
PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF
COURT, OR OTHERWISE.
26. WAIVER OF DEFENSES; JURY TRIAL.
SUBORDINATED CREDITOR WAIVES EVERY DEFENSE,
CAUSE OF ACTION, COUNTERCLAIM OR SETOFF,
WHICH SUBORDINATED CREDITOR MAY NOW HAVE,
OR HEREAFTER MAY HAVE, TO ANY ACTION BY
AGENT IN ENFORCING THE TERMS AND PROVISIONS
OF THIS AGREEMENT AND RATIFIES AND CONFIRMS
WHATEVER AGENT MAY DO PURSUANT TO THE
TERMS HEREOF AND AGREES THAT AGENT SHALL
NOT BE LIABLE FOR ANY ERRORS OF JUDGMENT OR
MISTAKE OF FACT OR LAW EXCEPT FOR WILLFUL
MISCONDUCT OF AGENT OR BREACH OF THIS
AGREEMENT BY AGENT. AGENT AND
SUBORDINATED CREDITOR, AND EACH ONE OF
THEM, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE IRREVOCABLY, THE RIGHT
EITHER ONE OF THEM OR ANY MAY HAVE TO TRIAL
BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING
BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT AND ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH OR ANY COURSE OF
CONDUCT OR COURSE OF DEALING HEREUNDER, IN
WHICH AGENT AND SUBORDINATED CREDITOR ARE
ADVERSE PARTIES. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE CONSENT OF AGENT, THE
ISSUING BANK AND THE LENDERS TO THE
SUBORDINATED LIEN.
27. Governing Law; Benefit of Agreement. This
Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York. All of the
understandings, agreements, covenants and representations
contained herein are solely for the benefit of Agent, the Issuing
Bank, the Lenders and Subordinated Creditor, and there are no
other Persons who are intended to be benefited in any way
whatsoever by this Agreement.
28. Severability. In the event any one or more of the
provisions contained herein shall for any reason be held to be
invalid, illegal or unenforceable in any respect by a court of
competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and
this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
29. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an
original, and all of which taken together shall constitute one and
the same instrument.
30. Borrower's Acknowledgment. Borrower hereby
consents to this Agreement, agrees to abide by the terms hereof,
agrees to make no payments or distributions contrary to the
terms and provisions hereof and to do every act and thing
necessary to carry out such terms and provisions.
31. Scope of Agreement. Nothing contained in this
Agreement shall affect or impair or be a waiver of any rights of
LG Electronics Inc. in any capacity other than as the holder of
the Subordinated Debt and the Subordinated Lien.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
AGENT: CITICORP NORTH AMERICA, INC.,
for itself and as Agent for the Lenders and the
Issuing Bank
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Its: Vice President
SUBORDINATED LG ELECTRONICS INC.
CREDITOR:
By: /s/ ▇▇▇▇ ▇▇▇
Its: President and Chief Executive Officer
BORROWER: ZENITH ELECTRONICS CORPORATION
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Assistant Treasurer
