EXHIBIT 10.7
EXECUTION COPY
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$80,000,000
CREDIT AND GUARANTEE AGREEMENT
Dated as of February 28, 1997
among
ANACOMP, INC.,
THE FOREIGN SUBSIDIARY BORROWERS,
The Lenders Party Hereto,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent
____________________________________
XXXXXX COMMERCIAL PAPER INC.,
as Arranger and Syndication Agent
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS................................................... 1
1.1 Defined Terms................................................. 1
1.2 Other Definitional Provisions................................. 18
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT
COMMITMENTS.............................................. 19
2.1 Revolving Credit Commitments.................................. 19
2.2 Procedure for Revolving Credit Borrowing...................... 19
2.3 Repayment of Revolving Credit Loans; Evidence of Debt......... 20
2.4 Termination or Reduction of Revolving Credit Commitments...... 21
SECTION 3. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS..................... 21
3.1 The Term Loans................................................ 21
3.2 Procedure for Term Loan Borrowing............................. 21
3.3 Repayment of Term Loans; Evidence of Debt..................... 22
SECTION 4. AMOUNT AND TERMS OF MULTICURRENCY
COMMITMENT............................................... 23
4.1 Multicurrency Commitments..................................... 23
4.2. Making the Multicurrency Loans................................ 23
4.3 Repayment of Multicurrency Loans; Evidence of Debt............ 24
SECTION 5. LETTERS OF CREDIT............................................. 25
5.1 Letters of Credit............................................. 25
5.2 Procedure for Issuance of Letters of Credit................... 26
5.3 Participating Interests....................................... 26
5.4 Payments...................................................... 27
5.5 Further Assurances............................................ 27
5.6 Obligations Absolute.......................................... 27
5.7 Letter of Credit Application.................................. 28
5.8 Purpose of Letters of Credit.................................. 28
SECTION 6. GENERAL PROVISIONS....................................... 28
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PAGE
6.1 Interest Rates and Payment Dates.............................. 28
6.2 Conversion and Continuation Options........................... 29
6.3 Minimum Amounts of Tranches................................... 30
6.4 Optional and Mandatory Prepayments............................ 30
6.5 Commitment Fees; Other Fees................................... 33
6.6 Computation of Interest and Fees.............................. 33
6.7 Inability to Determine Interest Rate.......................... 34
6.8 Pro Rata Treatment and Payments............................... 34
6.9 Illegality.................................................... 37
6.10 Requirements of Law........................................... 37
6.11 Indemnity..................................................... 38
6.12 Taxes......................................................... 39
6.13 Use of Proceeds............................................... 41
6.14 Change in Lending Office; Replacement of Lender............... 41
SECTION 7. REPRESENTATIONS AND WARRANTIES................................ 41
7.1 Financial Condition........................................... 41
7.2 No Change..................................................... 42
7.3 Corporate Existence; Compliance with Law...................... 42
7.4 Corporate Power; Authorization; Enforceable Obligations....... 43
7.5 No Legal Bar.................................................. 43
7.6 No Material Litigation........................................ 43
7.7 No Default.................................................... 43
7.8 Ownership of Property; Liens.................................. 43
7.9 Intellectual Property......................................... 44
7.10 No Burdensome Restrictions.................................... 44
7.11 Taxes......................................................... 44
7.12 Federal Regulations........................................... 44
7.13 ERISA......................................................... 45
7.14 Investment Company Act; Other Regulations..................... 45
7.15 Subsidiaries.................................................. 45
7.16 Environmental Matters......................................... 45
7.17 Solvency...................................................... 46
7.18 Security Documents............................................ 46
7.19 Regulation H.................................................. 46
7.20 Accuracy of Information....................................... 46
SECTION 8. CONDITIONS PRECEDENT.......................................... 47
8.1 Conditions to Closing Date.................................... 47
8.2 Conditions to Each Extension of Credit........................ 51
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PAGE
SECTION 9. AFFIRMATIVE COVENANTS......................................... 52
9.1 Financial Statements.......................................... 52
9.2 Certificates; Other Information............................... 52
9.3 Payment of Obligations........................................ 53
9.4 Maintenance of Existence...................................... 53
9.5 Maintenance of Property; Insurance............................ 54
9.6 Inspection of Property; Books and Records; Discussions........ 54
9.7 Notices....................................................... 54
9.8 Environmental Laws ........................................... 55
9.9 Additional Subsidiaries....................................... 55
9.10 After-Acquired Property....................................... 56
SECTION 10. NEGATIVE COVENANTS............................................ 56
10.1 Financial Condition Covenants................................. 56
10.2 Limitation on Indebtedness.................................... 57
10.3 Limitation on Liens........................................... 58
10.4 Limitation on Guarantee Obligations........................... 59
10.5 Limitation on Fundamental Changes............................. 60
10.6 Limitation on Sale of Assets.................................. 60
10.7 Limitation on Dividends....................................... 61
10.8 Limitation on Capital Expenditures............................ 61
10.9 Limitation on Investments, Loans and Advances................. 61
10.10 Limitation on Optional Payments and Modifications of Debt
Instruments................................................... 62
10.11 Limitation on Transactions with Affiliates.................... 62
10.12 Limitation on Sales and Leasebacks............................ 62
10.13 Limitation on Changes in Fiscal Year.......................... 63
10.14 Limitation on Negative Pledge Clauses......................... 63
10.15 Limitation on Lines of Business............................... 63
10.16 Limitation on Modification of SKC Arrangement................. 63
SECTION 11. GUARANTEE..................................................... 63
11.1 Guarantee..................................................... 63
11.2 No Subrogation................................................ 64
11.3 Amendments, etc. with respect to the Obligations; Waiver of
Rights........................................................ 64
11.4 Guarantee Absolute and Unconditional.......................... 65
11.5 Reinstatement................................................. 66
11.6 Payments...................................................... 66
SECTION 12. EVENTS OF DEFAULT............................................. 66
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SECTION 13. THE ADMINISTRATIVE AGENT AND THE ARRANGER..................... 70
13.1 Appointment................................................... 70
13.2 Delegation of Duties.......................................... 70
13.3 Exculpatory Provisions........................................ 70
13.4 Reliance by Administrative Agent.............................. 70
13.5 Notice of Default............................................. 71
13.6 Non-Reliance on Administrative Agent, Arranger and Other Lenders.
71
13.7 Indemnification............................................... 72
13.8 Administrative Agent in Its Individual Capacity............... 72
13.9 Successor Administrative Agent................................ 72
13.10 The Arranger.................................................. 73
SECTION 14. MISCELLANEOUS................................................. 73
14.1 Amendments and Waivers........................................ 73
14.2 Notices....................................................... 74
14.3 No Waiver; Cumulative Remedies................................ 75
14.4 Survival of Representations and Warranties.................... 76
14.5 Payment of Expenses and Taxes................................. 76
14.6 Successors and Assigns; Participation and Assignments......... 76
14.7 Adjustments; Set-off.......................................... 79
14.8 Counterparts.................................................. 80
14.9 Severability.................................................. 80
14.10 Integration................................................... 80
14.11 GOVERNING LAW................................................. 80
14.12 Submission to Jurisdiction; Waivers........................... 80
14.13 Acknowledgements.............................................. 81
14.14 WAIVERS OF JURY TRIAL......................................... 81
14.15 Power of Attorney............................................. 81
14.16 Judgment...................................................... 82
14.17 Confidentiality............................................... 82
14.18 Matters Relating to Florida AAC Corporation................... 82
14.19 Matters Relating to Certain Existing Financing Statements..... 83
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SCHEDULES:
I Commitments; Addresses
II Foreign Subsidiary Borrowers
III Available Foreign Currency Payment Offices
IV Domestic Subsidiaries; Foreign Subsidiaries
V Properties to be Mortgaged; Jurisdictions for Mortgage Recordings
VI Foreign Subsidiary Pledges
Item 1: Foreign Subsidiary Stock Pledges to be Perfected on Closing
Date
Item 2: Foreign Subsidiary Stock Pledges to be Perfected after
Closing
Date
1.1 Certain Assets to be Acquired
7.1 Contingent Liabilities
7.6 Litigation
7.8 Real Property Owned and Leased
10.2 Existing Indebtedness
10.3 Existing Liens
10.4 Existing Guarantee Obligations
EXHIBITS:
A-1 Form of Revolving Credit Note
A-2 Form of Term Note
B Form of Guarantee and Collateral Agreement
C Form of Mortgage
D Form of Joinder Agreement
E Form of Assignment and Acceptance
F-1 Form of Opinion of Cadwalader, Xxxxxxxxxx & Xxxx
F-2 Form of Opinion of Leagre & Xxxxxx
G Matters to be Covered by Foreign Subsidiary Opinion
H Form of Borrowing Certificate
I Form of Tax Certificate
J-1 Form of Notice of Borrowing (Multicurrency Loans)
J-2 Form of Notice of Continuation (Multicurrency Loans)
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CREDIT AND GUARANTEE AGREEMENT, dated as of February 28, 1997, among
ANACOMP, INC., an Indiana corporation (the "COMPANY"), each FOREIGN SUBSIDIARY
BORROWER (as hereinafter defined) (together with the Company, the "BORROWERS"),
the several banks and other financial institutions from time to time parties
hereto (the "LENDERS"), XXXXXX COMMERCIAL PAPER INC., as arranger and
syndication agent (the "ARRANGER") and THE FIRST NATIONAL BANK OF CHICAGO, a
national banking association, as administrative agent for the Lenders hereunder
(as hereinafter defined, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, the Company has requested the Lenders to extend certain
credit to the Company and the Foreign Subsidiary Borrowers; and
WHEREAS, the Lenders are willing to extend such credit on and subject
to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"ABR LOANS": Loans, the rate of interest applicable to which is based
upon the Alternate Base Rate.
"ACQUISITION": any transaction or series of related transactions by
which the Company or any of its Subsidiaries (a) acquires any going
business or all or substantially all of the assets of any Person, whether
through purchase of assets, merger or otherwise or (b) directly or
indirectly acquires (in one transaction or in a series of related
transactions) at least (i) a majority (in number of votes) of the Capital
Stock having ordinary voting power for the election of directors (or other
managers) of any Person or (ii) a majority of the ownership interests in
any Person.
"AFFILIATE": of any Person, (a) any other Person (other than a
wholly owned Subsidiary of such Person) which, directly or indirectly, is
in control of, is controlled by, or is under common control with, such
Person or (b) any other Person who is a director or officer of (i) such
Person, (ii) any Subsidiary of such Person or (iii) any Person described in
clause (a) above. For purposes of this definition, a Person shall be
deemed to be "controlled by" such other Person if such other Person
possesses, directly or indirectly, power either to (A) vote 10% or more of
the securities having ordinary
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voting power for the election of directors of such first Person or (B)
direct or cause the direction of the management and policies of such first
Person whether by contract or otherwise.
"AGGREGATE AVAILABLE REVOLVING CREDIT COMMITMENTS": as at any date of
determination with respect to all Revolving Credit Lenders, an amount in
U.S. Dollars equal to the Available Revolving Credit Commitments of all
Revolving Credit Lenders on such date.
"AGGREGATE MULTICURRENCY OUTSTANDINGS": as at any date of
determination with respect to any Revolving Credit Lender, an amount in the
applicable Available Foreign Currencies equal to the aggregate unpaid
principal amount of such Revolving Credit Lender's Multicurrency Loans.
"AGGREGATE REVOLVING CREDIT COMMITMENTS": the aggregate amount of the
Revolving Credit Commitments of all the Revolving Credit Lenders.
"AGGREGATE REVOLVING CREDIT OUTSTANDINGS": as at any date of
determination with respect to any Lender, the sum of (a) the aggregate
unpaid principal amount of such Lender's Revolving Credit Loans on such
date and (b) such Lender's Revolving Credit Commitment Percentage of the
aggregate Letter of Credit Obligations on such date and (c) the U.S. Dollar
Equivalent of the Aggregate Multicurrency Outstandings of such Lender.
"AGGREGATE TOTAL OUTSTANDINGS": as at any date of determination with
respect to any Lender, an amount in U.S. Dollars equal to the sum of (a)
the Aggregate Revolving Credit Outstandings of such Lender on such date and
(b) the aggregate unpaid principal amount of such Lender's Term Loans on
such date.
"AGREEMENT": this Credit and Guarantee Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"AGREEMENT CURRENCY": as defined in subsection 14.16(b).
"ALTERNATE BASE RATE": for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day and (ii)
the sum of Federal Funds Effective Rate for such day plus 1/2% per annum.
For purposes hereof: "CORPORATE BASE RATE" means a rate per annum equal to
the corporate base rate of interest announced by First Chicago from time to
time, changing when and as said corporate base rate changes; 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
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the day of such transactions received by the Administrative Agent from
three federal funds brokers of recognized standing selected by it. Any
change in the Alternate Base Rate due to a change in the Corporate Base
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 Corporate
Base Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE MARGIN": (a) 2.00%, in the case of all ABR Loans and (b)
3.00% in the case of all Eurodollar Loans and all Multicurrency Loans.
"ASSET SALE": any sale, sale-leaseback, or other disposition by the
Company or any Subsidiary thereof of any of its property or assets,
including the stock of any Subsidiary, other than any sale, sale-leaseback
or other disposition permitted under subsections 10.6(a) through (d) or
subsection 10.12.
"ASSIGNEE": as defined in subsection 14.6(c).
"AVAILABLE FOREIGN CURRENCIES": Deutsche Marks, Pounds Sterling,
French Francs, Canadian Dollars, Belgian Francs and Italian Lire and any
other available and freely-convertible non-U.S. Dollar currency selected by
the Company and approved by the Administrative Agent and the Majority
Revolving Credit Lenders in the manner described in subsection 14.1(b).
"AVAILABLE REVOLVING CREDIT COMMITMENT": as at any date of
determination with respect to any Revolving Credit Lender, an amount in
U.S. Dollars equal to the excess, if any, of (a) the amount of such
Lender's Revolving Credit Commitment in effect on such date OVER (b) the
Aggregate Revolving Credit Outstandings of such Lender on such date.
"BENEFITTED LENDER": as defined in subsection 14.7.
"BOARD": the Board of Governors of the Federal Reserve System (or any
successor thereto).
"BORROWERS": as defined in the preamble hereto.
"BORROWING DATE": any Business Day specified in a notice pursuant to
subsection 2.2, 3.2 or 4.3 as a date on which a Borrower requests the
Lenders to make Loans hereunder.
"BUSINESS DAY": (a) when such term is used in respect of a day on
which a Loan in an Available Foreign Currency is to be made, a payment is
to be made in respect of such Loan, an Exchange Rate is to be set in
respect of such Available Foreign Currency or any other dealing in such
Available Foreign Currency is to be carried out pursuant to this Agreement,
such term shall mean a London Banking Day
4
which is also a day on which banks are open for general banking business in
the city which is the principal financial center of the country of issuance
of such Available Foreign Currency and (b) when such term is used in any
context in this Agreement (including as described in the foregoing clause
(a)), such term shall mean a day which, in addition to complying with any
applicable requirements set forth in the foregoing clause (a), is a day
other than a Saturday, Sunday or other day on which commercial banks in New
York City or Chicago, Illinois are authorized or required by law to close.
"CAPITAL EXPENDITURES": direct or indirect (by way of the acquisition
of securities of a Person or the expenditure of cash or the incurrence of
Indebtedness) expenditures (other than expenditures in connection with
Acquisitions permitted hereunder) in respect of the purchase or other
acquisition of fixed or capital assets (excluding (a) any such asset
acquired in connection with normal replacement and maintenance programs
whether or not properly charged to current operations, (b) any such asset
acquired pursuant to a Financing Lease and (c) any asset described in
Schedule 1.1 acquired for fair market value).
"CAPITAL STOCK": any and all shares, interests, participation or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"CASH EQUIVALENTS": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of one year or less
from the date of acquisition and overnight bank deposits of any Lender or
of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days with respect to securities issued or fully
guaranteed or insured by the United States Government, (d) commercial paper
of a domestic issuer rated at least A-2 by Standard and Poor's Rating Group
("S&P") or P-2 by Xxxxx'x Investors Service, Inc. ("MOODY'S"), (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the
United States, by any political subdivision or taxing authority of any such
state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at
least A by S&P or A by Moody's (or the equivalent rating by either such
rating agency for such type of securities), (f) securities with maturities
of one year or less from the date of acquisition backed by standby letters
of credit issued by any commercial bank satisfying the requirements of
clause (b) of this definition or (g) shares of money market mutual or
similar funds which invest
5
exclusively in assets satisfying the requirements of clauses (a) through
(f) of this definition.
"CLASS": the classification of loans as Revolving Credit Loans, Term
Loans or Multicurrency Loans, each of which categories shall be deemed to
be a "Class" of Loans.
"CLOSING DATE": the date on or before February 28, 1997 on which all
of the conditions precedent set forth in subsection 8.1 shall have been met
or waived and the initial Loans are made.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COMMERCIAL LETTERS OF CREDIT": as defined in subsection 5.1(ii).
"COMMITMENTS": the collective reference to the Revolving Credit
Commitments, the Term Loan Commitments and the Multicurrency Commitments.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Company within the meaning of
Section 4001 of ERISA or is part of a group which includes the Company and
which is treated as a single employer under Section 414 of the Code.
"CONSOLIDATED CASH FLOW": for any period, Consolidated Net Income for
such period, PLUS the sum of (i) depreciation expense and amortization
expense deducted from earnings in determining such Consolidated Net Income,
(ii) the deferred tax expense of the Company for such period and (iii) the
amount of interest expense deducted in determining and Consolidated Net
Income to the extent such interest expense represents accreted or
paid-in-kind interest, and MINUS the sum of (i) the deferred tax credit of
the Company for such period, and (ii) the aggregate amount actually paid in
cash during such period by the Company and its Subsidiaries on account of
Capital Expenditures and Acquisitions permitted hereunder (but only to the
extent not financed by Indebtedness or capital contributions), in each
case, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED CURRENT ASSETS": at a particular date, all assets of
the Company (other than cash and cash equivalents) which, in accordance
with GAAP, would be classified on a consolidated balance sheet of the
Company and its Subsidiaries as current assets.
"CONSOLIDATED CURRENT LIABILITIES": at a particular date, all
liabilities of the Company (other than current maturities of long-term and
short-term debt) which, in accordance with GAAP, would be classified on a
consolidated balance sheet of the Company and its Subsidiaries as current
liabilities.
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"CONSOLIDATED EBITDA": for any period, the sum of (i) Consolidated
Net Income for such period, (ii) Consolidated Interest Expense for such
period, (iii) the amount of taxes, depreciation and amortization deducted
from earnings in determining such Consolidated Net Income and (iv) the
amount of any premium paid on refinanced Existing Subordinated Debt, and
any underwriting fee or similar fee not capitalized paid in connection with
the issuance of New Subordinated Debt.
"CONSOLIDATED EXCESS CASH FLOW": for any period, Consolidated Cash
Flow for such period, PLUS the net decrease during such period (if any) in
Consolidated Working Capital and MINUS the sum of (i) the net increase
during such period (if any) in Consolidated Working Capital and
(ii) scheduled principal payments in respect of the Term Loans during such
period; PROVIDED, that in determining Consolidated Excess Cash Flow for the
fiscal year ending September 30, 1997, any net decrease in Consolidated
Working Capital up to an aggregate amount of $5,000,000 shall not be
included.
"CONSOLIDATED INDEBTEDNESS": at a particular date, all Indebtedness
of the Company and its Subsidiaries, determined on a consolidated basis.
"CONSOLIDATED INTEREST EXPENSE": for any fiscal period, the amount
which would, in conformity with GAAP, be set forth opposite the caption
"interest expense" (or any like caption) on a consolidated income statement
of the Company and its Subsidiaries for such period.
"CONSOLIDATED NET INCOME": for any fiscal period, the consolidated
net income (or deficit) of the Company and its Subsidiaries for such period
(taken as a cumulative whole), determined on a consolidated basis in
accordance with GAAP; PROVIDED, that any non-cash extraordinary gains and
losses shall be excluded in determining Consolidated Net Income.
"CONSOLIDATED WORKING CAPITAL": at a particular date, Consolidated
Current Assets MINUS Consolidated Current Liabilities, in each case on such
date.
"CONTINUING DIRECTORS": the directors of the Company on the Closing
Date and each other director, if such other director's nomination for
election to the Board of Directors of the Company is recommended by a
majority of the then Continuing Directors.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
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"DEFAULT": any of the events specified in Section 12, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"DOLLARS", "U.S. DOLLARS" and "$": dollars in lawful currency of the
United States of America.
"DOMESTIC SUBSIDIARY": any Subsidiary other than a Foreign
Subsidiary.
"ENVIRONMENTAL COMPLAINT": any complaint, order, citation, notice or
other written communication from any Person with respect to the existence
or alleged existence of a violation of any Environmental Laws or legal
liability resulting from air emissions, water discharges, noise emissions,
Hazardous Material or any other environmental, health or safety matter.
"ENVIRONMENTAL LAWS": any and all applicable Federal, foreign, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority and any and all
common law requirements, rules and bases of liability regulating, relating
to or imposing liability or standards of conduct concerning pollution or
protection of the environment or the Release or threatened Release of
Hazardous Materials, as now or hereafter in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY LIABILITIES": at any time, all reserve requirements in
effect at such time (including, without limitation, basic, supplemental,
marginal and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto) dealing
with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board)
maintained by a member bank of the Federal Reserve System.
"EUROCURRENCY RATE": with respect to any Multicurrency Loan for the
relevant Interest Period, the rate determined by the Administrative Agent
to be the rate at which First Chicago offers to place deposits in the
applicable Available Foreign Currency with first-class banks in the London
interbank market at approximately 11 A.M. (London time) two Business Days
prior to the first day of such Interest Period, in the approximate amount
of First Chicago's relevant Multicurrency Loan and having a maturity
approximately equal to such Interest Period. The Eurocurrency Rate shall
be rounded to the next higher multiple of 1/16 of 1% if the rate is not
such a multiple.
"EURODOLLAR BASE RATE": with respect to a Eurodollar Loan for the
relevant Interest Period, the applicable London interbank offered rate for
deposits in U.S. Dollars appearing on Telerate Page 3750 as of 11:00 A.M.
(London time) two Business
8
Days prior to the first day of such Interest Period, and having a maturity
approximately equal to such Interest Period. If no London interbank
offered rate of such maturity then appears on Telerate Page 3750, then the
Eurodollar Base Rate shall be equal to the London interbank offered rate
for deposits in U.S. Dollars maturing immediately before or immediately
after such maturity, whichever is higher, as determined by the
Administrative Agent from Telerate Page 3750. If Telerate Page 3750 is not
available, the applicable Eurodollar Base Rate for the relevant Interest
Period shall be the rate determined by the Administrative Agent to be the
rate at which First Chicago offers to place deposits in U.S. Dollars with
first-class banks in the London interbank market at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of First Chicago's relevant
portion of the Eurodollar Loan and having a maturity approximately equal to
such Interest Period.
"EURODOLLAR LOANS": Revolving Credit Loans and Term Loans the rate of
interest applicable to which is based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to a Eurodollar Loan for the relevant
Interest Period, the quotient of (a) the Eurodollar Base Rate applicable to
such Interest Period, divided by (b) one minus the Eurocurrency Liabilities
(expressed as a decimal) applicable to such Interest Period. The
Eurodollar Rate shall be rounded to the next higher multiple of 1/16 of 1%
if the rate is not such a multiple.
"EVENT OF DEFAULT": any of the events specified in Section 12,
PROVIDED that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"EXCHANGE ACT": the Securities Exchange Act of 1934, as amended.
"EXISTING SUBORDINATED DEBT": the Company's 13% Senior Subordinated
Notes, due 2002 in an original principal amount of $160,000,000.
"EXTENSION OF CREDIT": as to any Lender, the making of a Loan by such
Lender and, with respect to any Revolving Credit Lender, the issuance of
any Letter of Credit.
"FINANCING LEASE": (a) any lease of property, real or personal, the
obligations under which are capitalized on a consolidated balance sheet of
the Company and its Subsidiaries and (b) any other such lease to the extent
that the then present value of the minimum rental commitment thereunder
should, in accordance with GAAP, be capitalized on a balance sheet of the
lessee.
"FIRST CHICAGO": The First National Bank of Chicago in its individual
capacity, and its successors.
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"FOREIGN SUBSIDIARIES": each of the Subsidiaries so designated on
Schedule VI and any Subsidiaries organized outside the United States which
are created after the effectiveness hereof.
"FOREIGN SUBSIDIARY BORROWER": each Foreign Subsidiary listed as a
Foreign Subsidiary Borrower in Schedule II as amended from time to time in
accordance with subsection 14.1(b)(i).
"FOREIGN SUBSIDIARY OPINION": with respect to any Foreign Subsidiary
Borrower, a legal opinion of counsel to such Foreign Subsidiary Borrower
addressed to the Administrative Agents and the Lenders concluding that such
Foreign Subsidiary Borrower and the Loan Documents to which it is a party
substantially comply with the matters listed on Exhibit G, with such
assumptions, qualifications and deviations therefrom as the Administrative
Agent shall approve (such approval not to be unreasonably withheld).
"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,
province or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"GUARANTEE AND COLLATERAL AGREEMENT": the Guarantee and Collateral
Agreement, substantially in the form of Exhibit B, to be executed and
delivered on the Closing Date by the Company and each of its Domestic
Subsidiaries, as the same may be amended, supplemented or otherwise
modified.
"GUARANTEE OBLIGATION": as to any Person, any obligation of such
Person guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations (the "PRIMARY OBLIGATIONS") of any other
Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent (a) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) 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 (d) 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 shall be deemed to be an amount equal to the value
as of any date of determination of
10
the stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made (unless such Guarantee Obligation
shall be expressly limited to a lesser amount, in which case such lesser
amount shall apply) or, if not stated or determinable, the value as of any
date of determination of the maximum reasonably anticipated liability in
respect thereof as determined by such Person in good faith.
"HAZARDOUS MATERIALS": any solid wastes, toxic or hazardous
substances, materials or wastes, defined, listed, classified or regulated
as such in or under any Environmental Laws, including, without limitation,
asbestos, petroleum or petroleum products (including gasoline, crude oil or
any fraction thereof), polychlorinated biphenyls, and urea-formaldehyde
insulation, and any other substance the presence of which may give rise to
liability under any Environmental Law.
"HEDGE AGREEMENT": any interest rate protection agreement, interest
rate swap or other interest rate hedge arrangement, or currency swap or
other currency hedge arrangement (other than any interest rate cap or other
similar agreement or arrangement pursuant to which the Company has no
credit exposure), to or under which the Company or any of its Subsidiaries
is a party or a beneficiary.
"HEDGE AGREEMENT OBLIGATIONS": all obligations of the Company under
any one or more Hedge Agreements to make payments to the counterparties
thereunder upon the occurrence of a termination event or similar event
thereunder.
"INDEBTEDNESS": of a Person, at a particular date, the sum (without
duplication) at such date of (a) indebtedness for borrowed money or for the
deferred purchase price of property or services in respect of which such
Person is liable as obligor (other than current trade liabilities incurred
in the ordinary course of business and payable in accordance with customary
practices, and other than SKC Arrangement Obligations), (b) indebtedness
secured by any Lien on any property or asset owned or held by such Person
regardless of whether the indebtedness secured thereby shall have been
assumed by or is a primary liability of such Person, (other than SKC
Arrangement Obligations) (c) obligations of such Person under Financing
Leases, (d) the face amount of all letters of credit issued for the account
of such person and, without duplication, the unreimbursed amount of all
drafts drawn thereunder and (e) obligations (in the nature of principal or
interest) of such Person in respect of acceptances or similar obligations
issued or created for the account of such Person.
"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.
11
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan or Multicurrency Loan having an
Interest Period of three months or less, the last day of such Interest
Period and (c) as to any Eurodollar Loan or Multicurrency Loan having an
Interest Period longer than three months, (i) each day which is three
months after the first day of such Interest Period and (ii) the last day of
such Interest Period.
"INTEREST PERIOD": with respect to any Eurodollar Loan or
Multicurrency Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan or Multicurrency Loan and ending one, two, three or six months
thereafter, as selected by the relevant Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with
respect thereto; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan or
Multicurrency Loan and ending one, two, three or six months
thereafter, as selected by the relevant Borrower by irrevocable notice
to the Administrative Agent not less than three Business Days prior to
the last day of the then current Interest Period with respect thereto;
PROVIDED that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Loan or
Multicurrency Loan would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period applicable to a Eurodollar Loan or
Multicurrency Loan that would otherwise extend beyond the Revolving
Credit Termination Date or, with respect to any Term Loan, the final
maturity date for such Term Loan, shall end on the Revolving Credit
Termination Date or such final maturity date; and
(iii) any Interest Period pertaining to a Eurodollar Loan or
Multicurrency Loan that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month.
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"ISSUING LENDER": First Chicago, in its capacity as issuer of the
Letters of Credit and any other Revolving Credit Lender which the Company,
the Administrative Agent and the Majority Revolving Credit Lenders shall
have approved, in its capacity as issuer of the Letters of Credit.
"JOINDER AGREEMENT": each Joinder Agreement, substantially in the
form of Exhibit D, executed and delivered pursuant to subsection 14.1(b).
"JUDGMENT CURRENCY": as defined in subsection 14.16(b).
"LENDERS": as defined in the preamble hereto.
"LETTER OF CREDIT APPLICATIONS": (a) in the case of Standby Letters
of Credit, a letter of credit application for a Standby Letter of Credit on
the standard form of the applicable Issuing Lender for standby letters of
credit, and (b) in the case of Commercial Letters of Credit, a letter of
credit application for a Commercial Letter of Credit on the standard form
of the applicable Issuing Lender for commercial letters of credit.
"LETTER OF CREDIT OBLIGATIONS": at any particular time, all
liabilities of the Company with respect to Letters of Credit, whether or
not any such liability is contingent, including (without duplication) the
sum of (a) the aggregate undrawn face amount of all Letters of Credit then
outstanding plus (b) the aggregate amount of all unpaid Reimbursement
Obligations.
"LETTERS OF CREDIT": as defined in subsection 5.1(ii).
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement (other than a bank or similar deposit account), encumbrance,
lien (statutory or other), or preference, priority or other security
agreement or similar preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any Financing Lease having substantially the
same economic effect as any of the foregoing, and the filing of any
financing statement under the Uniform Commercial Code or comparable law of
any jurisdiction in respect of any of the foregoing).
"LOAN DOCUMENTS": the collective reference to this Agreement, any
Notes, any documents or instruments evidencing or governing the Security
Documents.
"LOAN PARTIES": the collective reference to the Company, the Foreign
Subsidiary Borrowers and each guarantor or grantor party to any Security
Document.
"LOANS": the collective reference to the Revolving Credit Loans, the
Term Loans and the Multicurrency Loans.
13
"LONDON BANKING DAY": any day on which banks in London are open for
general banking business, including dealings in foreign currency and
exchange.
"MAJORITY LENDERS": (a) at any time prior to the termination of the
Commitments, Lenders having Available Revolving Credit Commitments, undrawn
Term Loan Commitments and Aggregate Total Outstandings aggregating more
than 50% of the sum of the Available Revolving Credit Commitments, undrawn
Term Loan Commitments and Aggregate Total Outstandings of all Lenders, and
(b) at any time after the termination of the Commitments, Lenders having
Aggregate Total Outstandings aggregating more than 50% of the Aggregate
Total Outstandings of all Lenders.
"MAJORITY REVOLVING CREDIT LENDERS": at any time, Revolving Credit
Lenders the Revolving Credit Commitment Percentages of which aggregate more
than 50%.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"MATERIAL ENVIRONMENTAL AMOUNT": $3,000,000.
"MATERIAL FOREIGN SUBSIDIARY": any Foreign Subsidiary accounting for
5% or more of the assets or revenues of the Company and its consolidated
Subsidiaries, taken as a whole.
"MOODY'S": Xxxxx'x Investors Service, Inc. or any successor thereto.
"MORTGAGES": the collective reference to the mortgages and deeds of
trust to be executed and delivered by the Company or the appropriate
Subsidiary, substantially in the form of Exhibit C (with such changes
therein as may be required to reflect different laws and practices in the
various jurisdictions in which the Mortgages are to be recorded), covering
the parcels of real property identified in Schedule V and such after-
acquired properties as required pursuant to subsection 9.10, as the same may be
amended, supplemented or otherwise modified from time to time.
"MULTICURRENCY LOANS": as defined in subsection 4.1.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET PROCEEDS": the aggregate cash proceeds received by the Company
or any Subsidiary thereof in respect of:
14
(a) any incurrence by the Company or any of its Subsidiaries of
any Indebtedness, or any issuance by the Company of Capital Stock,
after the Closing Date;
(b) any Asset Sale;
(c) any cash payments received in respect of promissory notes
delivered to the Company or such Subsidiary in respect of an Asset
Sale;
in each case net of (without duplication) (A) the amount required to repay
any Indebtedness (other than the Loans) secured by a Lien on any assets of
the Company or a Subsidiary of the Company that are collateral for any such
Indebtedness that are sold or otherwise disposed of in connection with such
Asset Sale, (B) the reasonable expenses (including legal fees and brokers'
and underwriters' commissions, lenders' fees or credit enhancement fees, in
any case, paid to third parties) incurred in effecting such issuance or
sale, (C) any taxes reasonably attributable to such sale and reasonably
estimated by the Company or such Subsidiary to be actually payable in cash
and (D) the amount of any reserve established in accordance with GAAP
against any liabilities associated with the assets sold, retained by the
Company or any Subsidiary, PROVIDED, that any reduction of such reserve to
the extent not accompanied by a cash payment in respect of the liabilities
reserved against shall constitute Net Proceeds.
"NEW SUBORDINATED DEBT": up to $200,000,000 in aggregate principal
amount of subordinated indebtedness of the Company issued after the Closing
Date (i) having terms and conditions (including subordination provisions)
which, in the reasonable good faith judgment of the Majority Lenders, are
at least as favorable to the Borrower and the Lenders as those applicable
to the Existing Subordinated Debt and which expressly provides that the
Obligations constitute senior indebtedness thereunder and (ii) the Net
Proceeds of which are used to repay the Existing Subordinated Debt and,
after repayment in full of the Existing Subordinated Debt (including any
prepayment penalties and premium), to prepay the Term Loans or for other
general corporate purposes. For purposes of determining whether proposed
New Subordinated Debt satisfies the conditions set forth in clause (i) of
the preceding sentence, the Company shall submit the terms of such New
Subordinated Debt in writing to the Lenders, and if the Majority Lenders,
either directly or through the Administrative Agent, do not advise the
Company within ten Business Days that such proposed New Subordinated Debt
does not satisfy such conditions, such proposed New Subordinated Debt shall
be deemed to satisfy such conditions.
"NON-EXCLUDED TAXES": as defined in subsection 6.12(a).
"NOTES": the collective reference to the Revolving Credit Notes and
the Term Notes.
15
"OBLIGATIONS": collectively, the unpaid principal of and interest on
the Loans, the Reimbursement Obligations and all other obligations and
liabilities of the Company and each Foreign Subsidiary Borrower under or in
connection with this Agreement and the other Loan Documents (including in
each case, without limitation, interest accruing at the then applicable
rate provided in this Agreement or any other applicable Loan Document after
the maturity of the Loans and interest accruing at the then applicable rate
provided in this Agreement or any other applicable Loan Document after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Company,
whether or not a claim for post-filing or post-petition interest is allowed
in such proceeding), 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, this Agreement, the Notes, the
Letters of Credit, the Letter of Credit Applications, 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 Administrative Agents or to the Lenders).
"PARTICIPANTS": as defined in subsection 14.6(b).
"PARTICIPATING INTEREST": with respect to any Letter of Credit (A) in
the case of the Issuing Lender, its interest in such Letter of Credit and
any Letter of Credit Application relating thereto after giving effect to
the granting of any participating interests therein pursuant hereto and (b)
in the case of each Participating Lender, its undivided participating
interest in such Letter of Credit and any Letter of Credit Application
relating thereto.
"PARTICIPATING LENDER": any Revolving Credit Lender (other than the
Issuing Lender) with respect to its Participating Interest in a Letter of
Credit.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"PERSON": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Company 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.
"PLEDGED STOCK": as defined in the Guarantee and Collateral
Agreement.
16
"PROPERTY": each parcel of real property owned or operated by the
Company and its Subsidiaries.
"REGISTER": as defined in subsection 14.6(d).
"REIMBURSEMENT OBLIGATION": the obligation of the Company to
reimburse the Issuing Lender in accordance with the terms of this Agreement
and the related Letter of Credit Application for any payment made by the
Issuing Lender under any Letter of Credit.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, escaping, leaking, dumping, disposing, spreading,
depositing or dispersing of any Hazardous Materials in, unto or onto the
environment.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under any of subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section 4043 or any successor regulation thereto.
"REQUIREMENT OF LAW": as to (a) any Person, the certificate of
incorporation and by-laws or the partnership or limited partnership
agreement 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, and (b) any property, any law, treaty,
rule, regulation, requirement, judgment, decree or determination of any
Governmental Authority applicable to or binding upon such property or to
which such property is subject, including, without limitation, any
Environmental Laws.
"RESPONSIBLE OFFICER": with respect to any Loan Party, the chief
executive officer, the president, the chief financial officer, any vice
president, the treasurer or the assistant treasurer of such Loan Party.
"REVOLVING CREDIT COMMITMENT": as to any Revolving Credit Lender at
any time, its obligation to make Revolving Credit Loans to, and/or
participate in Letters of Credit issued for the account of, the Company in
an aggregate amount not to exceed at any time outstanding the U.S. Dollar
amount set forth opposite such Revolving Credit Lender's name in Schedule I
under the heading "Revolving Credit Commitment", as such amount may be
reduced from time to time pursuant to subsection 2.4 and the other
applicable provisions hereof.
17
"REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any Revolving Credit
Lender at any time, the percentage which such Revolving Credit Lender's
Revolving Credit Commitment then constitutes of the Aggregate Revolving
Credit Commitments (or, if the Revolving Credit Commitments have terminated
or expired, the percentage which (a) the Aggregate Revolving Credit
Outstandings of such Revolving Credit Lender at such time then constitutes
of (b) the Aggregate Revolving Credit Outstandings of all Revolving Credit
Lenders at such time).
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and including
the Closing Date to but not including the Revolving Credit Termination
Date, or such earlier date on which the Revolving Credit Commitments shall
terminate as provided herein.
"REVOLVING CREDIT LENDER": each Lender having an amount greater than
zero set forth under the heading "Revolving Credit Commitment" opposite its
name on Schedule I.
"REVOLVING CREDIT LOAN": as defined in subsection 2.1.
"REVOLVING CREDIT NOTE": as defined in subsection 2.3(e).
"REVOLVING CREDIT TERMINATION DATE": February 28, 2001.
"SECURITIES ACT": the Securities Act of 1933, as amended.
"SECURITY DOCUMENTS": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and each other pledge agreement,
security document or similar agreement that may be delivered to the
Administrative Agent as collateral security for any or all of the
Obligations, in each case as amended, supplemented or otherwise modified
from time to time.
"SENIOR NOTES": the Company's 11-5/8% Senior Secured Notes due 1999.
"SKC ARRANGEMENT": the Amended and Restated Master Supply Agreement,
dated as of October 8, 1993, among the Company, SKC America, Inc. a New
Jersey corporation, and SKC Limited, a corporation organized under the laws
of the Republic of Korea, as amended, supplemented or otherwise modified
from time to time.
"SKC ARRANGEMENT OBLIGATIONS": all indebtedness, obligations and
liabilities of the Company under the SKC Arrangement.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
18
"SOLVENT": with respect to any Person on a particular date, the
condition that on such date, (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts
as they become absolute and mature, (c) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (d) such
Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's property would
constitute an unreasonably small amount of capital.
"STANDBY LETTERS OF CREDIT": as defined in subsection 5.1(i).
"SUBORDINATED DEBT": the Existing Subordinated Debt and the New
Subordinated Debt.
"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 (exclusive of
any Affiliate in which such Person has a minority ownership interest).
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Company.
"TERM LOAN": as defined in subsection 3.1.
"TERM LOAN COMMITMENT": as to any Lender at any time, its obligation
to make Term Loans to the Company in an aggregate amount not to exceed the
amount set forth opposite such Lender's name in Schedule I under the
heading "Term Loan Commitment".
"TERM LOAN COMMITMENT PERCENTAGE": as to any Term Loan Lender at any
time, the percentage which such Term Loan Lender's Term Loan Commitment
then constitutes of the aggregate Term Loan Commitments of all Term Loan
Lenders.
"TERM LOAN LENDER": each Lender having an amount greater than zero
set forth under the heading "Term Loan Commitment" opposite its name on
Schedule I.
"TERM NOTE": as defined in subsection 3.3(e).
19
"TRANCHE": the collective reference to Eurodollar Loans of the same
Class or Multicurrency Loans the then current Interest Periods with respect
to all of which begin on the same date and end on the same later date
(whether or not such Loans shall originally have been made on the same
day).
"TRANSFEREE": as defined in subsection 14.6(f).
"TYPE": as to any Revolving Credit Loan or Term Loan, its nature as
an ABR Loan or a Eurodollar Loan.
"U.S. DOLLAR EQUIVALENT": with respect to an amount denominated in
any currency other than U.S. Dollars, the equivalent in U.S. Dollars of
such amount, calculated on the basis of the arithmetical mean of the buy
and sell spot rates of exchange of the Administrative Agent for such
Available Foreign Currency in the London market at 11:00 a.m. London time,
two Business Days prior to the date on which such amount is to be
determined.
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, the other Loan Documents or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in the Notes and any other Loan Document, and
any certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Company 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
PROVIDED that, if the Company notifies the Administrative Agent that the Company
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Company that the Majority Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
(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.
20
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT
COMMITMENTS
2.1 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans (each, a "REVOLVING CREDIT LOAN") in U.S. Dollars to the
Company from time to time during the Revolving Credit Commitment Period so long
as after giving effect thereto (i) the Available Revolving Credit Commitment of
each Revolving Credit Lender is greater than or equal to zero and (ii) the
Aggregate Revolving Credit Outstandings of all Revolving Credit Lenders do not
exceed the Aggregate Revolving Credit Commitments. During the Revolving Credit
Commitment Period the Company may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i) Eurodollar
Loans, (ii) ABR Loans or (iii) a combination thereof, as determined by the
Company and notified to the Administrative Agent in accordance with subsections
2.2 and 6.2, PROVIDED that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the Revolving Credit
Termination Date.
2.2 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Company may borrow
under the Revolving Credit Commitments during the Revolving Credit Commitment
Period on any Business Day, PROVIDED that the Company shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 11:00 A.M. (New York time) at least (a) three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Revolving Credit Loans are to be initially Eurodollar Loans, or (b)
one Business Day prior to the requested Borrowing Date, otherwise), specifying
in each case (i) the amount to be borrowed, (ii) the requested Borrowing Date,
(iii) whether the borrowing is to be of Eurodollar Loans, ABR Loans or a
combination thereof and (iv) if the borrowing is to be entirely or partly of
Eurodollar Loans, the amount of such Type of Loan and the length of the initial
Interest Periods therefor. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to (A) in the case of ABR Loans,
$1,000,000 or a whole multiple of $1,000,000 in excess thereof (or, if the then
Aggregate Available Revolving Credit Commitments are less than $1,000,000, such
lesser amount) and (B) in the case of Eurodollar Loans, $1,000,000 or a whole
multiple of $1,000,000 in excess thereof. Upon receipt of any such notice from
the Company, the Administrative Agent shall promptly notify each Revolving
Credit Lender thereof. Not later than 12:00 Noon, New York City time, on each
requested Borrowing Date each Revolving Credit Lender shall make an amount equal
to its Revolving Credit Commitment Percentage of the principal amount of the
Revolving Credit Loans requested to be made on such Borrowing Date available to
the Administrative Agent at its office specified in subsection 14.2 in U.S.
Dollars and in immediately available funds. The Administrative Agent shall on
such date credit the account of the Company on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Revolving Credit Lenders and in like funds as received by the Administrative
Agent.
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2.3 REPAYMENT OF REVOLVING CREDIT LOANS; EVIDENCE OF DEBT. (a) The
Company hereby unconditionally promises to pay to the Administrative Agent for
the account of each Revolving Credit Lender the then unpaid principal amount of
each Revolving Credit Loan of such Revolving Credit Lender (whether made before
or after the termination or expiration of the Revolving Credit Commitments) on
the Revolving Credit Termination Date and on such other dates and in such other
amounts as may be required from time to time pursuant to this Agreement. The
Company hereby further agrees to pay interest on the unpaid principal amount of
the Revolving Credit Loans from time to time outstanding until payment thereof
in full at the rates per annum, and on the dates, set forth in subsection 6.1.
(b) Each Revolving Credit Lender shall maintain in accordance with
its usual practice an account or accounts evidencing indebtedness of the Company
to such Revolving Credit Lender resulting from each Revolving Credit Loan of
such Revolving Credit Lender from time to time, including the amounts of
principal and interest payable thereon and paid to such Revolving Credit Lender
from time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 14.6(d), and a subaccount therein for each Revolving Credit Lender,
in which shall be recorded (i) the amount of each Revolving Credit Loan made
hereunder, the Type thereof and each Interest Period applicable thereto, (ii)
the amount of any principal or interest due and payable or to become due and
payable from the Company to each Revolving Credit Lender hereunder in respect of
the Revolving Credit Loans and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Company in respect of the Revolving
Credit Loans and each Revolving Credit Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Revolving Credit Lender maintained pursuant to subsection 2.3(b) shall, to the
extent permitted by applicable law, be PRIMA FACIE evidence of the existence and
amounts of the obligations of the Company therein recorded; PROVIDED, HOWEVER,
that the failure of any Revolving Credit Lender or the Administrative Agent to
maintain the Register or any such account, or any error therein, shall not in
any manner affect the obligation of the Company to repay (with applicable
interest) the Revolving Credit Loans made to the Company by such Revolving
Credit Lender in accordance with the terms of this Agreement.
(e) The Company agrees that, upon the request to the Administrative
Agent by any Revolving Credit Lender, the Company will execute and deliver to
such Revolving Credit Lender a promissory note of the Company evidencing the
Revolving Credit Loans of such Revolving Credit Lender, substantially in the
form of Exhibit A-1 with appropriate insertions as to date and principal amount
(each, a "REVOLVING CREDIT NOTE"); PROVIDED, that the delivery of such Revolving
Credit Notes shall not be a condition precedent to the Closing Date.
2.4 TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS. The
Company shall have the right, upon not less than five Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time,
22
to reduce the amount of the Revolving Credit Commitments; PROVIDED that no such
termination or reduction shall be permitted if, after giving effect thereto and
to any prepayments of the Loans made on the effective date thereof, the
Available Revolving Credit Commitment of any Revolving Credit Lender would not
be greater than or equal to zero. Any such reduction shall be in an amount
equal to $1,000,000 or a whole multiple of $1,000,000 in excess thereof and
shall reduce permanently the Revolving Credit Commitments then in effect.
SECTION 3. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS
3.1 THE TERM LOANS. Subject to the terms and conditions hereof, each
Term Loan Lender severally agrees to make a term loan (a "TERM LOAN") to the
Company on the Closing Date in an amount up to the amount of the Term Loan
Commitment of such Term Loan Lender. The Term Loans may be (a) Eurodollar
Loans, (b) ABR Loans, or (c) a combination thereof, as determined by the Company
and notified to the Administrative Agent in accordance with subsections 3.2 and
6.2.
3.2 PROCEDURE FOR TERM LOAN BORROWING. The Company may borrow under
the Term Loan Commitments on the Closing Date, PROVIDED that the Company shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 11:00 A.M. (New York time) at least (a)
three Business Days prior to the requested Closing Date, if all or any part of
the requested Term Loans are to be initially Eurodollar Loans, or (b) one
Business Day prior to the requested Closing Date, otherwise), specifying in each
case (i) the amount to be borrowed, (ii) the requested Closing Date, (iii)
whether the borrowing is to be of Eurodollar Loans, ABR Loans or a combination
thereof and (iv) if the borrowing is to be entirely or partly of Eurodollar
Loans, the amount of such Type of Loan and the length of the initial Interest
Periods therefor. Upon receipt of any such notice from the Company, the
Administrative Agent shall promptly notify each Term Loan Lender. Not later
than 12:00 Noon (New York time) on the Closing Date each Term Loan Lender shall
make an amount equal to its Term Loan Commitment Percentage of the principal
amount of the Term Loans requested to be made on Closing Date available to the
Administrative Agent at its office specified in subsection 14.2 in U.S. Dollars
and in immediately available funds. The Administrative Agent shall on such date
credit the account of the Company on the books of such office with the aggregate
of the amounts made available to the Administrative Agent by the Term Loan
Lenders and in like funds as received by the Administrative Agent.
3.3 REPAYMENT OF TERM LOANS; EVIDENCE OF DEBT. (a) The Company hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Term Loan Lender (i) the then unpaid principal amount of the Term Loans of
such Term Loan Lender in thirteen consecutive quarterly installments, payable on
the last day of each March, June, September and December, commencing on March
31, 1998 each of which installments shall be in an aggregate amount for all Term
Loan Lenders equal to the respective amounts set forth below:
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Term Loan
Quarterly Installment Amount
--------------------- ------
1 $3,000,000
2-5 2,500,000
6-9 4,500,000
10-13 6,000,000;
PROVIDED, that if the aggregate principal amount of Term Loans is less than
$55,000,000, such undrawn amount shall be applied to reduce the foregoing
amounts ratably in accordance with the originally scheduled amounts. The
Company hereby further agrees to pay interest on the unpaid principal amount of
the Term Loans from time to time outstanding from the date hereof until payment
in full thereof at the rates per annum, and on the dates, set forth in
subsection 6.1.
(b) Each Term Loan Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Company to such
Term Loan Lender resulting from each Term Loan of such Term Loan Lender from
time to time, including the amounts of principal and interest payable and paid
to such Term Loan Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 14.6, and a subaccount therein for each Term Loan Lender, in which
Register and/or subaccounts shall be recorded (i) the amount of each Term Loan
made hereunder, the Type thereof and each Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due
and payable from the Company to each Term Loan Lender hereunder and (iii) both
the amount of any sum received by the Administrative Agent hereunder from the
Company and each Term Loan Lender's share thereof.
(d) The entries made in the Register and the accounts of each Term
Lender maintained pursuant to subsection 3.3(b) shall, to the extent permitted
by applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, HOWEVER, that the
failure of any Term Lender or the Administrative Agent to maintain the Register
or any such account, or any error therein, shall not in any manner affect the
obligation of the Company to repay (with applicable interest) the Term Loans
made to the Company by such Term Lender in accordance with the terms of this
Agreement.
(e) The Company agrees that, upon the request to the Administrative
Agent by any Term Lender, the Company will execute and deliver to such Lender a
promissory note of the Borrower evidencing the Term Loan of such Term Lender,
substantially in the form of Exhibit A-2 with appropriate insertions as to date
and principal amount (as amended, supplemented or otherwise modified from time
to time, a "TERM NOTE").
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SECTION 4. AMOUNT AND TERMS OF MULTICURRENCY
COMMITMENT
4.1 MULTICURRENCY COMMITMENTS. Subject to the terms and conditions
hereof, each Revolving Credit Lender severally agrees to make revolving credit
loans (each, a "MULTICURRENCY LOAN") in any Available Foreign Currency to the
Company or any Foreign Subsidiary Borrower from time to time during the
Revolving Credit Commitment Period so long as after giving effect thereto (a)
the Available Revolving Credit Commitment of each Revolving Credit Lender is
greater than or equal to zero and (b) the Aggregate Revolving Credit
Outstandings of all Revolving Credit Lenders do not exceed the Aggregate
Revolving Credit Commitments. During the Revolving Credit Commitment Period,
the Company or any Foreign Subsidiary Borrower may use the Revolving Credit
Commitments by borrowing, repaying the Multicurrency Loans in whole or in part,
and reborrowing, all in accordance with the terms and conditions hereof. For
the purpose of determining the Aggregate Revolving Credit Outstandings on the
date of a requested Multicurrency Loan, the U.S. Dollar Equivalent of the
Multicurrency Loan then being requested shall be aggregated with the U.S. Dollar
Equivalents of all Multicurrency Loans then outstanding (the U.S. Dollar
Equivalent of each such outstanding Multicurrency Loan to be calculated as of
the date of the most recent continuation of such Multicurrency Loan pursuant to
subsection 4.2(d) or, if not previously continued, the date of the initial
Multicurrency Loan).
4.2. MAKING THE MULTICURRENCY LOANS. (a) Each Multicurrency Loan
shall be made on notice, given by the Company to the Administrative Agent not
later than 11:00 A.M. (New York time) on the third Business Day prior to the
date of the proposed Multicurrency Loan. Each such notice (a "Notice of
Borrowing") shall be in substantially the form of Exhibit J-1, specifying
therein (i) the name of the Borrower, (ii) the date of such proposed
Multicurrency Loan, (iii) the Available Foreign Currency of such Multicurrency
Loan, (iv) the aggregate amount of such proposed Multicurrency Loan and (v) the
initial Interest Period for such Multicurrency Loan.
(b) The Administrative Agent shall give to each Revolving Credit
Lender prompt notice of the Administrative Agent's receipt of a Notice of
Borrowing. Each Revolving Credit Lender shall, before 11:00 A.M. (New York
time) on the date of the proposed Multicurrency Loan, make available to the
account of the Administrative Agent referred to on Schedule III hereto for the
Available Foreign Currency for such Multicurrency Loan (or such other locations
in the same country as may be notified to the Borrowers and Revolving Credit
Lenders by the Administrative Agent), in immediately available funds, such
Revolving Credit Lender's Revolving Credit Commitment Percentage of such
proposed Multicurrency Loan in the applicable Available Foreign Currency of such
Multicurrency Loan. After the Administrative Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Section 8, the
Administrative Agent will make such funds available to the applicable Borrower
at the Administrative Agent's aforesaid addresses.
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(c) Each Multicurrency Loan shall be in an amount in an Available
Foreign Currency of which the U.S. Dollar Equivalent is equal to at least
$1,000,000 (or, if the then Aggregate Available Revolving Credit Commitments are
less than $1,000,000, such lesser amount).
(d) At least three Business Days' prior to the end of each Interest
Period, the Company shall give the Administrative Agent notice, in substantially
the form of Exhibit J-2 to this Agreement (a "Notice of Continuation"), not
later than 11:00 A.M. (New York time) specifying the duration of the next
succeeding Interest Period. The Administrative Agent shall promptly notify each
Revolving Credit Lender of its receipt of a Notice of Continuation and the
contents thereof. If, within the time period required under the terms of this
subsection 4.2(d), the Administrative Agent does not receive a Notice of
Continuation from the Company, then, upon the expiration of the Interest Period
therefor, the applicable Interest Period in respect of such Multicurrency Loans
shall be automatically deemed to be a period of one month commencing on the last
day of the immediately preceding Interest Period and ending one month
thereafter. Notwithstanding the first sentence of this subsection 4.2(d), no
Multicurrency Loans shall be continued in accordance with a Notice of
Continuation given if, on the date of the Notice of Continuation, the Borrowers
are not in compliance with subsection 4.1, unless, one or more of the Borrowers
shall repay the Multicurrency Loans, together with all accrued interest on the
amount prepaid, such that the Borrowers are in compliance with subsection 4.1.
Notwithstanding the foregoing, upon the expiration of any Interest Period with
respect to any Multicurrency Loan at any time at which a Default or Event of
Default shall have occurred and be continuing, the applicable Interest Period in
respect of such Multicurrency Loans shall be automatically deemed to be a period
of one month commencing on the last day of the immediately preceding Interest
Period and ending one month thereafter. Each Notice of Continuation shall be
irrevocable.
4.3 REPAYMENT OF MULTICURRENCY LOANS; EVIDENCE OF DEBT. (a) The
Company and each Foreign Subsidiary Borrower hereby unconditionally promises to
pay to the Administrative Agent for the account of each Revolving Credit Lender
the then unpaid principal amount of each Multicurrency Loan of such Revolving
Credit Lender to the Company or such Foreign Subsidiary Borrower on the
Revolving Credit Termination Date and on such other date(s) and in such other
amounts as may be required from time to time pursuant to this Agreement. Each
of the Company and each Foreign Subsidiary Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Multicurrency Loans advanced to
it and from time to time outstanding until payment thereof in full at the rates
per annum, and on the dates, set forth in subsection 6.1.
(b) Each Revolving Credit Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Company and
each Foreign Subsidiary Borrower to such Revolving Credit Lender resulting from
each Multicurrency Loan of such Revolving Credit Lender from time to time,
including the amounts of principal and interest payable thereon and paid to such
Revolving Credit Lender from time to time under this Agreement.
26
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 14.6(d), and a subaccount therein for each Revolving Credit Lender,
in which shall be recorded (i) the amount of each Multicurrency Loan made
hereunder, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Company and each Foreign Subsidiary Borrower to
each Revolving Credit Lender hereunder in respect of the Multicurrency Loans and
(iii) both the amount of any sum received by the Administrative Agent hereunder
from the Company and each Foreign Subsidiary Borrower in respect of the
Multicurrency Loans and each Revolving Credit Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Revolving Credit Lender maintained pursuant to subsection 4.3(b) shall, to the
extent permitted by applicable law, be PRIMA FACIE evidence of the existence and
amounts of the obligations of the Company and each Foreign Subsidiary Borrower
therein recorded; PROVIDED, HOWEVER, that the failure of any Revolving Credit
Lender or the Administrative Agent to maintain the Register or any such account,
or any error therein, shall not in any manner affect the obligation of the
Company or such Foreign Subsidiary Borrower to repay (with applicable interest)
the Multicurrency Loans made to the Company or such Foreign Subsidiary Borrower
by such Revolving Credit Lender in accordance with the terms of this Agreement.
SECTION 5. LETTERS OF CREDIT
5.1 LETTERS OF CREDIT. Subject to the terms and conditions of this
Agreement, the Issuing Lender, agrees, on behalf of the Revolving Credit
Lenders, and in reliance on the agreement of the Revolving Credit Lenders set
forth in subsection 5.3, to issue for the account of the Company letters of
credit in an aggregate face amount, together with any unpaid Reimbursement
Obligations, not to exceed $10,000,000 at any time outstanding, as follows:
(i) standby letters of credit (collectively, the "STANDBY LETTERS OF
CREDIT") in a form reasonably satisfactory to the Issuing Lender and in
favor of such beneficiaries as the Company shall specify from time to time
(which shall be reasonably satisfactory to the Issuing Lender); and
(ii) commercial letters of credit in the form of the Issuing Lender's
standard commercial letters of credit ("COMMERCIAL LETTERS OF CREDIT") in
favor of sellers of goods or services to the Company or its Subsidiaries
(the Standby Letters of Credit and Commercial Letters of Credit being
referred to collectively as the "LETTERS OF CREDIT");
PROVIDED that on the date of the issuance of any Letter of Credit, and after
giving effect to such issuance, the Aggregate Revolving Credit Outstandings of
all Revolving Credit Lenders do not exceed the Aggregate Revolving Credit
Commitments at such time. Each Standby Letter of Credit shall (i) have an
expiry date no later than one year from the date of issuance thereof or, if
earlier, five Business Days prior to the Revolving Credit Termination Date, (ii)
be denominated in U.S. Dollars and (iii) be in a minimum face amount of
$100,000. Each
27
Commercial Letter of Credit shall (i) provide for the payment of sight drafts
when presented for honor thereunder, or of time drafts, in each case in
accordance with the terms thereof and when accompanied by the documents
described or when such documents are presented, as the case may be, (ii) be
denominated in U.S. Dollars and (iii) have an expiry date no later than six
months from the date of issuance thereof or, if earlier, five Business Days
prior to the Revolving Credit Termination Date.
5.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. The Company may from
time to time request, upon at least three Business Days' notice, the Issuing
Lender to issue a Letter of Credit by delivering to the Issuing Lender at its
address specified in subsection 14.2 a Letter of Credit Application, completed
to the satisfaction of such Issuing Lender, together with such other
certificates, documents and other papers and information as such Issuing Lender
may reasonably request. Upon receipt of any Letter of Credit Application from
the Company, the Issuing Lender will promptly, but in no event later than five
Business Days following receipt of such Letter of Credit Application, notify
each Revolving Credit Lender thereof. Upon receipt of any Letter of Credit
Application, the Issuing Lender will process such Letter of Credit Application,
and the other certificates, documents and other papers delivered in connection
therewith, in accordance with its customary procedures and shall promptly issue
such Letter of Credit (but in no event earlier than three Business Days after
receipt by the Issuing Lender of the Letter of Credit Application relating
thereto) by issuing the original of such Letter of Credit to the beneficiary
thereof and by furnishing a copy thereof to the Company and the Participating
Lenders. Prior to the issuance of any Letter of Credit, the Issuing Lender will
confirm with the Administrative Agent that the issuance of such Letter of Credit
is permitted pursuant to Section 5 and subsection 8.2. Additionally, the
Issuing Lender and the Company shall inform the Administrative Agent of any
modifications made to outstanding Letters of Credit, of any payments made with
respect to such Letters of Credit, and of any other information regarding such
Letters of Credit as may be reasonably requested by the Administrative Agent, in
each case pursuant to procedures established by the Administrative Agent.
5.3 PARTICIPATING INTERESTS. Effective as of the date of the issuance
of each Letter of Credit, the Issuing Lender agrees to allot, and does allot, to
each other Revolving Credit Lender, and each such Revolving Credit Lender
severally and irrevocably agrees to take and does take, a Participating Interest
in such Letter of Credit and the related Letter of Credit Application in a
percentage equal to such Revolving Credit Lender's Revolving Credit Commitment
Percentage. On the date that any Purchasing Lender becomes a party to this
Agreement in accordance with subsection 14.6, Participating Interests in any
outstanding Letter of Credit held by the Revolving Credit Lender from which such
Purchasing Lender acquired its interest hereunder shall be proportionately
reallotted between such Purchasing Lender and such transferor Revolving Credit
Lender. Each Participating Lender hereby agrees that its obligation to
participate in each Letter of Credit issued in accordance with the terms hereof
and to pay or to reimburse the Issuing Lender in respect of such Letter of
Credit for its participating share of the drafts drawn thereunder shall be
irrevocable and unconditional; PROVIDED that no Participating Lender shall be
liable for the payment of any
28
amount under subsection 5.4(b) resulting solely from the Issuing Lender's gross
negligence or willful misconduct.
5.4 PAYMENTS. (a) The Company agrees (i) to reimburse the
Administrative Agent for the account of the Issuing Lender, forthwith upon its
demand and otherwise in accordance with the terms of the Letter of Credit
Application, if any, relating thereto, for any payment made by the Issuing
Lender under any Letter of Credit and (ii) to pay to the Administrative Agent
for the account of such Issuing Lender, interest on any unreimbursed portion of
any such payment from the date of such payment until reimbursement in full
thereof at a fluctuating rate per annum equal to the rate then borne by
Revolving Credit Loans that are ABR Loans pursuant to subsection 6.1(b) plus 2%.
(b) In the event that the Issuing Lender makes a payment under any
Letter of Credit and is not reimbursed in full therefor, forthwith upon demand
of the Issuing Lender, and otherwise in accordance with the terms hereof or of
the Letter of Credit Application, if any, relating to such Letter of Credit, the
Issuing Lender will promptly through the Administrative Agent notify each
Participating Lender that acquired its Participating Interest in such Letter of
Credit from the Issuing Lender. No later than the close of business on the date
such notice is given, each such Participating Lender will transfer to the
Administrative Agent, for the account of the Issuing Lender, in immediately
available funds, an amount equal to such Participating Lender's PRO RATA share
of the unreimbursed portion of such payment.
(c) Whenever, at any time, after the Issuing Lender has made payment
under a Letter of Credit and has received from any Participating Lender the
Participating Lender's PRO RATA share of the unreimbursed portion of such
payment, the Issuing Lender receives any reimbursement on account of such
unreimbursed portion or any payment of interest on account thereof, the Issuing
Lender will distribute to the Administrative Agent, for the account of such
Participating Lender, its PRO RATA share thereof; PROVIDED, HOWEVER, that in the
event that the receipt by the Issuing Lender of such reimbursement or such
payment of interest (as the case may be) is required to be returned, such
Participating Lender will promptly return to the Administrative Agent, for the
account of the Issuing Lender, any portion thereof previously distributed by the
Issuing Lender to it.
5.5 FURTHER ASSURANCES. The Company hereby agrees, from time to time,
to do and perform any and all acts and to execute any and all further
instruments reasonably requested by the Issuing Lender more fully to effect the
purposes of this Agreement and the issuance of the Letters of Credit issued
hereunder.
5.6 OBLIGATIONS ABSOLUTE. The payment obligations of the Company
under subsection 5.4 shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including, without limitation, the following circumstances:
29
(a) the existence of any claim, set-off, defense or other right which
the Company may have at any time against any beneficiary, or any
transferee, of any Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Lender or
any Participating Lender, or any other Person, whether in connection with
this Agreement, the transactions contemplated herein, or any unrelated
transaction;
(b) any statement or any other document presented under any Letter of
Credit opened for its account proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(c) payment by the Issuing Lender under any Letter of Credit against
presentation of a draft or certificate which does not comply with the terms
of such Letter of Credit, except payment resulting solely from the gross
negligence or willful misconduct of the Issuing Lender; or
(d) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing, except circumstances or happenings
resulting from the gross negligence or willful misconduct of the Issuing
Lender.
5.7 LETTER OF CREDIT APPLICATION. To the extent not inconsistent with
the terms of this Agreement (in which case the provisions of this Agreement
shall prevail), provisions of any Letter of Credit Application related to any
Letter of Credit are supplemental to, and not in derogation of, any rights and
remedies of the Issuing Lender and the Participating Lenders under this Section
5 and applicable law. The Company acknowledges and agrees that all rights of
the Issuing Lender under any Letter of Credit Application shall inure to the
benefit of each Participating Lender to the extent of its Revolving Credit
Commitment Percentage as fully as if such Participating Lender was a party to
such Letter of Credit Application.
5.8 PURPOSE OF LETTERS OF CREDIT. Each Standby Letter of Credit shall
be used by the Company solely (a) to provide credit support for borrowings by
the Company or its Subsidiaries, (b) to pay or secure the payment of the
principal amount of, and accrued interest on, and other obligations with respect
to, Industrial Revenue Bonds in accordance with the provisions of the indenture
related thereto, or (c) for other working capital purposes of the Company and
Subsidiaries in the ordinary course of business. Each Commercial Letter of
Credit will be used by the Company and Subsidiaries solely to provide the
primary means of payment in connection with the purchase of goods or services by
the Company and Subsidiaries in the ordinary course of business.
30
SECTION 6. GENERAL PROVISIONS
6.1 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such Interest Period
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest for each day on which it is
outstanding at a rate per annum equal to the Alternate Base Rate for such day
plus the Applicable Margin.
(c) Each Multicurrency Loan shall bear interest for each day during
each Interest Period with respect thereto at a rate per annum equal to the
Eurocurrency Rate determined for such Interest Period plus the Applicable
Margin.
(d) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) any fee or other amount payable hereunder
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such amount shall bear interest for each day after the due date
until such amount is paid in full at a rate per annum equal to (x) in the case
of principal, the rate that would otherwise be applicable thereto pursuant to
the foregoing provisions of this subsection plus 2% or (y) in the case of any
such overdue interest, fee or other amount, the rate described in paragraph (b)
of this subsection plus 2%. if any Event of Default other than as described in
the preceding sentence shall occur and be continuing, and the Majority Lenders
shall give notice to the Company that this sentence shall apply, then, until
such Event of Default shall be cured or waived or such notice shall be
withdrawn, the outstanding principal amount of all Loans shall bear interest at
2% above the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection (other than the first sentence of this
paragraph (d)).
(e) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (d) of this
subsection shall be payable from time to time on demand.
6.2 CONVERSION AND CONTINUATION OPTIONS. (a) The Company may elect
from time to time to convert outstanding Eurodollar Loans (in whole or in part)
to ABR Loans of the same Class by giving the Administrative Agent at least two
Business Days' prior irrevocable notice of such election, PROVIDED that any such
conversion of Eurodollar Loans may only be made on the last day of an Interest
Period with respect thereto. The Company may elect from time to time to convert
outstanding ABR Loans (in whole or in part) to Eurodollar Loans of the same
Class by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of conversion to
Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof. All or any part of
outstanding Eurodollar Loans and ABR Loans may be converted as provided herein,
PROVIDED that (i) no ABR Loan may be converted into a Eurodollar Loan when any
Default or Event of Default has occurred and is continuing and the
Administrative Agent or Lenders holding the majority of the outstanding
principal amount of Loans of such Class have determined that such conversion is
not appropriate, (ii) any such conversion may
31
only be made if, after giving effect thereto, subsection 6.3 shall not have been
violated, (iii) no ABR Loan may be converted into a Eurodollar Loan after the
date that is one month prior to the Revolving Credit Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Company giving
notice to the Administrative Agent of the length of the next Interest Period to
be applicable to such Loans determined in accordance with the applicable
provisions of the term "Interest Period" set forth in subsection 1.1, PROVIDED
that no Eurodollar Loan may be continued as such (i) when any Default or Event
of Default has occurred and is continuing and the Administrative Agent or
Lenders holding the majority of the outstanding principal amount of Loans of
such Class have determined that such continuation is not appropriate, (ii) if,
after giving effect thereto, subsection 6.3 would be contravened or (iii) after
the date that is one month prior to the Revolving Credit Termination Date, and
PROVIDED, FURTHER, that if the Company shall fail to give such notice or if such
continuation is not permitted pursuant to the preceding proviso such Eurodollar
Loans shall be automatically converted to ABR Loans on the last day of such then
expiring Interest Period.
(c) Any Multicurrency Loans may be continued as set forth in
subsection 4.2(d).
6.3 MINIMUM AMOUNTS OF TRANCHES. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, (i) the aggregate principal amount of the
Eurodollar Loans comprising each Tranche shall be equal to $1,000,000 or a whole
multiple of $1,000,000 in excess thereof, (ii) the aggregate principal amount of
the Multicurrency Loans comprising each Tranche shall be in an amount of which
the U.S. Dollar Equivalent is at least $1,000,000 and (iii) there shall not be
more than (ten) 10 Tranches at any one time outstanding.
6.4 OPTIONAL AND MANDATORY PREPAYMENTS. (a) The Company may at any
time and from time to time prepay Revolving Credit Loans and/or Term Loans, in
whole or in part, upon at least three Business Days' irrevocable notice to the
Administrative Agent (in the case of Eurodollar Loans) and at least one Business
Day's irrevocable notice to the Administrative Agent (in the case of ABR Loans),
specifying the date and amount of prepayment and whether the prepayment is (i)
of Revolving Credit Loans, Term Loans or a combination thereof and (ii) of
Eurodollar Loans, ABR Loans or a combination thereof, and, in each case if a
combination thereof, the amount allocable to each. Upon the receipt of any such
notice the Administrative 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. Partial prepayments of the Loans shall
be in an aggregate principal amount of $1,000,000 or a whole multiple of
$1,000,000 in excess thereof.
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(b) The Company or the Foreign Subsidiary Borrowers, as the case may
be, may at any time and from time to time prepay, without premium or penalty,
the Multicurrency Loans, in whole or in part, upon at least three Business Days'
irrevocable notice to the Administrative Agent specifying the date and amount of
prepayment. Upon the receipt of any such notice, the Administrative Agent shall
promptly notify each Revolving Credit Lender thereof. If any such notice is
given, the amount specified in such notice shall be due and payable on the date
specified therein. Partial prepayments of Multicurrency Loans shall be in an
aggregate principal amount of which the U.S. Dollar Equivalent is at least
$1,000,000.
(c) If, at any time during the Revolving Credit Commitment Period, for
any reason the Aggregate Revolving Credit Outstandings of all Revolving Credit
Lenders exceed the Aggregate Revolving Credit Commitments then in effect, or the
Aggregate Revolving Credit Outstandings of any Lender exceeds the Revolving
Credit Commitment of such Revolving Credit Lender then in effect, (i) the
Company shall, without notice or demand, immediately prepay the Revolving Credit
Loans and/or (ii) the Company or the Foreign Subsidiary Borrowers shall, without
notice or demand, immediately prepay the Multicurrency Loans, in an aggregate
principal amount at least sufficient to eliminate any such excess.
Notwithstanding the foregoing, mandatory prepayments of Revolving Credit Loans
or Multicurrency Loans that would otherwise be required pursuant to this
subsection 6.4(c) solely as a result of currency fluctuations from time to time
shall only be required to be made pursuant to this subsection 6.4 on the last
Business Day of each month on the basis of the U.S. Dollar Equivalent in effect
on such Business Day.
(d) If, subsequent to the Closing Date, the Company shall issue and
sell any Capital Stock, 75% of the Net Proceeds thereof shall be promptly
applied toward the prepayment of the Loans and reduction of the Revolving Credit
Commitments as set forth in subsection 6.4(h); PROVIDED, that (i) net proceeds
of any equity received by the Company and used to fund acquisitions within 180
days after receipt of such net proceeds shall not be required to be applied
toward prepayment of the Loans and (ii) net proceeds of any Capital Stock or
other equity received by the Company and used to prepay New Subordinated Debt or
Existing Subordinated Debt within 90 days after receipt of such net proceeds
shall not be required to be applied toward prepayment of the Loans.
(e) If, subsequent to the Closing Date, the Company or any of its
Subsidiaries shall receive Net Proceeds from any Asset Sale, 100% of such Net
Proceeds shall be promptly applied toward the prepayment of the Loans and
reduction of the Revolving Credit Commitments as set forth in subsection 6.4(h).
(f) If for any fiscal year, commencing with the fiscal year in which
the Closing Date occurs, there shall be Consolidated Excess Cash Flow for such
fiscal year, 25% of such Consolidated Excess Cash Flow (in the case of
Consolidated Excess Cash Flow for the fiscal year ending September 30, 1997) and
50% of such Consolidated Excess Cash Flow (in the case of any subsequent fiscal
year) shall be applied toward prepayment of the Loans and reduction of the
Revolving Credit Commitments as set forth in subsection 6.4(h). Each such
33
prepayment shall be made on or before the date on which the financial statements
referred to in subsection 9.1(a) in respect of such fiscal year are delivered,
but in no event later than the date by which such statements are required to be
delivered pursuant to such subsection.
(g) Each prepayment of Loans pursuant to this subsection 6.4 shall be
accompanied by accrued and unpaid interest on the amount prepaid to the date of
prepayment and any amounts payable under subsection 6.11 in connection with such
prepayment.
(h) All prepayments pursuant to subsections 6.4(d), (e) and (f) shall
be applied, FIRST, to the prepayment of the Term Loans and, SECOND, to the
permanent reduction of the Revolving Credit Facility. Each such prepayment of
the Term Loans shall be applied FIRST, to the next installment due and, SECOND,
to the remaining installments thereof ratably in accordance with the then
outstanding amounts thereof; PROVIDED, that prepayments of the Term Loans with
the proceeds of the sale of the Company's magnetics business will be applied
first toward prepayment of the next four installments due under the Term Loans
and thereafter to remaining installments under the Term Loans ratably in
accordance with the then outstanding amounts thereof. Notwithstanding the
foregoing, each holder of Term Loans shall have the right to refuse all or any
portion of such prepayment allocable to its Term Loans.
(i) All such prepayments within each Class of Loans shall be applied
first to reduce outstanding ABR Loans and any amounts remaining after such
application shall, at the option of the Company, be applied to prepay Eurodollar
Loans immediately or shall be deposited in the Prepayment Account (as defined
below). The Administrative Agent will apply any cash deposited in the
Prepayment Account (i) allocable to Term Loans to prepay Eurodollar Term Loans
and (ii) allocable to Revolving Credit Loans to prepay Eurodollar Revolving
Credit Loans, in each case on the last day of their respective Interest Periods
(or, at the direction of the Company, on any earlier date) until all outstanding
Term Loans or Revolving Credit Loans, as the case may be, have been prepaid or
until all the allocable cash held in the Prepayment Account with respect to such
Loans has been exhausted. The term "PREPAYMENT ACCOUNT" shall mean an account
established by the Company with the Administrative Agent and over which the
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal for application in accordance with this
paragraph (i). The Administrative Agent will, at the written or telephonic
request (which shall promptly be confirmed in writing) of the Company, use its
reasonable efforts to invest amounts on deposit in the Prepayment Account in the
Cash Equivalents specified in such request; PROVIDED, HOWEVER, that (i) the
Administrative Agent shall not be required to make any investment that, in its
sole judgment, would require or cause the Administrative Agent to be in, or
would result in any, violation of any law, statute, rule or regulation, (ii) the
Administrative Agent shall have no obligation to invest amounts on deposit in
the Prepayment Account if an Event of Default shall have occurred and be
continuing and (iii) no such investments shall mature after the last day of the
applicable Interest Periods of the Eurodollar Term Loans or Eurodollar Revolving
Credit Loans to be prepaid, as the case may be. The Company shall indemnify the
Administrative Agent for any losses relating to the investments so that the
amount available to prepay Eurodollar Loans on the last day of the applicable
34
Interest Periods is not less than the amount that would have been available had
no investments been made pursuant thereto. Until no Term Loans or Revolving
Credit Loans, as the case may be, are outstanding, interest or profits, if any,
on such investments shall be deposited in the Prepayment Account and reinvested
as specified above. Upon prepayment or payment in full of all Term Loans or
Revolving Credit Loans, as the case may be, any amount remaining on deposit in
the Prepayment Account with respect to such Loans shall be paid to the Company.
If the maturity of the Loans has been accelerated pursuant to Section 12, the
Administrative Agent may, in its sole discretion, apply all amounts on deposit
in the Prepayment Account to satisfy any of the Obligations. The Company hereby
grants to the Administrative Agent, for its benefit and the benefit of the
Issuing Bank and the Lenders, a security interest in the Prepayment Account.
(j) Amounts prepaid in respect of the Term Loans may not be
reborrowed.
(k) The Revolving Credit Loans shall be prepaid and the Letters of
Credit shall be cash collateralized or replaced to the extent such extensions of
credit exceed the amount of the Revolving Credit Facility.
6.5 COMMITMENT FEES; OTHER FEES. (a) The Company agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender (other than
any Revolving Credit Lender which has defaulted in its obligation to fund a Loan
under this Agreement), a commitment fee for the period from and including the
Closing Date to but excluding the Revolving Credit Termination Date (or such
earlier date on which the Revolving Credit Commitments shall terminate as
provided herein) at the rate of 1/2 of 1% per annum on the average daily
Available Revolving Credit Commitment of such Revolving Credit Lender during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December and on the Revolving Credit
Termination Date or such earlier date on which the Revolving Credit Commitments
shall terminate as provided herein, commencing on the first such date to occur
after the date hereof.
(b) The Company shall pay (without duplication of any other fee
payable under this subsection 6.5) to the Arranger, all fees separately agreed
to by the Company and the Arranger.
(c) The Company shall pay (without duplication of any other fee
payable under this subsection 6.5) to the Administrative Agent all fees
separately agreed to by the Company and the Administrative Agent.
(d) In lieu of any letter of credit commissions and fees provided for
in any Letter of Credit Application (other than any standard issuance, amendment
and negotiation fees), the Company will pay the Administrative Agent, (i) for
the account of the Issuing Lender, a non-refundable fronting fee equal to 0.25%
per annum and (ii) for the account of the Revolving Credit Lenders, a
non-refundable Letter of Credit fee equal to the Applicable Margin in respect of
Revolving Credit Loans that are Eurodollar Loans, in each case on the
35
amount available to be drawn under such Letter of Credit. Such fee shall be
payable quarterly in arrears on the last Business Day of each calendar quarter,
and shall be calculated on the average daily amount available to be drawn under
the Letters of Credit.
(e) The Company agrees to pay the Issuing Lender for its own account
its customary administration, amendment, transfer and negotiation fees charged
by the Issuing Lender in connection with its issuance and administration of
Letters of Credit.
6.6 COMPUTATION OF INTEREST AND FEES. (a) Interest and fees shall be
calculated on the basis of a 360-day year for the actual days elapsed; PROVIDED
that interest calculated at Alternate Base Rate (based on the Corporate Base
Rate included therein) shall be calculated on the basis of a 365- (or 366-, as
the case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Company and the relevant Lenders of each
determination of a Eurodollar Rate or a Eurocurrency Rate. Any change in the
interest rate on a Loan resulting from a change in the Alternate Base Rate shall
become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall as soon as practicable notify
the Company and the relevant Lenders of the effective date and the amount of
each such change in the Alternate Base Rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrowers and the Lenders in the absence of manifest error. Each
Administrative Agent shall, at the request of a Borrower, deliver to such
Borrower a statement showing in reasonable detail the calculations used by such
Administrative Agent in determining any interest rate pursuant to subsection
6.1(a).
6.7 INABILITY TO DETERMINE INTEREST RATE. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate or the
Eurocurrency Rate, as the case may be, for such Interest Period, or
(b) the Administrative Agent has received notice from the Majority
Lenders or the Majority Revolving Credit Lenders, as the case may be, that
the Eurodollar Rate or Eurocurrency Rate, as the case may be, determined or
to be determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Eurodollar
Loans or Multicurrency Loans, as the case may be, during such Interest
Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Company and the Lenders as soon as practicable thereafter. If such notice is
given (i) any Eurodollar Loans
36
or Multicurrency Loans, as the case may be, requested to be made on the first
day of such Interest Period shall be made as ABR Loans in U.S. Dollars, (ii) any
Revolving Credit or Term Loans that were to have been converted on the first day
of such Interest Period to or continued as Eurodollar Loans shall be converted
to or continued as ABR Loans, (iii) any outstanding Eurodollar Loans shall be
converted on the first day of such Interest Period to ABR Loans and (iv) any
Multicurrency Loans to which such Interest Period relates shall be repaid on the
first day of such Interest Period. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans or Multicurrency Loans shall
be made or continued as such, nor shall the Company have the right to convert
ABR Loans to Eurodollar Loans.
6.8 PRO RATA TREATMENT AND PAYMENTS. (a)(i) Each borrowing of
Revolving Credit Loans by the Company from the Revolving Credit Lenders
hereunder shall be made PRO RATA according to the Revolving Credit Commitment
Percentages of the Revolving Credit Lenders in effect on the date of such
borrowing. Each borrowing of Term Loans by the Company from the Term Loan
Lenders hereunder shall be made PRO RATA according to the Term Loan Commitment
Percentages of the Term Loan Lenders in effect on the date of such borrowing.
Each payment by the Company on account of any commitment fee hereunder shall be
allocated by the Administrative Agent among the Revolving Credit Lenders in
accordance with the respective amounts which such Revolving Credit Lenders are
entitled to receive pursuant to subsection 6.5(a). Any reduction of the
Revolving Credit Commitments or Term Loan Commitments, as the case may be, of
the Lenders shall be allocated by the Administrative Agent among the Lenders PRO
RATA according to the Revolving Credit Commitment Percentages or Term Loan
Commitment Percentages, as the case may be, of such Lenders. Except as provided
in subsection 6.4(h), each payment (other than any optional prepayment) by the
Company on account of principal of or interest in respect of Revolving Credit
Loans or Term Loans shall be allocated by the Administrative Agent PRO RATA
according to the respective principal amounts thereof then due and owing to each
Lender. Except as provided in subsection 6.4(h), each optional prepayment by
the Company on account of principal of or interest in respect of Revolving
Credit Loans or Term Loans shall be allocated by the Administrative Agent PRO
RATA according to the respective outstanding principal amounts thereof. All
payments (including prepayments) to be made by the Company in respect of
Revolving Credit Loans or Term Loans hereunder, 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 Administrative Agent, for the account of the Lenders entitled thereto, at
the Administrative Agent's office specified in subsection 4.2, in U.S. Dollars
and in immediately available funds. The Administrative Agent shall distribute
such payments to the Lenders entitled to receive the same promptly upon receipt
in like funds as received.
(ii) Each borrowing of Multicurrency Loans by the Company or any
Foreign Subsidiary Borrower shall be made PRO RATA according to the Revolving
Credit Commitment Percentages of the Revolving Credit Lenders. Each payment
(including each prepayment) by the Company or a Foreign Subsidiary Borrower on
account of principal of and interest on
37
Multicurrency Loans shall be allocated by the Administrative Agent PRO RATA
according to the respective principal amounts of the Multicurrency Loans then
due and owing by the Company or such Foreign Subsidiary Borrower to each
Revolving Credit Lender. All payments (including prepayments) to be made by the
Company or a Foreign Subsidiary Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set-off or
counterclaim and shall be made at or before the payment time for the currency of
such Multicurrency Loan, on the due date thereof to the Administrative Agent,
for the account of the Revolving Credit Lenders, at the payment office for the
currency of such Multicurrency Loan, in the currency of such Multicurrency Loan
and in immediately available funds. The Administrative Agent shall distribute
such payments to the Revolving Credit Lenders entitled to receive the same
promptly upon receipt in like funds as received.
(iii) If any payment hereunder (other than payments on the Eurodollar
Loans and the Multicurrency Loans) becomes due and payable on a day other than a
Business Day, the maturity of such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a Eurodollar Loan or a Multicurrency Loan becomes due and payable
on a day other than a Business Day, the maturity of such payment shall be
extended to the next succeeding Business Day (and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension) unless the result of such extension would be to extend such
payment into another calendar month, in which event such payment shall be made
on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a Borrowing Date that such Lender will not make
the amount that would constitute its share of such borrowing available to such
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the applicable Borrower a corresponding amount. If such amount is not made
available to the Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon at a rate per annum equal to (i) the daily average
Federal Funds Effective Rate (in the case of a borrowing of Revolving Credit
Loans or Term Loans) and (ii) the Administrative Agent's reasonable estimate of
its average daily cost of funds (in the case of a borrowing of Multicurrency
Loans), in each case for the period until such Lender makes such amount
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this subsection shall be conclusive in the absence of manifest error. If
such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such Borrowing
Date, the applicable Borrower shall repay such Lender's share of such borrowing
(together with interest thereon from the date such amount was made available to
such Borrower (i) at the rate per annum applicable to ABR Loans hereunder (in
the case of amounts made available in U.S. Dollars) and (ii) the Administrative
Agent's reasonable
38
estimate of its average daily cost of funds PLUS the Applicable Margin
applicable to Multicurrency Loans (in the case of a borrowing of Multicurrency
Loans)) to the Administrative Agent not later than three Business Days after
receipt of written notice from the Administrative Agent specifying such Lender's
share of such borrowing that was not made available to such Administrative
Agent, and the Borrower shall have the right to pursue any remedies against
such Lender for its failure to make its portion of such borrowing available.
(c) Unless the Administrative Agent shall have been notified in
writing by any Borrower prior to a date on which a payment is due from such
Borrower hereunder that such Borrower will not make such payment available to
such Administrative Agent, the Administrative Agent may assume that such
Borrower is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the applicable Lenders a corresponding amount. If such amount is not made
available to the Administrative Agent by the required time on the due date
therefor, the applicable Lender shall pay to the Administrative Agent, on
demand, such amount with interest thereon at a rate per annum equal to (i) the
daily average Federal Funds Effective Rate (in the case of a borrowing of
Revolving Credit Loans or Term Loans) and (ii) the Administrative Agent's
reasonable estimate of its average daily cost of funds (in the case of a
borrowing of Multicurrency Loans), in each case for the period until such Lender
makes such amount immediately available to the Administrative Agent. A
certificate of the Administrative Agent submitted to any Lender with respect to
any amounts owing under this subsection shall be conclusive in the absence of
manifest error.
6.9 ILLEGALITY. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans or Multicurrency Loans as contemplated by this Agreement, (a)
the commitment of such Lender hereunder to make Eurodollar Loans or
Multicurrency Loans, continue Eurodollar Loans or Multicurrency Loans as such
and convert ABR Loans to Eurodollar Loans shall forthwith be cancelled until
such time as it shall no longer be unlawful for such Lender to make or maintain
the affected Loans, (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to ABR Loans on the respective
last days of the then current Interest Periods with respect to such Eurodollar
Loans or within such earlier period as may be required by law and (c) such
Lender's Multicurrency Loans shall be prepaid on the last day of the then
current Interest Period with respect thereto or within such earlier period or
may be required by law. If any such conversion of a Eurodollar Loan or
repayment of a Multicurrency Loan occurs on a day which is not the last day of
the then current Interest Period Interest Period with respect thereto, the
Company shall pay to such Lender such amounts, if any, as may be required
pursuant to subsection 6.11.
6.10 REQUIREMENTS OF LAW. (a) In the event that the adoption of or
any change in any Requirement of Law (or in the interpretation or application
thereof) or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority:
39
(i) does or shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note, any Loans made by it or any
Letter of Credit, or change the basis of taxation of payments to such
Lender of principal, fees, interest or any other amount payable hereunder
(except for changes in the rate of tax on the overall net income of such
Lender);
(ii) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, or deposits or other liabilities in or for the account of, advances or
loans by, or other credit extended by, or any other acquisition of funds
by, any office of such Lender which are not otherwise included in the
determination of the Eurodollar Rate or Eurocurrency Rate; or
(iii) does or shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by any amount which such Lender deems to be material, of making, renewing or
maintaining advances or extensions of credit or to reduce any amount receivable
hereunder, in each case in respect of its Loans or Letters of Credit which it
issues or in which it holds Participating Interests, then, in any such case, the
applicable Borrower shall promptly pay such Lender, upon receipt of its demand
setting forth in reasonable detail, any additional amounts necessary to
compensate such Lender for such additional cost or reduced amount receivable,
such additional amounts together with interest on each such amount from the date
two Business Days after the date demanded until payment in full thereof at the
ABR. A certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by such Lender, through the Administrative Agent,
to the applicable Borrower shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and payment of all
amounts outstanding hereunder for a period of one year.
(b) In the event that any Lender shall have determined that the
adoption of any law, rule, regulation or guideline regarding capital adequacy
(or any change therein or in the interpretation or application thereof) or
compliance by any 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 central bank or Governmental Authority, including, without
limitation, the issuance of any final rule, regulation or guideline, 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 adoption, 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 Company (with a copy to the Administrative Agent) of a
written request therefor, the Company shall promptly pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.
40
(c) Any request by any Lender for compensation under this subsection
6.10 shall be accompanied by a certificate of a duly authorized officer of such
Lender setting for such information and calculations supporting such request as
such Lender shall customarily provide in similar situations.
6.11 INDEMNITY. Each Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by such Borrower in payment when due of
the principal amount of or interest on any Loans of such Lender, (b) default by
such Borrower in making a borrowing or conversion after such Borrower has given
a notice of borrowing or a notice of conversion in accordance with this
Agreement, (c) default by such Borrower in making any prepayment after such
Borrower has given a notice in accordance with this Agreement or (d) the making
of a prepayment of a Eurodollar Loan or Multicurrency Loan on a day which is not
the last day of an Interest Period with respect thereto, including, without
limitation, in each case, any such loss or expense arising from the reemployment
of funds obtained by it to maintain its Eurodollar Loans or Multicurrency Loans
hereunder or from fees payable to terminate the deposits from which such funds
were obtained, but excluding, in each case, lost profit. This covenant shall
survive termination of this Agreement and payment of all amounts outstanding
hereunder.
6.12 TAXES. (a) All payments made by any Borrower under this
Agreement shall be made free and clear of, and without reduction 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, in the case of the Administrative Agent and each Lender,
income or franchise taxes imposed on the Administrative Agent or such Lender by
the jurisdiction under the laws of which the Administrative Agent or such Lender
is organized or any political subdivision or taxing authority thereof or therein
or by any jurisdiction in which such Lender's lending office is located or any
political subdivision or taxing authority thereof or therein or as a result of a
connection between such Lender and any jurisdiction other than a connection
resulting solely from entering into this Agreement (all such non-excluded taxes,
levies, imposts, deductions, charges or withholdings being thereinafter called
"NON-EXCLUDED TAXES"). Subject to the provisions of subsection 6.12(c), if any
Non-Excluded Taxes are required to be withheld from any amounts payable by such
Borrower to the Administrative Agent or any Lender hereunder or under the Notes,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes. Whenever any Non-Excluded Taxes are paid by any
Borrower with respect to payments made in connection with this Agreement, as
promptly as possible thereafter, such Borrower shall send to the Administrative
Agent for its own account or for the account of such Lender, as the case may be,
a certified copy of an original official receipt received by such Borrower
showing payment thereof. Subject to the provisions of subsection 6.12(c), if
any Borrower fails to pay any Non-Excluded Taxes when due to the appropriate
41
taxing authority or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, such Borrower shall indemnify
the Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lenders as
a result of any such failure.
(b) Each Lender that is not incorporated or organized under the laws
of the United States of America or a state thereof agrees that, prior to the
first date any payment is due to be made to it hereunder or under any Note, it
will deliver to the Company and the Administrative Agent (A) if such Lender is a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, (i) two valid,
duly completed copies of United States Internal Revenue Service Form 1001 or
4224 or successor applicable form, as the case may be, certifying in each case
that such Lender is entitled to receive payments by the Borrower under this
Agreement and the Notes payable to it, without deduction or withholding of any
United States federal income taxes, and (ii) a valid, duly completed Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as the case may
be, to establish an exemption from United States backup withholding tax or (B)
if such Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224, (i) a
certificate substantially in the form of Exhibit I (a "TAX STATUS CERTIFICATE")
and (ii) two completed and signed copies of Internal Revenue Service Form W-8 or
successor applicable form, to establish in each case that such Lender is
entitled to receive payments by the Borrowers under this Agreement and the other
Loan Documents without deduction or withholding of any United States federal
income taxes. Each Lender which delivers to the Company and the Administrative
Agent a Form 1001 or 4224 and Form W-8 or W-9 pursuant to the next preceding
sentence further undertakes to deliver to the Company and the Administrative
Agent two further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms, or other manner or certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
otherwise is required to be resubmitted as a condition to obtaining an exemption
from withholding tax, or after the occurrence of any event requiring a change in
the most recent form previously delivered by it to the Company, and such
extensions or renewals thereof as may reasonably be requested by the Company,
certifying in the case of a Form 1001 or 4224 that such Lender is entitled to
receive payments by the Company under this Agreement without deduction or
withholding of any United States federal income taxes, unless any change in
treaty, law or regulation or official interpretation thereof 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 letter or form with respect to it and such
Lender advises the Company that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax, and in the
case of a Form W-8 or W-9, establishing an exemption from United States backup
withholding tax.
(c) The Company shall not be required to pay any additional amounts to
the Administrative Agent or any Lender (or Transferee except to the extent such
Transferee's transferor was entitled, at the time of transfer, to receive
additional amounts from the Company) in respect of United States withholding tax
pursuant to subsection 6.12(a) if (i) the
42
obligation to pay such additional amounts would not have arisen but for a
failure by the Administrative Agent or such Lender (or Transferee) to comply
with the requirements of subsection 6.12(b) (or in the case of a Transferee, the
requirements of subsection 14.6(h)).
(d) Each Revolving Credit Lender that is not incorporated or organized
under the laws of the jurisdiction under which a Foreign Subsidiary Borrower is
incorporated or organized shall, upon request by such Foreign Subsidiary
Borrower, within a reasonable period of time after such request, deliver to such
Foreign Subsidiary Borrower or the applicable governmental or taxing authority,
as the case may be, any form or certificate required in order that any payment
by such Foreign Subsidiary Borrower under this Agreement to such Lender may be
made free and clear of, and without deduction or withholding for or on account
of any Non-Excluded Taxes (or to allow any such deduction or withholding to be
at a reduced rate) imposed on such payment under the laws of the jurisdiction
under which such Foreign Subsidiary Borrower is incorporated or organized,
PROVIDED that such Revolving Credit Lender is legally entitled to complete,
execute and deliver such form or certificate and such completion, execution or
submission would not materially prejudice the legal position of such Revolving
Credit Lender.
(e) Except as otherwise provided in subsection 6.14(a), each Lender
agrees to use reasonable efforts (including reasonable efforts to change its
lending office) to avoid or to minimize any amounts which might otherwise be
payable pursuant to this subsection 6.12; PROVIDED, HOWEVER, that such efforts
shall not impose on such Lender any additional costs or legal or regulatory
burdens deemed by such Lender in its sole judgment to be material.
(f) The agreements in subsection 6.12(a) shall survive the termination
of this Agreement and the payment of the Notes and all other amounts payable
hereunder until the expiration of the applicable statute of limitations for such
taxes.
6.13 USE OF PROCEEDS. The proceeds of the Term Loans shall be used to
refinance the Senior Notes, to pay related fees and expenses and for general
corporate and working capital purposes of the Company and its Subsidiaries. The
proceeds of the Revolving Credit Loans and the Multicurrency Loans shall be used
for the general working capital and general corporate purposes of the Company
and its Subsidiaries. The Letters of Credit shall be used for the general
working capital purposes of the Company and its Subsidiaries.
6.14 CHANGE IN LENDING OFFICE; REPLACEMENT OF LENDER. (a) Each Lender
agrees that if it makes any demand for payment under subsection 6.10 or 6.12(a),
or if any adoption or change of the type described in subsection 6.9 shall occur
with respect to it, it will use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions and so long as such efforts would
not be disadvantageous to it, as determined in its sole discretion) to designate
a different lending office if the making of such a designation would reduce or
obviate the need for any Borrower to make payments under subsection 6.10 or
6.12(a), or would eliminate or reduce the effect of any adoption or change
described in subsection 6.9.
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(b) If any Lender requests any payment under subsection 6.10 or
6.12(a), the Borrower shall have the right (i) to replace such Lender with one
or more replacement lenders, each of which shall be reasonably acceptable to the
Administrative Agent, or (ii) to replace only the Revolving Credit Commitments
(and outstanding Extensions of Credit thereunder) or only the Term Loan
Commitments (or Term Loans), as the case may be, with identical Commitments
and/or Loans of one or more replacement lenders, each of which shall be
reasonably acceptable to the Administrative Agent.
SECTION 7. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Loans, and to induce the Issuing Lender to issue Letters of Credit, each
Borrower hereby represents and warrants to the Administrative Agent and to each
Lender that:
7.1 FINANCIAL CONDITION. (a) The consolidated balance sheet of the
Company and its consolidated Subsidiaries as at September 30, 1996 and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by Xxxxxx Xxxxxxxx LLP, copies of which have
heretofore been furnished to each Lender, are complete and correct in all
material respects and present fairly the consolidated financial condition of the
Company 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 sheets of the Company and
its consolidated Subsidiaries as at December 31, 1996 and the related unaudited
consolidated statements of income and of cash flows for the nine-month period
ended on such date, certified by the chief financial officer of the Company,
copies of which have heretofore been furnished to each Lender, are complete and
correct in all material respects 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 respective nine-month period then ended (subject to normal year-end
audit adjustments). All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by such
accountants or chief financial officer, as the case may be, and as disclosed
therein). [[Except as set forth on Schedule 7.1]], neither the Company 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 September 30, 1996 to and
including the date hereof there has been no sale, transfer or other disposition
by the Company 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 Company and
44
its consolidated Subsidiaries at September 30, 1996, other than the sale of
inventory in the ordinary course of business.
(b) The unaudited PRO FORMA balance sheets of the Company and its
consolidated Subsidiaries as at December 31, 1996, certified by a Responsible
Officer of the Company (collectively, the "PRO FORMA BALANCE SHEET"), copies of
which have been furnished to each Lender, are the unaudited consolidated and
consolidating balance sheets of the Company and its consolidated Subsidiaries,
adjusted to give effect (as if such events had occurred on such date) to the
incurrence of the Loans and the use of the proceeds thereof on the Closing Date.
The Pro Forma Balance Sheet, together with the notes thereto, was prepared in
accordance with GAAP and reflects on a PRO FORMA basis the financial position of
the Company and its consolidated Subsidiaries as of December 31, 1996, as
adjusted as described above, assuming that the events specified in the preceding
sentence had actually occurred at such date.
7.2 NO CHANGE. Since September 30, 1996 there has been no development
or event which has had or could reasonably be expected to have a Material
Adverse Effect.
7.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Loan Party (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 except to the extent
that the failure to be so qualified in any such jurisdiction could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect, and (d) is
in compliance with all Requirements of Law except to the extent that the failure
to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
7.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents 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 and any Notes and to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. 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. This
Agreement has been, and each other Loan Document to which it is a party will be,
duly executed and delivered on behalf of each Loan Party that is a party hereto
or thereto. 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 each Loan Party that is a party hereto or thereto
enforceable against such Loan Party in accordance with its terms, subject to the
effects of bankruptcy, insolvency,
45
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
7.5 NO LEGAL BAR. The execution, delivery and performance of the Loan
Documents, the borrowings hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or Contractual Obligation of any Loan Party 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.
7.6 NO MATERIAL LITIGATION. Except as set forth on Schedule 7.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Loan Parties,
threatened by or against any Loan Party 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 reasonably be expected to have a Material Adverse Effect.
7.7 NO DEFAULT. No Loan Party nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
7.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Loan Parties 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, except to the extent that the
failure to have such title would not have a Material Adverse Effect, and none of
such property is subject to any Lien except as permitted by subsection 10.3.
With respect to real property or interests in real property, as of the Closing
Date, the Company has (i) fee title to all of the real property listed on
Schedule 7.8 under the heading "Fee Properties" (each, a "FEE PROPERTY"), and
(ii) good and valid title to the leasehold estates in all of the real property
leased by it and listed on Schedule 7.8 under the heading "Leased Properties"
(each, a "LEASED PROPERTY"), in each case free and clear of all mortgages,
liens, security interests, easements, covenants, rights-of-way and other similar
restrictions of any nature whatsoever, except (A) Liens permitted pursuant to
subsection 10.3, (B) as to Leased Property, the terms and provisions of the
respective lease therefor and any matters affecting the fee title and any estate
superior to the leasehold estate related thereto, and (C) title defects, or
leases or subleases granted to others, which are not material to the Fee
Properties or the Leased Properties, as the case may be, taken as a whole. The
Fee Properties and the Leased Properties constitute, as of the Closing Date, all
of the real property owned in fee or leased by the Company.
7.9 INTELLECTUAL PROPERTY. Each Loan Party and each of its
Subsidiaries owns, or is licensed to use or otherwise has the right to use, all
trademarks, tradenames, copyrights,
46
patents, trade secrets and other proprietary information that it uses in the
conduct of its business as currently conducted except for those the failure to
own or license which could not reasonably be expected to have a Material Adverse
Effect (the "INTELLECTUAL PROPERTY"). To the knowledge of each Loan Party, 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 enforceability of
any such Intellectual Property, nor does any Loan Party know of any valid basis
for any such claim. The use of such Intellectual Property by each Loan Party
and its Subsidiaries does not infringe on the rights of any Person, except for
such claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
7.10 NO BURDENSOME RESTRICTIONS. No Contractual Obligation of any
Loan Party or any of its Subsidiaries could reasonably be expected to have a
Material Adverse Effect.
7.11 TAXES. Each Loan Party and each of its Subsidiaries has filed or
caused to be filed all material tax returns which, to the knowledge of the Loan
Parties, 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 such Loan Party or its Subsidiaries, as the case may be); no tax Lien
has been filed, and, to the knowledge of the Loan Parties, no claim is being
asserted, with respect to any such tax, fee or other charge.
7.12 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 G or Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. If requested by any Lender or the Administrative Agent,
the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-1 or FR Form U-1 referred to in said Regulation G or Regulation U, as the case
may be.
7.13 ERISA. Neither the Company nor any Commonly Controlled Entity
has any liability in respect of any Multiemployer Plan.
7.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. The Company 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
Company is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
47
7.15 SUBSIDIARIES. Schedule IV sets forth all Subsidiaries of the
Company as of the Closing Date.
7.16 ENVIRONMENTAL MATTERS. Except to the extent that all of the
following, taken together, could not reasonably be expected to result in a
Material Adverse Effect or to result in the payment of Material Environmental
Amount:
(a) The facilities and properties owned, leased or operated by each
Loan Party 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 reasonably be expected to give rise to
liability under, any Environmental Law.
(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 any Loan Party 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 any Loan Party 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 any Loan Party 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 reasonably be expected to give rise to 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 or elsewhere in violation of, or in a manner that could
reasonably be expected to give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Loan Parties, threatened, under any
Environmental Law to which any Loan Party or any Subsidiary thereof 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.
48
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related
to the operations of any Loan Party or any Subsidiary thereof in connection
with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that could reasonably give rise
to liability under Environmental Laws.
7.17 SOLVENCY. Each Loan Party is, and after giving effect to the
consummation of any Acquisition and to the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith will be and will
continue to be, Solvent.
7.18 SECURITY DOCUMENTS. (a) The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Lenders, a legal, valid and enforceable security interest in the Collateral
described, and as defined, therein and proceeds thereof, and, after taking the
actions described in Schedule 3 thereto, the Guarantee and Collateral Agreement
shall at all times constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the Loan Parties in such Collateral and the
proceeds thereof, as security for the Secured Obligations (as defined in the
Guarantee and Collateral Agreement), in each case prior and superior in right to
any other Person, other than with respect to Liens expressly permitted by
subsection 10.3.
(b) Each Mortgage is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the collateral described therein, and upon
filing the Mortgages in the jurisdictions listed on Schedule V, such security
interests will constitute perfected liens on, and security interests in, all
right, title and interest of the debtor party thereto in the collateral
described therein.
7.19 REGULATION H. No Mortgage encumbers improved real property which
is located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act
of 1968.
7.20 ACCURACY OF INFORMATION. No statement or information contained
in this Agreement, any other Loan Document or any other document, certificate or
statement furnished in writing to the Administrative Agent, the Arranger or the
Lenders or any of them, by or on behalf of any Loan Party for use in connection
with the transactions contemplated by this Agreement or the other Loan
Documents, taken as a whole together with all other information provided in this
Agreement, the other Loan Documents or any other such document, certificate or
statement, contained as of the date such statement, information, document or
certificate was so furnished any untrue statement of any fact material to the
interests of the Administrative Agent or any Lender, or omitted to state a fact
necessary in order to make the statements contained herein or therein not
misleading in any respect material to the interests of the Administrative Agent
or any Lender. There is no fact known to any Loan Party that could reasonably
be expected to have a Material Adverse Effect that has not been expressly
disclosed herein, in the other Loan Documents or in such other documents,
49
certificates and statements furnished to the Administrative Agent, the Arranger
and the Lenders for use in connection with the transactions contemplated hereby
and by the other Loan Documents.
SECTION 8. CONDITIONS PRECEDENT
8.1 CONDITIONS TO CLOSING DATE. The Closing Date shall occur on the
date of satisfaction of the following conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of each
of the Borrowers, with a counterpart for each Lender,(ii) the Guarantee and
Collateral Agreement, executed and delivered by a duly authorized officer
of the party thereto, with a counterpart or a conformed copy for each
Lender and (iii) the Mortgage executed and delivered by a duly authorized
officer of the party thereto, with a counterpart or a conformed copy for
each Lender.
(b) BORROWING CERTIFICATE. The Administrative Agent shall have
received, with a copy for each Lender, a certificate of the Company, dated
the Closing Date, substantially in the form of Exhibit H with appropriate
insertions and attachments, satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President and
the Secretary or any Assistant Secretary of the Company.
(c) CORPORATE PROCEEDINGS OF THE COMPANY. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of the Company authorizing (i) the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, (ii) the borrowings contemplated
hereunder and (iii) the granting by it of the Liens created pursuant to the
Security Documents to which the Company is a party, certified by the
Secretary or an Assistant Secretary of the Company as of the Closing Date,
which certificate shall be in form and substance satisfactory to the
Administrative Agent and shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded.
(d) COMPANY INCUMBENCY CERTIFICATE. The Administrative Agent shall
have received, with a counterpart for each Lender, a Certificate of the
Company, dated the Closing Date, as to the incumbency and signature of the
officers of the Company executing any Loan Document satisfactory in form
and substance to the Administrative Agent, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of the Company.
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(e) CORPORATE PROCEEDINGS OF SUBSIDIARIES. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of each Subsidiary of the Company which is
a party to a Loan Document authorizing (i) the execution, delivery and
performance of the Loan Documents to which it is a party and (ii) the
granting by it of the Liens created pursuant to the Security Documents to
which it is a party, certified by the Secretary or an Assistant Secretary
of each such Subsidiary as of the Closing Date, which certificate shall be
in form and substance satisfactory to the Administrative Agent and shall
state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(f) SUBSIDIARY INCUMBENCY CERTIFICATES. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate of
each Subsidiary of the Borrower which is a Loan Party, dated the Closing
Date, as to the incumbency and signature of the officers of such
Subsidiaries executing any Loan Document, satisfactory in form and
substance to the Administrative Agent, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of each such
Subsidiary.
(g) CORPORATE DOCUMENTS. The Administrative Agent shall
have received, with a counterpart for each Lender, true and complete copies
of the certificate of incorporation and by-laws of each Loan Party,
certified as of the Closing Date as complete and correct copies thereof by
the Secretary or an Assistant Secretary of such Loan Party.
(h) RECAPITALIZATION. The Senior Notes shall have been repaid in full
and all Liens securing the obligations thereunder shall have been released.
(i) FEES. The Arranger and the Administrative Agent and the Lenders
shall have received all invoiced fees and expenses required to be paid on
the Closing Date.
(j) LEGAL OPINIONS. The Administrative Agent shall have received,
with a counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinion of Cadwalader, Xxxxxxxxxx & Xxxx,
counsel to the Company and the other Loan Parties, substantially in
the form of Exhibit F-1; and
(ii) the executed legal opinion of Leagre & Xxxxxx, special
Indiana counsel to the Company and the other Loan Parties,
substantially in the form of Exhibit F-2;
each such legal opinion to cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
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(k) FINANCIAL STATEMENTS. The Administrative Agent shall have
received, with a copy for each Lender, (i) audited consolidated financial
statements of the Company and its consolidated Subsidiaries for the three
most recent fiscal years ended prior to the Closing Date and unaudited
consolidated financial statements of the Company and its consolidated
Subsidiaries, reasonably satisfactory to the Lenders and certified by the
chief financial officer of the Company, for the three months ended December
31, 1996, and (ii) unaudited interim consolidated financial statements of
the Company and its consolidated Subsidiaries for each fiscal month and
quarterly period ended subsequent to the date of the latest financial
statements delivered pursuant to clause (i) of this paragraph as to which
such financial statements are available, reasonably satisfactory to the
Lenders and certified by the chief financial officer of the Company, all
such financial statements, including the related schedules and notes
thereto, having been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by such accountants or
chief financial officer, as the case may be, and as disclosed therein).
(l) PRO FORMA BALANCE SHEET. The Administrative Agent shall have
received, with a copy for each Lender, the Pro Forma Balance Sheet
described in subsection 7.1(b).
(m) BUSINESS PLAN. The Administrative Agent shall have received, with
a copy for each Lender, a business plan for fiscal years 1996 - 2001
reasonably satisfactory to the Lenders.
(n) ENVIRONMENTAL REPORTS AND ANALYSIS. The Administrative Agent
shall have received, with a counterpart for each Lender, such environmental
reports and analysis relating to environmental matters with respect to the
real property owned or leased by the Company and its Subsidiaries, which
the Administrative Agent, in its discretion, shall have requested.
(o) APPRAISALS. The Administrative Agent shall have received
satisfactory appraisals in respect of each parcel of real property covered
by a Mortgage.
(p) PLEDGED STOCK; STOCK POWERS. The Administrative Agent shall have
received the certificates representing the shares pledged pursuant to the
Guarantee and Collateral Agreement, together with an undated stock power
for each such certificate executed in blank by a duly authorized officer of
the pledgor thereof. All actions required to perfect the security interest
in the pledged stock of the Foreign Subsidiaries listed in Item 1 of
Schedule VI created pursuant to the Guarantee and Collateral Agreement
shall have been taken.
(q) ACTIONS TO PERFECT LIENS. The Administrative Agent shall have
received evidence in form and substance satisfactory to it that all
filings, recordings, registrations and other actions, including, without
limitation, the filing of duly executed
52
financing statements on form UCC-1, necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Liens created by the
Security Documents shall have been completed.
(r) LIEN SEARCHES. The Administrative Agent shall have received the
results of a recent search by a Person satisfactory to the Administrative
Agent, of the Uniform Commercial Code, judgement and tax lien filings which
may have been filed with respect to personal property of the Company and
its Subsidiaries in each of the jurisdictions and offices where assets of
the Company and its Subsidiaries are located or recorded, and such search
shall reveal no material liens on any of the assets of the Borrower or its
Subsidiaries except for liens permitted by the Loan Documents.
(s) SURVEYS. The Administrative Agent shall have received (or shall
receive within 10 Business Days after the Closing Date), and the title
insurance company issuing the policy referred to in subsection 8.1(t) (the
"TITLE INSURANCE COMPANY") shall have received, maps or plats of an
as-built survey of the sites of the property covered by each Mortgage
certified to the Administrative Agent and the Title Insurance Company in a
manner satisfactory to them, dated a date satisfactory to the
Administrative Agent and the Title Insurance Company by an independent
professional licensed land surveyor satisfactory to the Administrative
Agent and the Title Insurance Company, which maps or plats and the surveys
on which they are based shall be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the generality of the
foregoing, there shall be surveyed and shown on such maps, plats or surveys
the following: (i) the locations on such sites of all the buildings,
structures and other improvements and the established building setback
lines; (ii) the lines of streets abutting the sites and width thereof;
(iii) all access and other easements appurtenant to the sites 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.
(t) TITLE INSURANCE POLICY. The Administrative Agent shall have
received in respect of each parcel covered by each Mortgage a mortgagee's
title policy (or policies) or marked up unconditional binder for such
insurance dated the Closing Date. Each such policy shall (i) be in an
amount satisfactory to the Administrative Agent; (ii) be issued at ordinary
rates; (iii) insure that the Mortgage insured thereby creates a valid first
Lien on such parcel free and clear of all defects and encumbrances, except
such as may be approved by the Administrative Agent; (iv) name the
Administrative Agent for the benefit of the Lenders as the insured
thereunder; (v) be in the form of ALTA Loan Policy - 1970 (Amended
10/17/70); (vi) contain such endorsements and affirmative
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coverage as the Administrative Agent may request and (vii) be issued by
title companies satisfactory to the Administrative Agent (including any
such title companies acting as co-insurers or reinsurers, at the option of
the Administrative Agent). The Administrative Agent shall have received
evidence satisfactory to it that all premiums in respect of each such
policy, and all charges for mortgage recording tax, if any, have been paid.
(u) FLOOD INSURANCE. If requested by the Administrative Agent, the
Administrative Agent shall have received (i) a policy of flood insurance
which (A) covers any parcel of improved real property which is encumbered
by any Mortgage, (B) is written in an amount not less than the outstanding
principal amount of the indebtedness secured by such 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 under the
Act, whichever is less, and (C) has a term ending not later than the
maturity of the indebtedness secured by such Mortgage and (ii) confirmation
that the Borrower has received the notice required pursuant to Section
208(e)(3) of Regulation H of the Board of Governors of the Federal Reserve
System.
(v) COPIES OF DOCUMENTS. The Administrative Agent shall have received
a copy of all recorded documents referred to, or listed as exceptions to
title in, the title policy or policies referred to in subsection 8.1(t) and
a copy, certified by such parties as the Administrative Agent may deem
appropriate, of all other documents affecting the property covered by each
Mortgage.
8.2 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, the Closing Date), is subject to the
satisfaction of the following conditions precedent as of the date such Extension
of Credit is requested to be made:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by each of the Loan Parties 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) FOREIGN SUBSIDIARY OPINION. If such requested Extension of Credit
is the initial Multicurrency Loan to be made to any Foreign Subsidiary
Borrower, the Administrative Agent shall have received (with a copy for
each Lender) a Foreign Subsidiary Opinion in respect of such Foreign
Subsidiary Borrower.
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Each Extension of Credit made to a Borrower hereunder shall constitute a
representation and warranty by such Borrower as of the date of such Extension of
Credit that the conditions contained in this subsection 8.2 have been satisfied.
SECTION 9. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments (or any of
them) remain in effect, any Loan or Reimbursement Obligation remains outstanding
and unpaid or any other amount is owing to any Lender or either Administrative
Agent hereunder or under any other Loan Document, the Company shall and shall
cause each of its Subsidiaries to:
9.1 FINANCIAL STATEMENTS. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Company, copies of the consolidated and
consolidating balance sheets of the Company and its consolidated
Subsidiaries as at the end of such year and the related consolidated and
consolidating statements of income and retained earnings and of cash flows
for such year, setting forth in each case in comparative form the figures
for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of
the audit, by Xxxxxx Xxxxxxxx LLP or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Company, the unaudited consolidated and consolidating balance
sheets of the Company and its consolidated Subsidiaries as at the end of
such quarter and the related unaudited consolidated and consolidating
statements of income and retained earnings and of cash flows of the Company
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);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein and except that interim statements may exclude detailed
footnote disclosure in accordance with standard practice).
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9.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 9.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 9.1(a) and 9.1(b), a certificate of a
Responsible Officer (i) stating that, to the best of such officer's
knowledge, each Loan Party during such period has observed or performed all
of its covenants and other agreements, and satisfied every condition,
contained in this Agreement and the other Loan Documents 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 (ii) in the case of financial statements referred to in
subsections 9.1(a) and 9.1(b), including calculations and information
demonstrating in reasonable detail compliance with the requirements of
subsection 10.1;
(c) not later than 30 days following the end of each fiscal year of
the Company, a copy of the projections by the Company of the operating
budget of the Company and its Subsidiaries for the succeeding fiscal year,
such projections to be accompanied by a certificate of a Responsible
Officer to the effect that such projections have been prepared on the basis
of sound financial planning practice and that such officer has no reason to
believe they are incorrect or misleading in any material respect;
(d) within five Business Days after the same are filed, copies of all
financial statements and reports which the Company may make to, or file
with, the Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(e) concurrently with the delivery of the financial statements
referred to in subsections 9.1(a) and 9.1(b), to the extent not included in
the financial statements and reports referred to in subsection 9.2(d), a
management narrative report explaining all significant variances from
forecasts, projections and previous results and all significant current
developments in staffing, marketing, sales and operations; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
9.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
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 Company or its Subsidiaries, as the case may be.
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9.4 MAINTENANCE OF EXISTENCE. 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
10.5; and comply with all Contractual Obligations and Requirements of Law except
to the extent that failure to comply therewith could not, in the aggregate, be
reasonably expected to have a Material Adverse Effect.
9.5 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 (but including
in any event public liability, product liability and business interruption) as
are usually insured against in the same general area by companies engaged in the
same or a similar business; and furnish to each Lender, upon written request,
full information as to the insurance carried.
9.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and, upon prior
written notice, 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
at any reasonable time and as often as may reasonably be desired and to discuss
the business, operations, properties and financial and other condition of the
Company and its Subsidiaries with officers and employees of the Company and its
Subsidiaries and, in the presence of an officer of the Company, with its
independent certified public accountants.
9.7 NOTICES. Promptly give notice to the Administrative Agent (who
shall promptly notify 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 Company or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Company
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
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding (including without limitation any
notice of violation, alleged violation, liability or potential liability
under any Environmental Law) affecting the Company 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 any Loan Party knows or has reason to know thereof: (i) the
occurrence or
57
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; and
(e) any development or event which has had or could reasonably be
expected to have 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.
9.8 ENVIRONMENTAL LAWS . (a) Comply with, and ensure compliance by
all tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply in all respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except to the extent that any failures could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect or to
result in the payment of Material Environmental Amount.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not be
reasonably expected to have a Material Adverse Effect.
9.9 ADDITIONAL SUBSIDIARIES. (a) With respect to any Domestic
Subsidiary of the Company created or acquired after the Closing Date by the
Company, promptly (i)cause such Subsidiary to become a party to the Guarantee
and Collateral Agreement,(ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, executed in blank, securing such Subsidiary's obligations under such
guarantee and covering the types of assets covered by the Guarantee and
Collateral Agreement, (iii)take all required actions to perfect the security
interests created by the Guarantee and Collateral Agreement in the assets of
such Subsidiary,(iv) to the extent required by subsection 9.10(a), cause such
Subsidiary to execute and deliver one or more Mortgages, in form and substance
satisfactory to the Administrative Agent, securing such Subsidiary's obligations
under such guarantee, and any other documents required under such subsection and
(v) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described in the preceding clauses
(i) through (iv)
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which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(b) With respect to each Foreign Subsidiary listed in Item 2 of
Schedule VI, at or within two months after the Closing Date, and with respect to
(i) each direct Material Foreign Subsidiary of the Company acquired or formed
after the Closing Date, promptly after the acquisition or formation thereof, and
(ii) each existing Foreign Subsidiary which becomes a Material Foreign
Subsidiary, execute and deliver and cause each such Foreign Subsidiary to
execute and deliver to the Administrative Agent, in form and substance
reasonably satisfactory to the Administrative Agent, such documents and
instruments (including, without limitation, pledge agreements) and take such
action (including, without limitation, the delivery of stock certificates and
instruments) as the Administrative Agent may reasonably request in order to
grant to the Administrative Agent, for the ratable benefit of the Lenders, as
collateral security for the Obligations, a first priority perfected security
interest in 65% of the Capital Stock of, or equivalent ownership interests in,
such Foreign Subsidiary, along with any warrants, options, or other rights to
acquire the same, in all cases to the extent legally permissible and practicable
and deliver to the Administrative Agent such legal opinions as it shall
reasonably request with respect thereto.
9.10 AFTER-ACQUIRED PROPERTY. (a) Upon the acquisition by the Company
or any of its Domestic Subsidiaries of any fee or leasehold interest in real
property for consideration in excess of $1,000,000, or of any Domestic
Subsidiary holding any such interest, deliver to the Administrative Agent one or
more Mortgages granting the Administrative Agent a first priority security
interest in such real property and/or leaseholds, together with (i) legal
opinions in form and substance satisfactory to the Administrative Agent and
covering the matters covered, with respect to the Mortgage delivered on the
Closing Date, by the opinions delivered pursuant to subsection 8.1(j)(ii) and
(ii) the documents which would be required under subsections 8.1(s), 8.1(t),
8.1(u) and 8.1(v), as appropriate, if such Mortgage were to have been delivered
at the Closing Date.
(b) Grant in favor of the Administrative Agent, for the benefit of the
Lenders, Liens on any other assets hereafter acquired by the Company or any
Domestic Subsidiary and on previously encumbered assets which become
unencumbered, to the extent such Liens are then permissible under applicable law
and pursuant to any agreements to which the Company or its Subsidiaries are a
party, at any time that the aggregate fair market value of such assets exceeds
$1,000,000, pursuant to documentation in form and substance satisfactory to the
Administrative Agent.
SECTION 10. NEGATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments (or any of
them) remain in effect, any Loan or Reimbursement Obligation remains outstanding
and unpaid or any other amount is owing to any Lender or either Administrative
Agent hereunder or under
59
any other Loan Document, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
10.1 FINANCIAL CONDITION COVENANTS.
(a) INTEREST COVERAGE. Permit for any period of four consecutive
fiscal quarters ending during any test period set forth below the ratio of
(i) Consolidated EBITDA for such period of four consecutive fiscal quarters
to (ii) Consolidated Interest Expense for such period of four consecutive
fiscal quarters, to be less than the ratio set forth opposite such test
period below:
Test Period Ratio
----------- -----
Closing through 9/30/97 1.50x
10/1/97 through 3/31/98 1.75x
4/1/98 through 9/30/98 2.00x
10/1/98 through 9/30/99 2.25x
10/1/99 through 9/30/00 2.50x
Thereafter 3.00x
(b) MAINTENANCE OF CONSOLIDATED INDEBTEDNESS TO CONSOLIDATED EBITDA
RATIO. Permit the ratio of (i) Consolidated Indebtedness on any date
during any test period set forth below to (ii) Consolidated EBITDA for the
four fiscal quarters most recently ended prior to such date, to be greater
than the amount set forth opposite such test period below:
Test Period Ratio
----------- -----
Closing through 9/30/97 4.50x
10/1/97 through 3/31/98 4.25x
4/1/98 through 9/30/98 4.00x
10/1/98 through 9/30/99 3.50x
10/1/99 through 9/30/00 3.25x
Thereafter 3.00x
10.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrowers under this Agreement;
(b) Existing Subordinated Debt;
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(c) New Subordinated Debt;
(d) existing Indebtedness of the Company listed on Schedule 10.2;
(e) Indebtedness of the Company to any Domestic Subsidiary of the
Company and of any Subsidiary to the Company or to any other Domestic
Subsidiary of the Company;
(f) Indebtedness under sale and leaseback transactions permitted by
subsection 10.12;
(g) Indebtedness of the Company under Hedge Agreements entered into
solely to hedge interest rate exposure and not for speculative purposes;
(h) Indebtedness of the Company or any Subsidiary incurred to finance
the acquisition, construction or improvement of any fixed or capital
assets, including obligations under Financing Leases and any Indebtedness
assumed in connection with the acquisition of any such assets or secured by
a Lien on any such extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof;
PROVIDED that (A) such Indebtedness is incurred prior to or within 90 days
after such acquisition or the completion of such construction or
improvement and (B) the aggregate principal amount of Indebtedness
permitted by this paragraph (h), together with the aggregate principal
amount of Indebtedness permitted under subsection 10.2(i) then outstanding
and the aggregate amount of sale-leaseback transactions permitted under
subsection 10.12 theretofore consummated, shall not exceed $10,000,000 at
any time outstanding;
(i) Indebtedness of any Person that becomes a Subsidiary after the
date hereof; PROVIDED that (A) such Indebtedness exists at the time such
Person becomes a Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary and (B) the aggregate
principal amount of Indebtedness permitted by this paragraph (i), together
with the aggregate principal amount of Indebtedness permitted under
subsection 10.2(h) then outstanding and the aggregate amount of
sale-leaseback transactions permitted under subsection 10.12 theretofore
consummated, shall not exceed $10,000,000 at any time outstanding;
(j) Indebtedness of the Company or any Subsidiary as an account party
in respect of trade letters of credit;
(k) Indebtedness of any Foreign Subsidiaries, in addition to
Indebtedness permitted by paragraph (l), in an aggregate amount not in
excess of $10,000,000 at any time outstanding;
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(l) Indebtedness of any Foreign Subsidiary to any other Foreign
Subsidiary; and
(m) additional unsecured Indebtedness of the Company not exceeding
$25,000,000 in aggregate principal amount at any one time outstanding under
terms acceptable to the Administrative Agent, the proceeds of which shall
be used for Acquisitions.
10.3 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes 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 such Person in conformity
with GAAP (or, in the case of Foreign Subsidiaries, generally accepted
accounting principles in effect from time to time in their respective
jurisdictions of incorporation);
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) 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;
(e) 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 such
Person;
(f) Existing Liens listed on Schedule 10.3;
(g) Liens securing Indebtedness of the Borrower permitted by
subsection 10.2(h) incurred to finance the acquisition of fixed or capital
assets (whether pursuant to a loan, a Financing Lease or otherwise),
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
62
and (iv) the principal amount of Indebtedness secured by any such Lien
shall at no time exceed 90% of the original purchase price of such property
at the time it was acquired;
(h) Liens on current assets of any Foreign Subsidiary securing
Indebtedness of such Foreign Subsidiary permitted under subsection 10.2(k);
(i) Liens (not otherwise permitted hereunder) which secure obligations
in aggregate amount at any time outstanding not exceeding (as to the
Borrower and all Subsidiaries), and on property with an aggregate value not
exceeding, $2,000,000; and
(j) Liens created pursuant to the Security Documents.
10.4 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 10.4;
(b) Guarantee Obligations incurred after the date hereof in an
aggregate amount not to exceed $2,000,000 at any one time outstanding;
(c) guarantees made in the ordinary course of its business by the
Company of obligations (other than Indebtedness) of any of its Domestic
Subsidiaries, which obligations are otherwise permitted under this
Agreement;
(d) the guarantee of the Company under this Agreement and guarantee of
the Domestic Subsidiaries under the Guarantee and Collateral Agreement;
(e) guarantees of any Foreign Subsidiary of the obligations of any
other Foreign Subsidiary; and
(f) guarantees of the Company of obligations of Foreign Subsidiaries
in an aggregate amount not in excess of $10,000,000 at any one time
outstanding.
10.5 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Company may be merged or consolidated with
or into the Company (PROVIDED that the Company shall be the continuing or
surviving corporation) or with or into any one or more wholly owned
Subsidiaries of the
63
Company (PROVIDED that if a Domestic Subsidiary is a party to such
transaction, such Domestic Subsidiary shall be the continuing or surviving
corporation); and
(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 Company or any other wholly owned Domestic Subsidiary of
the Company.
10.6 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
Company or any wholly owned Domestic 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) as permitted by subsection 10.5(b);
(d) the sale or other disposition of any other property for
consideration not in excess of $500,000 in the aggregate in any fiscal
year; and
(e) any other Asset Sale; PROVIDED that (i) any consideration received
therefor has been determined by the Company's Board of Directors to be at
fair market value,(ii) in the case of the sale of the Company's magnetics
business, 75% of such consideration is paid in cash, and in the case of any
other Asset Sale, at least 90% of such consideration is paid in cash and
(iii) the Net Proceeds of each such transaction are applied to the
prepayment of the Loans as provided in subsection 6.4(e).
10.7 LIMITATION ON DIVIDENDS. Declare or pay any dividend (other than
dividends payable solely in common stock of the Company) 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 Company or any Subsidiary or any
warrants or options to purchase any such Capital 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 Company or
any Subsidiary thereof (such declarations, payments, setting apart, purchases,
redemptions, defeasances, retirements, acquisitions and distributions being
herein called "RESTRICTED PAYMENTS").
10.8 LIMITATION ON CAPITAL EXPENDITURES. Make any Capital Expenditure
except for Capital Expenditures by the Company and its Subsidiaries in the
ordinary course of business not exceeding, in the aggregate during any fiscal
year of the Borrower, $15,000,000;
64
PROVIDED, that up to $5,000,000 of such permitted amount not expended in any
fiscal year may be carried over for expenditure in the subsequent fiscal year.
10.9 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) investments in Cash Equivalents;
(c) loans and advances to employees of the Company or its Subsidiaries
for travel, entertainment and relocation expenses in the ordinary course of
business in an aggregate amount for the Company and its Subsidiaries not to
exceed $1,000,000 at any one time outstanding;
(d) investments by the Company or its Subsidiaries in any wholly-owned
Subsidiary of the Company which has complied with the conditions set forth
in subsection 9.9(a) or any wholly-owned Foreign Subsidiary which has
complied with the conditions set forth in subsection 9.9(b); PROVIDED that
the aggregate amount of all such advances, loans, investments, transfers or
guarantees outstanding at any time made to or on behalf of the Foreign
Subsidiaries shall not exceed $5,000,000;
(e) investments in the form of non-cash consideration received by the
Company or any of its Subsidiaries in connection with any Asset Sale
permitted by subsection 10.6(e);
(f) Acquisitions; PROVIDED, the aggregate amount of investments
permitted pursuant to this paragraph (f) shall not exceed, while this
Agreement is in effect, the sum of (i) $100,000,000 plus (ii) 50% of
Consolidated Excess Cash Flow from the Closing Date, LESS the amount of
such Consolidated Excess Cash Flow theretofore applied to repay Existing
Subordinating Debt or New Subordinated Debt MINUS (iii) the amount of
investments made pursuant to subsection 10.9(g); and
(g) additional investments not to exceed $10,000,000 in the aggregate
while this Agreement is outstanding.
10.10 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS. (a) Make any optional payment or prepayment on or redemption or
purchase of any Indebtedness (other than the Loans), (b) amend, modify or
change, or consent or agree to any amendment, modification or change to any of
the terms of any Indebtedness (excluding the Loans) (other than any such
amendment, modification or change which would extend the maturity or reduce the
amount of any payment of principal thereof or which would reduce the
65
rate or extend the date for payment of interest thereon), or (c) amend, modify
or change the subordination provisions of any Subordinated Debt; PROVIDED that
(i) the Existing Subordinated Debt may be repaid with the proceeds of the New
Subordinated Debt and (ii) Subordinated Debt may be repaid with up to (A) 25% of
Consolidated Excess Cash Flow for the fiscal year ending September 30, 1997, (B)
50% of Consolidated Excess Cash Flow for each subsequent fiscal year and (C)
100% of the net proceeds of any sale of Capital Stock or other equity investment
in the Company to the extent applied to the prepayment of Subordinated Debt
within 90 days of the Company's receipt thereof; and PROVIDED, FURTHER, that in
addition to the repayments permitted in the immediately preceding proviso, up to
$15,000,000 of the Subordinated Debt may be repaid.
10.11 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 Company's or such Subsidiary's business and (c) upon fair
and reasonable terms no less favorable to the Company 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.
10.12 LIMITATION ON SALES AND LEASEBACKS. Enter into any arrangement
with any Person providing for the leasing by the Company or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Company 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 Company or such Subsidiary; provided, that such
sale leaseback transactions in an amount of, together with the aggregate
principal amount of Indebtedness permitted under subsection 10.2(h) and (i)
then outstanding, up to $10,000,000 in the aggregate while this Agreement is in
effect may be consummated by the Company.
10.13 LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal year of
the Borrower to end on a day other than September 30.
10.14 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into with any
Person any agreement, other than (a) this Agreement and (b) any industrial
revenue bonds, purchase money mortgages or Financing Leases permitted by this
Agreement (in which cases, any prohibition or limitation shall only be effective
against the assets financed thereby), which prohibits or limits the ability of
the Company 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.
10.15 LIMITATION ON LINES OF BUSINESS. Enter into any business,
either directly or through any Subsidiary, except for the information and data
processing, management and storage businesses.
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10.16 LIMITATION ON MODIFICATION OF SKC ARRANGEMENT. Amend, modify or
change, or consent or agree to any amendment, modification or change to, any of
the terms of the SKC Arrangement if such amendment, modification or change could
be adverse to the interests of the Lenders.
SECTION 11. GUARANTEE
11.1 GUARANTEE. (a) The Company hereby unconditionally and
irrevocably guarantees to the Administrative Agent, for the ratable benefit of
the Lenders and their respective successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by the Foreign Subsidiary
Borrowers when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.
(b) The Company further agrees to pay any and all expenses (including,
without limitation, all reasonable fees and disbursements of counsel, which may
be paid or incurred by the Administrative Agent or any Lender in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, the Company under this Section. This Section
shall remain in full force and effect until the Obligations are paid in full and
the Commitments are terminated, notwithstanding that from time to time prior
thereto the Borrowers may be free from any Obligations.
(c) No payment or payments made by any Borrower or any other Person or
received or collected by the Administrative Agent or any Lender from any
Borrower or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application, at any time or from time to time, in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the Company hereunder which shall,
notwithstanding any such payment or payments, remain liable hereunder for the
Obligations until the Obligations are paid in full and the Commitments are
terminated.
(d) The Company agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability hereunder, it will notify the Administrative Agent and
such Lender in writing that such payment is made under this Section for such
purpose.
11.2 NO SUBROGATION. Notwithstanding any payment or payments made by
the Company hereunder, or any set-off or application of funds of the Company by
the Administrative Agent or any Lender, the Company shall not be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrowers or against any collateral security or guarantee or right
of offset held by the Administrative Agent or any Lender for the payment of the
Obligations, nor shall the Company seek or be entitled to seek any contribution
or reimbursement from the Borrowers in respect of payments made by the
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Company hereunder, until all amounts owing to the Administrative Agent and the
Lenders by the Borrowers on account of the Obligations are paid in full and the
Commitments are terminated. If any amount shall be paid to the Company on
account of such subrogation rights at any time when all of the Obligations shall
not have been paid in full, such amount shall be held by the Company in trust
for the Administrative Agent and the Lenders, segregated from other funds of the
Company, and shall, forthwith upon receipt by the Company, be turned over to the
Administrative Agent in the exact form received by the Company (duly indorsed by
the Company to the Administrative Agent, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as Administrative Agent
may determine. The provisions of this paragraph shall be effective
notwithstanding the termination of this Agreement and the payment in full of the
Obligations and the termination of the Commitments.
11.3 AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF
RIGHTS. The Company shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Company, and without notice to or
further assent by the Company, any demand for payment of any of the Obligations
made by the Administrative Agent or any Lender may be rescinded by the
Administrative Agent or such Lender, and any of the Obligations continued, and
the Obligations, or the liability of any other party upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any Lender, and any Loan Documents and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, in
accordance with the provisions thereof as the Administrative Agent (or the
requisite Lenders, as the case may be) may deem advisable from time to time, and
any collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Lender for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. None of the Administrative
Agent or any Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Obligations or for
this Agreement or any property subject thereto. When making any demand
hereunder against the Company, the Administrative Agent or any Lender may, but
shall be under no obligation to, make a similar demand on the Borrowers or any
other guarantor, and any failure by the Administrative Agent or any Lender to
make any such demand or to collect any payments from the Borrower or any such
other guarantor or any release of the Borrowers or such other guarantor shall
not relieve the Company of its obligations or liabilities hereunder, and shall
not impair or affect the rights and remedies, express or implied, or as a matter
of law, of the Administrative Agent or any Lender against the Company. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
11.4 GUARANTEE ABSOLUTE AND UNCONDITIONAL. The Company waives any and
all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon this Agreement or acceptance of this Agreement; the Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in
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reliance upon this Agreement; and all dealings between the Borrowers and the
Company, on the one hand, and the Administrative Agent and the Lenders, on the
other, shall likewise be conclusively presumed to have been had or consummated
in reliance upon this Agreement. The Borrower waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrowers and the Company with respect to the Obligations. This Section 11
shall be construed as a continuing, absolute and unconditional guarantee of
payment without regard to (a) the validity, regularity or enforceability of this
Agreement, any other Loan Document, any of the Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Lender, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Company against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrowers
or the Company) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrowers for the Obligations, or of the
Company under this Section 11, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against the Borrower, the
Administrative Agent and any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against the Borrowers or any
other Person or against any collateral security or guarantee for the Obligations
or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to pursue such other rights or remedies or to
collect any payments from the Borrowers or any such other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Borrowers or any such other Person or of any such
collateral security, guarantee or right of offset, shall not relieve the Company
of any liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against the Company. This Section 11 shall
remain in full force and effect and be binding in accordance with and to the
extent of its terms upon the Company and its successors and assigns, and shall
inure to the benefit of the Administrative Agent and the Lenders, and their
respective successors, indorsees, transferees and assigns, until all the
Obligations and the obligations of the Company under this Agreement shall have
been satisfied by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time during the term of this Agreement the
Borrowers may be free from any Obligations.
11.5 REINSTATEMENT. This Section 11 shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Obligations is rescinded or must otherwise be restored or
returned by the Administrative Agent or any Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of any Borrower or upon
or as a result of the appointment of a receiver, intervenor or conservator of,
or trustee or similar officer for, any Borrower or any substantial part of its
property, or otherwise, all as though such payments had not been made.
11.6 PAYMENTS. The Company hereby agrees that all payments required
to be made by it hereunder will be made to the Administrative Agent without
set-off or counterclaim
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in accordance with the terms of the Obligations, including, without limitation,
in the currency in which payment is due.
SECTION 12. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) Any Borrower shall fail to pay (i) any principal of any Loans or
any Reimbursement Obligations when due (whether at the stated maturity, by
acceleration or otherwise) in accordance with the terms thereof or hereof
or (ii) any interest on any Loans, or any fee or other amount payable
hereunder, within five days after any such interest, fee or other amount
becomes due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by the Company
or any other Loan Party herein or in any other Loan Document or which is
contained in any certificate, document or financial or other statement
furnished 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 Company or any other Loan Party shall default in the
observance or performance of any negative covenant contained in Section 10
or in any Security Document to which it is a party; or
(d) The Company or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document other than as provided in (a) through
(c) above, and such default shall continue unremedied for a period of 30
days; or
(e) Any Loan Document shall cease, for any reason, to be in full force
and effect, or the Company or any other Loan Party shall so assert; or any
security interest created by any of the Security Documents shall cease to
be enforceable and of the same effect and priority purported to be created
thereby; or
(f) The Guarantee and Collateral Agreement shall cease, for any
reason, to be in full force and effect, or any guarantor thereunder shall
so assert; or
(g) The subordination provisions contained in any instrument pursuant
to which the Subordinated Debt was created or in any instrument evidencing
such Subordinated Debt shall cease, for any reason, to be in full force and
effect or enforceable in accordance with their terms; or
(h) The Company or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than
Indebtedness under this
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Agreement), in the payment of any Guarantee Obligation or in the payment of
any SKC Arrangement Obligation or Hedge Agreement Obligation, in any case
where the principal amount thereof then outstanding exceeds $5,000,000,
beyond the period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Indebtedness, Guarantee
Obligation, SKC Arrangement Obligation or Hedge Agreement Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness, Guarantee
Obligation, SKC Arrangement Obligation or Hedge Agreement 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, SKC Arrangement Obligation or Hedge
Agreement Obligation 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
(i)(i) The Company, any Domestic Subsidiary or any Material Foreign
Subsidiary shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian or other similar official for it or for
all or any substantial part of its assets, or the Company, any Domestic
Subsidiary or any Material Foreign Subsidiary shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Company, any Domestic Subsidiary or any Material
Foreign Subsidiary any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order
for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Company, any Domestic Subsidiary or
any Material Foreign Subsidiary any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Company, any Domestic Subsidiary or any
Material Foreign Subsidiary shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) the Company, any
Domestic Subsidiary or any Material Foreign Subsidiary shall generally not,
or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
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(j)(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 Single
Employer Plan, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Majority Lenders, likely to
result in the termination of such Plan for purposes of Title IV of ERISA,
(iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) the Company or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Majority Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist, with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could subject the Company or any
of its Subsidiaries to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations, property or
financial or other condition of the Company and its Subsidiaries taken as a
whole; or
(k) One or more judgments or decrees shall be entered against the
Company or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $2,500,000 or more and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or
(l)(i) Any Person or "group" (within the meaning of Section 13(d) or
15(d) of the Exchange Act), other than any Person or group owning 20% or
more of the Capital Stock of the Company on the date hereof (A) shall have
acquired, combined with previous holdings, beneficial ownership of 25% or
more of any outstanding class of capital stock of the Company having
ordinary voting power in the election of directors or (B) shall obtain the
power (whether or not exercised) to elect a majority of the Company's
directors or (ii) the Board of Directors of the Company shall not consist
of a majority of Continuing Directors;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (i) above with respect of the Company
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including, without limitation, all Reimbursement Obligations,
regardless of whether or not such Reimbursement Obligations are then due and
payable) shall immediately become due and payable, and (B) if such event is any
other Event of Default, any of the following actions may be taken: (i) with the
consent of the Majority Lenders, the Administrative Agent may, or upon the
request of the Majority Lenders, the Administrative Agent shall, by notice to
the Company declare the Commitments to be
72
terminated forthwith, whereupon the Commitments shall immediately terminate;
(ii) with the consent of the Majority Lenders, the Administrative Agent may, or
upon the direction of the Majority Lenders, the Administrative Agent shall, by
notice of default to the Company, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement (including
all amounts payable in respect of Letters of Credit whether or not the
beneficiaries thereof shall have presented the drafts and other documents
required thereunder) and the Notes to be due and payable forthwith, whereupon
the same shall immediately become due and payable and (iii) the Administrative
Agent may, and upon the direction of the Majority Lenders shall, exercise any
and all remedies and other rights provided pursuant to this Agreement and/or 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 Company shall at such time deposit in a
cash collateral account opened by the Administrative Agent an amount equal to
the aggregate then undrawn and unexpired amount of such Letters of Credit. The
Company hereby grants to the Administrative Agent, for the benefit of the
Issuing Lender and the Participating Lenders, a security interest in such cash
collateral to secure all obligations of the Company under this Agreement and the
other Loan Documents. Amounts held in such cash collateral account shall be
applied by the Administrative 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 Company 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 Company 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
Company. The Company shall execute and deliver to the Administrative Agent, for
the account of the Issuing Lender and the Participating Lenders, such further
documents and instruments as the Administrative Agent may request to evidence
the creation and perfection of the within security interest in such cash
collateral account.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 13. THE ADMINISTRATIVE AGENT AND THE ARRANGER
13.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative
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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 Administrative Agent.
13.2 DELEGATION OF DUTIES. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
13.3 EXCULPATORY PROVISIONS. Neither the Administrative 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 Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrower to perform its obligations hereunder
or thereunder. The Administrative 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.
13.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified 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 Majority 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 Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of
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the Majority 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 Loans.
13.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Majority Lenders; PROVIDED that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
13.6 NON-RELIANCE ON ADMINISTRATIVE AGENT, ARRANGER AND OTHER LENDERS.
Each Lender expressly acknowledges that none of the Administrative Agent, the
Arranger or any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Administrative Agent or the Arranger hereinafter taken,
including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Administrative Agent or the
Arranger to any Lender. Each Lender represents to the Administrative Agent and
the Arranger that it has, independently and without reliance upon the
Administrative Agent, the Arranger 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
Administrative Agent, the Arranger 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 Administrative Agent hereunder, the
Administrative Agent and the Arranger 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
Administrative Agent or the Arranger or any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
13.7 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent and the Arranger in their capacities as such (to the extent
not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to
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their respective Aggregate Total Outstandings in effect on the date on which
indemnification is sought (or, if indemnification is sought after the date upon
which the Commitments shall have terminated and the Loans shall have been paid
in full, ratably in accordance with their Aggregate Total Outstandings
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Administrative Agent or the
Arranger in any way relating to or arising out of, the Commitments, 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 Administrative Agent or the Arranger 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 Administrative Agent's or the Arranger's gross
negligence or willful misconduct. The agreements in this subsection shall
survive the payment of the Loans and all other amounts payable hereunder.
13.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative 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
Administrative Agent were not the Administrative Agent hereunder and under the
other Loan Documents. With respect to the Loans made by it, the Administrative
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
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
13.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Majority 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 Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 13 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
13.10 THE ARRANGER. The Arranger, in its capacity as such, shall not
have any duties or responsibilities hereunder or under any Loan Document nor any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties,
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obligations or liabilities shall be read into this Agreement or otherwise exist
against the Arranger in its capacity as such.
SECTION 14. MISCELLANEOUS
14.1 AMENDMENTS AND WAIVERS. (a) Neither this Agreement or any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this subsection
14.1. The Majority Lenders may, or, with the written consent of the Majority
Lenders, the Administrative Agent may, from time to time, (i) enter into with
the Company written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights or obligations
of the Lenders or of the Borrowers hereunder or thereunder or (ii) waive at the
Company's request, on such terms and conditions as the Majority Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; PROVIDED, HOWEVER, that no such waiver
and no such amendment, supplement or modification shall:
(A) reduce the amount or extend the scheduled date of maturity of any
Loan or of any scheduled installment thereof, or reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of any
payment thereof or increase the amount or extend the expiration date of any
Lender's Commitments, in each case without the consent of each Lender
affected thereby;
(B) amend, supplement, modify or waive any provision of this
subsection 14.1 or reduce the percentages specified in the definition of
"Majority Lenders" or consent to the assignment or transfer by the Company
of any of its rights and obligations under this Agreement and the other
Loan Documents, in each case without the consent of all the Lenders, or
reduce the percentages specified in the definition of "Majority Revolving
Credit Lenders" without the consent of all of the Revolving Credit Lenders;
(C) amend, supplement, modify or waive any provision of Section 13 or
any other provision of this Agreement governing the rights or obligations
of the Administrative Agent without the consent of the then Administrative
Agent;
(D) extend the expiring date on any Letter of Credit beyond the
Revolving Credit Termination Date without the consent of each Revolving
Credit Lender;
(E) release the guarantee contained in Section 11 or the Guarantee
and Collateral Agreement or all or a substantial portion of the Collateral
under, and as defined in, the Security Documents without the consent of
each Lender; or
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(F) amend, supplement, modify or waive any provision of subsection
6.4(d), (e), (f) or (h) without the consent of (x) at any time prior to the
termination of the Commitments, Lenders having Available Revolving Credit
Commitments, undrawn Term Loan Commitments and Aggregate Total Outstandings
aggregating more than 60% of the sum of the Available Revolving Credit
Commitments, undrawn Term Loan Commitments and Aggregate Total Outstandings
of all Lenders, and (y) at any time after the termination of the
Commitments, Lenders having Aggregate Total Outstandings aggregating more
than 60% of the Aggregate Total Outstandings of all Lenders.
Any waiver and any amendment, supplement or modification pursuant to this
subsection 14.1 shall apply to each of the Lenders and shall be binding upon the
Borrowers, the Lenders, the Administrative Agent and all future holders of the
Loans and the Reimbursement Obligations. In the case of any waiver, the
Borrowers, the Lenders and the Administrative Agent shall be restored to their
former positions and rights hereunder and under the 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.
(b) In addition to amendments effected pursuant to the foregoing
paragraph (a), Schedule II may be amended as follows:
(i) Schedule II will be amended to add Subsidiaries of the Company as
Foreign Subsidiary Borrowers upon (A) execution and delivery by the
Company, any such Foreign Subsidiary Borrower, all the Revolving Credit
Lenders and the Administrative Agent, of a Joinder Agreement providing for
any such Subsidiary to become a Foreign Subsidiary Borrower, and (B)
delivery to the Administrative Agent of (I) a Foreign Subsidiary Opinion in
respect of such additional Foreign Subsidiary Borrower and (II) such other
documents with respect thereto as the Administrative Agent shall reasonably
request.
(ii) Schedule II will be amended to remove any Subsidiary as a Foreign
Subsidiary Borrower upon (A) execution and delivery by the Company of a
written amendment providing for such amendment and (B) repayment in full of
all outstanding Loans of such Foreign Subsidiary Borrower.
(c) The Administrative Agent shall give prompt notice to each
Revolving Credit Lender of any amendment effected pursuant to subsection
14.1(b).
14.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
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facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrowers, the Issuing Lender, the Arranger and the
Administrative Agent, and as set forth in Schedule I in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:
The Borrowers: c/o Anacomp, Inc.
00000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Fax: (000) 000-0000
The Administrative
Agent: The First National Bank of Chicago
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx Xxxx
Fax: (000) 000-0000
The Arranger: Xxxxxx Commercial Paper Inc.
3 World Financial Center
New York, New York 10285
Attention: Xxxxxxxx Xxxxxxx
Fax: (000) 000-0000
The Issuing Lender: The First National Bank of Chicago
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx Xxxx
Fax: (000) 000-0000
PROVIDED that any notice, request or demand to or upon the Administrative Agent,
the Issuing Lender or the Lenders pursuant to subsection 2.2, 2.3, 3.2, 4.3, 5.2
or 6.2 shall not be effective until received.
14.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
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14.4 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 making of the
Loans hereunder until all obligations hereunder and under the other Loan
Documents have been paid in full and the Commitments hereunder have been
terminated.
14.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay or
reimburse each of the Administrative Agent and the Arranger for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation, syndication and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Administrative Agent and the Arranger, (b) to pay or reimburse
each Lender and the Administrative Agent for all its costs and expenses incurred
during the continuance of any Default or Event of Default in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including, without limitation, the fees
and disbursements of counsel to each Lender and of counsel to the Administrative
Agent, (c) to pay, indemnify, and hold each Lender and the Administrative 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 other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender, the Arranger and the Administrative 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 execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and related documents
or the use of the proceeds of the Loans, 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 Company, any of
its Subsidiaries or any of the Properties (all the foregoing in this clause (d),
collectively, the "indemnified liabilities"), PROVIDED, that the Company shall
have no obligation hereunder to the Administrative Agent, the Arranger or any
Lender with respect to indemnified liabilities arising from the gross negligence
or willful misconduct of the Administrative Agent, the Arranger or any such
Lender. The agreements in this subsection shall survive repayment of the Loans
and all other amounts payable hereunder for a period of one year.
14.6 SUCCESSORS AND ASSIGNS; PARTICIPATION AND ASSIGNMENTS. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrowers, the
Lenders, the Administrative Agent and their respective successors and assigns,
except that the Borrowers
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may not assign or transfer any of their 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
or lending business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("PARTICIPANTS") participating interests in
any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrowers and the Administrative 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 Company
agrees that if amounts outstanding under this Agreement 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, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement, 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 14.7(a) as fully
as if it were a Lender hereunder. The Company also agrees that each Participant
shall be entitled to the benefits of subsections 6.9, 6.10, 6.11 and 6.12 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
6.12, 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
or lending business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or to an additional
bank or financial institution (an "ASSIGNEE"), in the case of any assignment
relating to Loans to such an additional bank or financial institution (other
than by Xxxxxx Commercial Paper Inc. in connection with its syndication of the
Commitments and the Loans) with the consent of the Company, the Administrative
Agent and the Arranger (which consents in each case shall not be unreasonably
withheld), all or any part of its rights and obligations under this Agreement
and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit F, executed by such Assignee, such
assigning Lender (and, to the extent required, by the Company, the
Administrative Agent and the Arranger) and delivered to the Administrative Agent
for its acceptance and recording in the Register, with a copy to the Arranger,
PROVIDED that, in the case of any such assignment to an additional bank or
financial institution, the sum
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of the aggregate principal amount of the Loans and the aggregate amount of the
Available Revolving Credit Commitment being assigned and, if such assignment is
of less than all of the rights and obligations of the assigning Lender, the sum
of the aggregate principal amount of the Loans and the aggregate amount of the
Available Revolving Credit Commitment remaining with the assigning Lender are
each not less than $5,000,000. 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 Commitments 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). Notwithstanding any
provision of this subsection and subsection 14.6(e), the consent of the Company
shall not be required, and, unless requested by the Assignee and/or the
assigning Lender, new Notes shall not be required to be executed and delivered
by the Company, for any assignment which occurs at any time when any of the
events described in clause (i) of Section 12 shall have occurred and be
continuing.
(d) The Administrative Agent shall, on behalf of the Company, maintain
at the address of the Administrative Agent referred to in subsection 14.2 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 Commitments of, and principal amounts 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 Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as the
owner of a Loan or other obligation hereunder or under any Note as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder or under any Note shall be effective only upon appropriate
entries with respect thereto being made in the Register. The Register shall be
available for inspection by the Company 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 any assignment relating to
Revolving Credit Loans to an Assignee that is not then a Lender or an affiliate
thereof, by the Company and the Administrative Agent, to the extent required by
subsection 14.6(c)) together with payment to the Administrative Agent by the
assigning Lender or Assignee of a registration and processing fee of $3,500
(except that no such registration and processing fee shall be payable (x) by
Xxxxxx Commercial Paper Inc. in connection with its syndication of the
Commitments and the Loans or (y) in the case of an Assignee which is already a
Lender or is an Affiliate of a Lender), the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained
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therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Company.
(f) The Company authorizes each Lender to disclose to any Participant
or Assignee (each, a "TRANSFEREE") and any prospective Transferee, subject to
the provisions of subsection 14.18, any and all financial information in such
Lender's possession concerning the Company and its Affiliates which has been
delivered to such Lender by or on behalf of the Company pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Company in connection with such Lender's credit evaluation of the Company and
its Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
(h) If, pursuant to this subsection 14.6, any interest in this
Agreement or any Note or Letter of Credit is transferred to any Transferee which
is not incorporated or organized under the laws of the United States of America
or a state thereof, the assigning Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, (i) to represent to the
assigning Lender (for the benefit of the assigning Lender, the Administrative
Agent and the Borrowers) that under applicable law and treaties no Non-Excluded
Taxes will be required to be withheld by the Administrative Agent, any Borrower
or the assigning Lender with respect to any payments to be made to such
Transferee in respect of the Loans or Participating Interests, (ii) to furnish
to the assigning Lender, the Administrative Agent and the Company, such forms
and certificates required to be furnished pursuant to subsection 6.12(b) and
(iii) to agree (for the benefit of the assigning Lender, the Administrative
Agent and the Borrowers) to be bound by the provisions of subsections 6.12(b)
and (c).
14.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITTED LENDER")
shall at any time receive any payment of all or part of its Loans owing to it by
any Borrower, 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 clause (i) of Section 12 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 owing to it by
such Borrower, 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 owing to it by such Borrower, 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,
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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 Company, any
such notice being expressly waived by the Company to the extent permitted by
applicable law, upon any amount becoming due and payable by the Company
hereunder (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 Company. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and application
made by such Lender, PROVIDED that the failure to give such notice shall not
affect the validity of such set-off and application.
14.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission), 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 delivered to the Company and the
Administrative Agent.
14.9 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.
14.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Borrowers, the Administrative
Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.
14.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
14.12 SUBMISSION TO JURISDICTION; WAIVERS. (a) Each Borrower hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Loan Document to which
it is a party, or for
84
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New
York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(iii) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Borrower at its address set forth in subsection 14.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction.
(b) Each Foreign Subsidiary Borrower hereby irrevocably appoints the
Company as its agent for service of process in any proceeding referred to in
subsection 14.12(a) and agrees that service of process in any such proceeding
may be made by mailing or delivering a copy thereof to it care of Company at its
address for notice set forth in subsection 14.2.
14.13 ACKNOWLEDGEMENTS. Each Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) none of the Administrative Agent or any Lender has any fiduciary
relationship with or duty to such Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between the Administrative Agents and the Lenders, on the one
hand, and the Company's, 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 Borrowers and the Lenders.
14.14 WAIVERS OF JURY TRIAL. EACH OF THE BORROWERS, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY
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AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
14.15 POWER OF ATTORNEY. Each Foreign Subsidiary Borrower hereby
grants to Company an irrevocable power of attorney to act as its
attorney-in-fact with regard to matters relating to this Agreement and each
other Loan Document, including, without limitation, execution and delivery of
any amendments, supplements, waivers or other modifications hereto or thereto,
receipt of any notices hereunder or thereunder and receipt of service of process
in connection herewith or therewith. Each Foreign Subsidiary Borrower hereby
explicitly acknowledges that the Administrative Agent and each Lender have
executed and delivered this Agreement and each other Loan Document to which it
is a party, and has performed its obligations under this Agreement and each
other Loan Document to which it is a party, in reliance upon the irrevocable
grant of such power of attorney pursuant to this subsection. The power of
attorney granted by each Foreign Subsidiary Borrower hereunder is coupled with
an interest.
14.16 JUDGMENT. (a) If for the purpose of obtaining judgment in any
court it is necessary to convert a sum due hereunder in one currency into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase the first currency with such other currency in the city in which it
normally conducts its foreign exchange operation for the first currency on the
Business Day preceding the day on which final judgment is given.
(b) The obligation of each Borrower in respect of any sum due from it
to any Lender hereunder shall, notwithstanding any judgment in a currency (the
"JUDGMENT CURRENCY") other than that in which such sum is denominated in
accordance with the applicable provisions of this Agreement (the "AGREEMENT
CURRENCY"), be discharged only to the extent that on the Business Day following
receipt by such Lender of any sum adjudged to be so due in the Judgment Currency
such Lender may in accordance with normal banking procedures purchase the
Agreement Currency with the Judgment Currency; if the amount of Agreement
Currency so purchased is less than the sum originally due to such Lender in the
Agreement Currency, such Borrower agrees notwithstanding any such judgment to
indemnify such Lender against such loss, and if the amount of the Agreement
Currency so purchased exceeds the sum originally due to any Lender, such Lender
agrees to remit to such Borrower such excess.
14.17 CONFIDENTIALITY. Each Lender agrees to take normal and
reasonable precautions to maintain the confidentiality of information designated
in writing as confidential and provided to it by the Company or any Subsidiary
in connection with this Agreement; PROVIDED, HOWEVER, that any Lender may
disclose such information (a) at the request of any regulatory authority having
supervisory jurisdiction over it or in connection with an examination of such
Lender by any such authority, (b) pursuant to subpoena or other court
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process, (c) when required to do so in accordance with the provisions of any
applicable law, (d) at the direction of any other Governmental Authority, (e) to
such Lender's Affiliates, independent auditors and other professional advisors
or (f) to any Transferee or potential Transferee; PROVIDED that such Transferee
agrees in writing to comply with the provisions of this subsection 14.17.
14.18 MATTERS RELATING TO FLORIDA AAC CORPORATION. The Company has
advised the Administrative Agent and the Lenders that Florida AAC Corporation, a
Subsidiary of the Company, was expected to be merged into the Company prior to
the Closing Date, but certain administrative matters relating to such merger may
not be completed in time to allow such merger to occur on or before the Closing
Date. The Company agrees that, within five Business Days after the Closing
Date, the Company will either (i) cause such merger to occur or (ii) cause
Florida AAC Corporation to become a party to the Guarantee and Collateral
Agreement and take all related actions contemplated by subsection 9.9 as if
Florida AAC Corporation were a Domestic Subsidiary created or acquired by the
Company after the Closing Date.
14.19 MATTERS RELATING TO CERTAIN EXISTING FINANCING STATEMENTS. The
Company acknowledges that Uniform Commercial Code searches have disclosed that
UCC Financing Statements naming Citibank, N.A. as secured party and the Company
as debtor (the "CITIBANK FINANCING STATEMENTS") are on file in several filing
offices, and that any Liens perfected by the Citibank Financing Statements would
not be permitted to exist pursuant to subsection 10.3. The Company has informed
the Administrative Agent and the Lenders that the Citibank Financing Statements
relate to a credit facility that was in effect prior to the Company's emerging
from bankruptcy proceedings in 1996 and that all indebtedness and other claims
under such credit facility were extinguished in such bankruptcy proceedings and
replaced in part by the Senior Notes. The Company represents and warrants that
there is no outstanding indebtedness secured by Liens that would be perfected by
the Citibank Financing Statements, and the Company covenants that it will not
incur, assume or suffer to exist any such indebtedness. The Company agrees
that, as promptly as possible, and in any event within 20 Business Days after
the Closing Date, the Company will procure, and submit to the appropriate filing
offices, termination statements executed by Citibank, N.A. in respect of each of
the Citibank Financing Statements.
87
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.
ANACOMP, INC.
By: /s/ Xxxx Xxxxxxxx
----------------------------------------
Title: Assistant Treasurer
ANACOMP GmbH
By: /s/ Xxxxx Xxxxx
----------------------------------------
Title: Managing Director
ANACOMP LTD.
By: /s/ K. Xxxxxx Xxxx
----------------------------------------
Title: Vice President-Tax
ANACOMP B.V.
By: /s/ Cees de Graaff
----------------------------------------
Title: Managing Director
ANACOMP S.A.
By: /s/ K. Xxxxxx Xxxx
----------------------------------------
Title: Vice President-Tax
88
N.V. ANACOMP BELGIUM S.A.
By: /s/ Cees de Graaff
----------------------------------------
Title: Managing Director
XIDEX (U.K.) LTD.
By: /s/ K. Xxxxxx Xxxx
----------------------------------------
Title: Vice President-Tax
ANACOMP SCANDINAVIA AB
By: /s/ Xxxxx Xxxxx
----------------------------------------
Title: Managing Director
ANACOMP CANADA, INC.
By: /s/ K. Xxxxxx Xxxx
----------------------------------------
Title: Vice President-Tax
XIDEX GmbH
By: /s/ Xxxxx Xxxxx
----------------------------------------
Title: Managing Director
89
XXXXXX COMMERCIAL PAPER INC.,
as Arranger and as a Lender
By: /s/ Xxxxxx X. Xxx
----------------------------------------
Title: Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO, as
Administrative Agent, Issuing Lender and as
a Lender
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Title: First Vice President
PRIME INCOME TRUST
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Title:
THE ING CAPITAL SENIOR SECURED HIGH INCOME
FUND, L.P.
By: ING CAPITAL ADVISORS INC., as
Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Title: Vice President & Portfolio Manager
XXXXXXX XXXXX SENIOR FLOATING RATE FUND,
INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Authorized Signatory
00
XXXXXXX XXXXXXX PRIME RATE TRUST
By: /s/ Xxxxxx Tiffen
----------------------------------------
Title: Senior Vice President
PROTECTIVE LIFE INSURANCE COMPANY
By: /s/ Xxxxx Xxxxxxx
----------------------------------------
Title: Authorized Signatory
XXX XXXXXX AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Title: Senior Vice President & Director
CRESCENT/MACH I PARTNERS, L.P.
By: TCW ASSET MANAGEMENT COMPANY, its
Investment Advisor
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Title: Senior Vice President
SCHEDULE I
COMMITMENTS; ADDRESSES
A. Revolving Credit Commitment Amounts and Addresses
Revolving Credit
Revolving Credit Lender Commitment
The First National Bank of Chicago
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000 $12,500,000
Xxxxxx Commercial Paper Inc.
3 World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 12,500,000
TOTAL $25,000,000
2
B. Term Loan Commitment Amounts and Addresses
Term Loan
Term Loan Lender Commitment
Xxxxxx Commercial Paper Inc.
3 World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 $15,000,000
Xxxxxxx Xxxxx Senior Floating Rate Fund, Inc.
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxxxxx, Xxx Xxxxxx 00000
$7,000,000
Prime Income Trust
0 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 $6,100,000
The ING Capital Senior Secured High Income Fund, L.P.
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000 $6,100,000
Pilgrim America Prime Rate Trust
0 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000 $6,100,000
Protective Life Insurance Company
Two Galleria Tower
00000 Xxxx Xxxx - Xxxxx 0000
Xxxxxx, Xxxxx 00000 $6,100,000
Xxx Xxxxxx America Capital Prime Rate Income Trust
0 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000 $6,100,000
Crescent/Mach I Partners, L.P.
000 Xxxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000 $2,500,000
TOTAL $55,000,000
SCHEDULE II
FOREIGN SUBSIDIARY BORROWERS
Jurisdiction of
NAME AND ADDRESS INCORPORATION
---------------- ----------------
Xidex GmbH Germany
Xxxxxxxxxxxxx 00x
00000 Xxxxxxxxx
Xxxxxxx
Anacomp GmbH Germany
Xxxxxxxxxxxxx 00x
00000 Xxxxxxxxx
Xxxxxxx
Anacomp Limited United Kingdom
Xxxx Building
Mulberry Business Park
Xxxxxxxxx Xxxx
Xxxxxxxxx Xxxxxxxxx
XX00 0XX
United Kingdom
Xidex (U.K.) Limited United Kingdom
Xxxxxxxxxxxx Xxxx
Xxxxxxxx
Xxxxx
XX0 0XX
Xxxxxx Xxxxxxx
Anacomp B.V. Holland
Ambachtsmark 1
1355 EA Almere-Haven
The Netherlands
Anacomp S.A. France
21 Industrielle Xxxxx Xxxx XX
00, Xxx Xx Xx Xxxxxxx
00000 Xxxxxxxx
Xxxxxx
N.V. Anacomp Belgium S.A. Belgium
Xxxxxxxxxxxxx 0
0000 Xxxxxxxx
Xxxxxxx
Anacomp Canada Inc. Canada
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Anacomp Scandinavia A.B. Sweden
Xxxxxxxxxxxxxx 00 X
000 00 Xxxxxxxxx
Xxxxxx
2
SCHEDULE III
------------
AVAILABLE FOREIGN CURRENCY PAYMENT OFFICES
OF THE ADMINISTRATIVE AGENT
Available Foreign Currency Payment Office
-------------------------- --------------
Belgium Francs To: Generale de Banque
Brussels, Belgium
A/C 00-00-000/00/
SWIFT ADDRESS: XXXXXXXX00X
For: The First National Bank of Chicago,
Chicago favor Cayman Islands Branch
Canadian Dollars
To: Bank of Nova Scotia-Toronto
International Banking Division
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx Xxxxxx
Account Number: 2216-19
SWIFT ADDRESS: XXXXXXXX
For: The First National Bank of Chicago,
Cayman Islands Branch
Deutsche Marks To: Swiss Bank Corporation
Ulmentrasse 00 (X-0000)
Xxxxxxxxx, Xxxxxxx
Account Number: 111550-5005
SWIFT ADDRESS: SBCOFEFF
For: The First National Bank of Chicago,
Cayman Islands Branch
French Francs To: Credit Commerciale de France
000 Xxxxxx xxx Xxxxxxx-Xxxxxxx
Xxxxx, Xxxxxx
Account Number: 00203501611
SWIFT ADDRESS: XXXXXXXX
For: The First National Bank of
Chicago,Cayman Islands Branch
Italian Lira To: Cassa de Risparino delle Provincie
Lombarde, Milan
Account Number: 15387/018 (FNBC
CHICAGO) for A/C
FNBC CAYMAN ISLANDS
For: The First National Bank of Chicago,
Cayman Islands Branch
Pounds Sterling To: Midland Bank, PLC
International Division
London, England
Account Number: 00000000
SWIFT ADDRESS: XXXXXX00
For: The First National Bank of Chicago,
Cayman Islands Branch
SCHEDULE IV
DOMESTIC SUBSIDIARIES; FOREIGN SUBSIDIARIES
DOMESTIC SUBSIDIARIES
---------------------
Dysan International Sales Corporation II*
Xidex International Corporation*
Florida AAC Corporation**
FOREIGN SUBSIDIARIES
--------------------
Xidex GmbH (Germany)
Anacomp GmbH (Germany)
Datamagnetics GmbH (Germany)
Anacomp Holdings Ltd. (U.K.)
Anacomp Ltd. (U.K.)
Xidex U.K. Ltd. (U.K.)
Anacomp B.V. (Holland)
Anacomp Scandinavia A.B. (Sweden)
Anacomp A/S (Denmark)
Anacomp O.Y. (Finland)
Anacomp A/S (Norway)
Anacomp S.A. (France)
Anacomp GesmbH (Austria)
N.V. Anacomp Belgium S.A. (Belgium)
Anacomp Italia S.r.l. (Italy)
COM S.r.l. (Italy)
Xidex Magnetics S.A. (Switzerland)*
Xidex Corp. S.A. (Switzerland) *
Anacomp Canada, Inc. (Canada)
Anacomp do Brazil Ltda. (Brazil)
Anacomp Japan Ltd. (Japan)
Anacomp Pty Ltd. (Australia)*
Xidex New Zealand Ltd. (New Zealand)*
Data-Xxxx Development Int'l., Ltd. (Barbados)***
----------------------------------
* Has substantially no assets and/or in process of being dissolved.
** Within five (5) business days after the Closing Date will be merged into
the Company or will become a party to the Guarantee and Collateral
Agreement.
*** Has approximately $46,400 in assets.
SCHEDULE V
PROPERTIES TO BE MORTGAGED;
JURISDICTIONS FOR MORTGAGE RECORDINGS
PROPERTY JURISDICTION
0000 Xxxxxx Xxxxxx Deed Records of Young County, Texas
Xxxxxx, XX 00000
SCHEDULE VI
FOREIGN SUBSIDIARY PLEDGES
1. Foreign Subsidiary Stock Pledges to be Perfected on Closing Date:
Anacomp Holdings Ltd.
2. Foreign Subsidiary Stock Pledges to be Perfected After Closing Date:
Xidex GmbH
Anacomp S.A.
SCHEDULE 1.1
CERTAIN ASSETS TO BE ACQUIRED
Sale Leaseback Summary
Asset Asset
COMPANY UNITS COST LOW % PURCH PRICE HIGH % PURCH PRICE PERIOD
------- ----- ---- ----- ----------- ------ ----------- ------
CIT 22 5,960,500 19.10% 1,138,456 19.10% 1,138,456 97-09
Ameritech II 19 4,870,000 12.50% 608,750 20.00% 974,000 98-12
Cargill 12 3,000,000 20.00% 600,000 20.00% 600,000 99-01
CIT II 46 11,720,000 16.13% 1,890,436 16.13% 1,890,436 99-01
UJB 4 950,000 16.13% 153,235 16.13% 153,235 99-01
Prime I 8 2,000,000 7.00% 140,000 7.00% 140,000 99-12
Xxxx South 6 1,500,000 10.00% 150,000 10.00% 150,000 99-12
----------------------------------------------------------------------------------------------------
76 19,170,000 2,933,671 2,933,671
Prime II 8 2,150,000 7.00% 150,500 7.00% 150,500 00-01
----------------------------------------------------------------------------------------------------
125 32,150,500 4,831,377 5,196,627
=== ========== ========= =========
----------------------------------------------------------------------------------------------------
Note: CIT, CITII and UJB all have notes. Cash outlay would be less than
CapEx/Asset price.
SCHEDULE 7.1
CONTINGENT LIABILITIES
A) Letters of Credit Issued
Number Beneficiary Amount
---------------------- ------------------------- ------------
1)* NY 0688 30015500 United Pacific Insurance $ 600,000
2) NY 0692 30004293 Dept. of Health Services 232,824
3) NY 0692 30005316 Dept. of Health Services 2,000,000
4)** NY 0816 30006547 Gulf Insurance Company 400,000
5) ST 05341 Aetna Casualty and Surety 2,609,059
6) ST 05334 Center Capital 500,000
* Being replaced by LC # ST 05340
** Being replaced by LC # ST 05339
B) Subsequent to December 31, 1996, Anacomp, Inc. acquired all of the Common
Stock of COM, S.r.1. The purchase price consisted of $460 thousand in cash
paid at closing with an additional $400 thousand in guaranteed payments
over the next two years.
C) Subsequent to December 31, 1996, Anacomp, Inc. acquired all of the
common stock of DataWare Development, Inc. for a purchase price that
consisted of $11.2 million cash at closing and a contingent cash payment of
up to $3.2 million based on future income of the DataWare business over
the next two years.
SCHEDULE 7.6
LITIGATION*
ANACOMP AS DEFENDANT:
CASE NAME AAC'S COUNSEL CLAIM STATUS
--------- ------------- ----- ------
In re: Xidex Corp. (Report Xxxxx Xxxxxx Customs Service is Customs has "liquidated"
filed 11/9/92, Regulatory Grunfeld, seeking repayment by AAC's drawback entries
Audit Division, U.S. Xxxxxxxxx, Xxxxxxxx AAC of approx. without benefit of
Customs Service, & Xxxxxxxxx (G. $2,200,000 of duty drawback. AAC has
Department of the Treasury) Xxxxxx) drawback claims paid by filed a protest with
Customs for which AAC Customs for its Xidex
allegedly does not have claims (8/94), and
appropriate supporting supplemental materials to
documentation. support its previous
protective protest filing
for MID claims (10/94).
Interest is accruing on the
amount AAC allegedly owes,
and the indebtedness now
exceeds $2.8 million.
Settlement discussions are
ongoing. AAC is seeking
to litigate this matter in
the Bankruptcy Court.
Customs has sought to make
an end-run and demand that
the sureties pay Customs
the amount covered by bonds
(approximately $2.6 million).
The Court did not allow
Customs to do that and has
released the sureties
from performing under the
bonds. Anacomp has
filed a summary judgment
motion seeking to dismiss
Customs' claim, and
Customs is seeking to
move the dispute to the
Court of International
Trade.
------------------------------------------
ANACOMP AS DEFENDANT:
CASE NAME AAC'S COUNSEL CLAIM STATUS
--------- ------------- ----- ------
2. Intercargo Insurance and Xxxx Xxxxx Sureties filed to obtain Settled and paid $500,000
Old Republic Insurance x. Xxxxxxxxxx an order compelling AAC to into the Court, and
Anacomp, Inc. (filed 11/8/00 (000) 000-0000 pay amounts owed to $1,250,000 when AAC
in U.S. District Court, (X. Xxxxxx) U.S. Customs which are emerged from
Northern District of covered by the sureties' bankruptcy. Paying an
California bonds. additional
$250,000/month until the
amount of bonds are
covered in full, and will
then pay accrued interest.
However, U.S. Customs
is seeking to force
Intercargo and the other
sureties to pay the money
over to Customs now by
making a claim on the
surety bonds. Customs
was not successful in this
approach, at which time
the Bankruptcy Court
released the sureties from
their performance
obligation under the
bonds. Customs will
most likely appeal.
3. Xxxxx Xxxxxx, Inc. v. Xxxxx Xxxxxxx Claim is for breach of Bankruptcy Court in
Anacomp, Inc. (filed 9/16/96 Keker & Van Nort contract, i.e., Anacomp's Delaware has vacated a
U.S. District Court, (000) 000-0000 failure to pay Xxxxx temporary restraining
Northern District of (X. Xxxxxx) Barney a success fee as order that had prevented
California) a result of Anacomp's Xxxxx Xxxxxx from
bankruptcy restructuring; pursuing this lawsuit.
Damages of $2,200,000 Thus, Xxxxx Xxxxxx has
claimed. proceeded with its suit in
California. Anacomp is
appealing the Bankruptcy
Court's ruling in the
District Court in
Delaware and is
answering and litigating
in the District Court in
California.
ANACOMP AS PLAINTIFF:
CASE NAME AAC'S COUNSEL CLAIM STATUS
--------- ------------- ----- ------
1. Anacomp x. Xxxxx Xxxx Xxxxx Claim is for breach of Discovery to commence.
Magnetics Limited (filed Cadwalader contract, i.e., failure to Court ordered Early
9/11/96 in U.S. District (000) 000-0000 pay Anacomp $3,780,847 Neutral Evaluation to be
Court, Northern District Xxxxx Xxxxxxx under a 9/25/93 held during February
of California) XxXxxxxxx, Xxxxx Agreement between the 1997, at which the parties
Xxxxx & Xxxxxxx parties. may try and settle.
(000) 000-0000
(X. Xxxxxx)
BANKRUPTCY LITIGATION:
CASE NAME AAC'S COUNSEL CLAIM STATUS
--------- ------------- ----- ------
1. U.S. Customs Services x. Xxxxxxxxxx Appeal of Confirmation District Court has not yet
Anacomp (District Court) Order based on alleged ruled.
infirmities in Bankruptcy
Plan's treatment of U.S.
Customs Services' duty
draw-back claim.
SCHEDULE 7.8
REAL PROPERTY OWNED AND LEASED
A. FEE INTERESTS
STREET ADDRESS
OF PROPERTY COUNTY
-------------- ------
Graham Texas Young
0000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
B. LEASEHOLD INTERESTS
STREET ADDRESS
OF PROPERTY COUNTY
-------------- ------
0000 Xxxx Xxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
00000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx X, X & X
Xxxxxxx, XX 00000
0000 X Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
00000 Xxxxxxxxxxx Xxxxxx Xxx Xxxxx
Xxxxx, XX 00000
0000 Xxxxxx Xxxxxx Xxx Xxxxxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
0000 Xxxxx Xxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
0000 Xxxxx Xxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
STREET ADDRESS
OF PROPERTY COUNTY
-------------- ------
00000 Xxxxxx Xxxxxx Xxx Xxxxxxx
Xxxxxxxx Xxxxx, XX 00000
0000 Xxxxxx Xxxxx Xx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
000 Xxxxxxxx Xxxx Xxxx Xxxxxxxx
Xxxx Xxxxxxxx, XX 00000-0000
000 Xxxx Xxxxx Xxxx. Xxxxxxxxx
Xxxxxxxxx, XX 00000
0000 Xxx Xxxxxx Xxxxx, #0 Xxxxx
Xxxxxxxxxxxx, XX 00000
00000 Xxxxxxxx Xxx Xxxx
Xxxxx 000
Xxxxx Xxxxx, XX 00000
0000 Xxxxx Xxxxxxxx Xxxxx Xxxxxx
Xxxxxx 000, 000, 000
Xxxxxxx, XX 00000-0000
0000 Xxxx Xxxxxxx Xxxxxx Xxxxxxxxxxxx
Xxxxx 000
Xxxxx, XX 00000-0000
0000 Xxxxxx Xxxxx XX Xxxxxx
Xxxxxxx, XX 00000-0000
000 Xxxxxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxx Xxxxxxx, XX 00000-0000
000 Xxxx Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxx Xxxxxxx, XX 00000
000 X. XxXxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
00000 Xxxxx Xxxxxxxx Xx. Xxxxxxxx
0xx & 0xx Xxxxx
Xxxxxx, XX 00000
2
STREET ADDRESS
OF PROPERTY COUNTY
-------------- ------
0000 Xxxxxxxxx Xxxxx Xxxxxx
Xxxxxxxx #0
Xxxxxxxxxxxx, XX 00000
0000 Xxxxxxxxx Xxxxx Xxxxxx
Xxxxxxxx 0 - Xxxxx X
Xxxxxxxxxxxx, XX 00000
0000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxx Xxxx, XX 00000
0000-X Xxxxxx Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
The Fincastle Building Jefferson
000 Xxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000-0000
00000-X Xxxx Xxxxxxx Xx. Xxxxxxxxxx
Xxxxxx Xxxxxx, XX 00000
0 Xxxxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
000 Xxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
00 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
So Hadley Industrial Park Hampshire
00 Xxxxxxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
00000 Xxxxxxxx Xxxxx Xxxxxxx
Xxxxx X-0
Xxxxxxxxxx Xxxxx, XX 00000
0000 Xxxxx Xxxx Xxxx Xxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
3
STREET ADDRESS
OF PROPERTY COUNTY
-------------- ------
000 0xx Xxxxxx Xxxxxxxx
Xxxxx X-00X, X-00, X-00
Xxxxxxxxxxx, XX 00000
0000 Xxxx Xxx Xxxxx Xxx. Xxxx
Xx. Xxxxx, XX 00000-0000
00 Xxxxx Xxxx Xxxxxx Xxxxxx
X Xxxxxxx, XX 00000
000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
000 Xxxxxx Xxxxxx
0000 Xxxxxxxx Xx., #000 Xxxxxx
Xxxxxxxxxx, XX 00000-0000
0000 Xxxxxxxxx Xxxxx XX Xxxxxxxxxx
Xxxxx X & X
Xxxxxxxxxxx, XX 00000-0000
0000 Xxxxxxxxxx Xxxx Xxxxx
#000
Xxx Xxxxx, XX 00000
00 Xxxxxx Xxxxxx Xxxxxx
Xxx Xxxx Xxxx, XX 00000
000 Xxxxxxxx Xxxxxx Xxx Xxxx
Xxx Xxxx, XX 00000-0000
000 Xxxxxxxx Xxx Xxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
0000 Xxxxxx Xxxxx Xxxx. X Xxx. 0 Xxxxxx
Xxxxxxxxx, XX 00000
0000 Xxxxxxxx Xxxxxxx Xx., 000 Xxxxxxxx
Xxxxxxxxxx, XX 00000
4
STREET ADDRESS
OF PROPERTY COUNTY
-------------- ------
0000 Xx. Xxxxx Xxxxxx Xxxx
Xxxxx X
Xxxxxxx, XX 00000-0000
0000 Xxxxxxxx Xxxxx Xxxxxxxx
Xxxxxxxx Xxxxxxx, XX 00000-0000
0000 Xxxxxxx Xxxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000-0000
0000 Xxxxxx Xxxx Xxxxxxxx
Xxxxx X
Xxxxxxxx, XX 00000
00000 X.X. Xxxxxx Xxxxx Xxxxxxxxxx
Xxxxxx, XX 00000-0000
0000 Xxxxxxx Xxxx. Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
0000X Xxxxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
0000 Xxxxxxx Xxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxxxx, XX 00000-0000
0000 Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
1288 West 0000 Xxxxx Xxxx Xxxx
Xxxxx X
Xxxx Xxxx Xxxx, XX 00000
0000 X.X. Xxxxxxx Xx. Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
SCHEDULE 10.2
EXISTING INDEBTEDNESS
I. Anacomp, Inc.
A) Letters of Credit Issued
Number Beneficiary Amount
--------------------- ------------------------ ------------
1)* NY 0688 30015500 United Pacific Insurance $ 600,000
2) NY 0692 30004293 Dept. of Health Services 232,824
3) NY 0692 30005316 Dept. of Health Services 2,000,000
4)** NY 0816 30006547 Gulf Insurance Company 400,000
5) ST 05341 Aetna Casualty andSurety 2,609,059
6) ST 05334 Center Capital 500,000
* Being replaced by LC # ST 05340
** Being replaced by LC # ST 05339
B) Indianapolis Industrial Revenue Bonds 275,000
C) AT&T Capital Lease 19,790
D) Carlisle Company Note 1,200,000
E) SKC (Not Part of Trade Credit) 2,656,000
F) COM Products 500,000
G) Hideout, Inc. 66,500
H) 13% Senior Subordinated Notes 171,960,000
I) DataWare Capital Lease 23,852
J) Purchase Price for COM S.r. 400,000
K) Contingent Cash Payment for DataWare Development, Inc. 3,200,000
L) FileNet, Corp. Software License Fees 1,000,000
II. Anacomp Italia S.r.l.
A) Term Loan 69,598
2
EXISTING LIENS
Borrower Name Agreement Amount
----------------------- ----------------- ----------------------- ---------------------
Anacomp, Inc. SKC America, Inc. Amended and Restated
and SKC Limited Master Supply Agreement $10,000,000.00
Xidex (U.K.) Limited Barclays Bank Overdraft Agreement GBP 2,400,000.00
Anacomp Italia S.r.l. Banca Commerciale Overdraft Agreement ITL 1,000,000,000.00
Liens on equipment leased to third parties under operating leases
and on the related leases, incurred prior to January 5, 1996, under which the
remaining receivables aggregate not more than $4,000,000.
Cash collateral securing obligations under the letters of credit
referenced as items 1 through 4 under part I.A. of Schedule 10.2.
SCHEDULE 10.4
EXISTING GUARANTEE OBLIGATIONS
None.
EXHIBIT A-1
FORM OF REVOLVING CREDIT NOTE
$_____________
February___, 1997
FOR VALUE RECEIVED, the undersigned, ANACOMP, INC., an Indiana
corporation (the "COMPANY"), hereby unconditionally promises to pay to the order
of______________ (the "LENDER") at the office of THE FIRST NATIONAL BANK OF
CHICAGO, located at 0 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, in lawful money
of the United States of America and in immediately available funds, on the
Revolving Credit Termination Date the principal amount of (a)___________________
DOLLARS ($__________), or, if less, (b) the aggregate unpaid principal amount of
all Revolving Credit Loans made by the Lender to the Company pursuant to
subsection 2.1 or 2.5 of the Credit Agreement, as hereinafter defined. The
Company 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 6.1 and 6.2 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, Type 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 continuation
thereof, each conversion of all or a portion thereof to another Type and, in the
case of Eurodollar Loans, the length of each Interest Period with respect
thereto. 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 obligations of the Company in respect of such Revolving
Credit Loan.
This Note (a) is one of the Revolving Credit Notes referred to in the
Credit and Guarantee Agreement dated as of February , 1997 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among the Company, the Foreign Subsidiary Borrowers, the Lender, the other banks
and financial institutions from time to time parties thereto, The First National
Bank of Chicago, as Administrative Agent and Xxxxxx Commercial Paper Inc., as
Arranger and Syndication 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. This Note is secured and guaranteed
as provided in the Loan Documents. Reference is hereby made to the Loan
Documents for a description of the properties and assets in which a security
interest has been granted, the nature and extent of the security and the
guarantees, the terms and conditions upon which the security interests and each
guarantee were granted and the rights of the holder of this Note in respect
thereof.
2
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.
ANACOMP, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
Amount Amount of ABR Loans
Converted to Amount of Principal Converted to Unpaid Principal Balance
Date Amount of ABR Loans ABR Loans of ABR Loans Repaid Eurodollar Loans of ABR Loans
-------- ------------------- ----------- ------------------- -------------------- -------------------------
EXHIBIT A-2
FORM OF TERM NOTE
$____________ New York, New York
February __, 1997
FOR VALUE RECEIVED, the undersigned, ANACOMP, INC., an Indiana corporation
(the "COMPANY"), hereby unconditionally promises to pay to the order of
_______________ (the "LENDER") at the office of THE FIRST NATIONAL BANK OF
CHICAGO, located at 0 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, in lawful money
of the United States of America and in immediately available funds, the
principal amount of _____________ DOLLARS ($_________), or, if less, the unpaid
principal amount of the Term Loan made by the Lender pursuant to subsection 3.1
of the Credit Agreement, as hereinafter defined. The principal amount shall be
paid in the amounts and on the dated specified in subsection 3.3. The Company
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 6.1 and 6.2 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, Type and amount of the Term
Loan and the date and amount of each payment or prepayment of principal with
respect thereto, each conversion of all or a portion thereof to another Type,
each continuation of all or a portion thereof as the same Type and, in the case
of Eurodollar Loans, the length of each Interest Period with respect thereto.
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 obligations of the Company in respect of such Term Loan.
This Note (a) is one of the Term Notes referred to in the Credit and
Guarantee Agreement dated as of February __, 1997 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among the
Company, the Foreign Subsidiary Borrowers, the Lender, the other banks and
financial institutions from time to time parties thereto, The First National
Bank of Chicago, as agent and Xxxxxx Commercial Paper Inc., as Arranger and
Syndication 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. This Note is secured and guaranteed as
provided in the Loan Documents. Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security interest has
been granted, the nature and extent of the security and the guarantees, the
terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.
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.
ANACOMP, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
-2-
Schedule A
to Term Loan Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
-----------------------------------------------------------------------------------------------------------------------------------
Amount of ABR
Amount of ABR Amount Converted Amount of Principal Loans Converted to Unpaid Principal
Date Loans to ABR Loans of ABR Loans Repaid Eurodollar Loans Balance of ABR Loans Notation Made By
-----------------------------------------------------------------------------------------------------------------------------------
Schedule B
to Term Loan Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
Interest Period and Amount of Principal
Amount of Amount Converted Eurodollar Rate with of Eurodollar Loans
Date Eurodollar Loans to Eurodollar Loans Respect Thereto Repaid
----------------------------------------------------------------------------------------------------------
Amount of Eurodollar Unpaid Principal
Loans Converted to Balance of Eurodollar
Date ABR Loans Loans Notation Made By
------------------------------------------------------------------------------------
EXHIBIT B
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
GUARANTEE AND COLLATERAL AGREEMENT
made by
ANACOMP, INC.
in favor of
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent
Dated as of February 28, 1997
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
SECTION 1. DEFINED TERMS................................................... 1
1.1 Definitions........................................................ 1
1.2 Other Definitional Provisions...................................... 5
SECTION 2. GUARANTEE....................................................... 6
2.1 Guarantee.......................................................... 6
2.2 Right of Contribution.............................................. 6
2.3 No Subrogation..................................................... 6
2.4 Amendments, etc. with respect to the Borrower Obligations.......... 7
2.5 Guarantee Absolute and Unconditional............................... 7
2.6 Reinstatement...................................................... 8
2.7 Payments........................................................... 8
SECTION 3. GRANT OF SECURITY INTEREST...................................... 8
SECTION 4. REPRESENTATIONS AND WARRANTIES.................................. 9
4.1 Representations in Credit Agreement................................ 9
4.2 Title; No Other Liens.............................................. 9
4.3 Perfected First Priority Liens..................................... 10
4.4 Chief Executive Office............................................. 10
4.5 Inventory and Equipment............................................ 10
4.6 Farm Products...................................................... 10
4.7 Pledged Securities................................................. 10
4.8 Receivables........................................................ 10
4.9 Intellectual Property.............................................. 11
SECTION 5. COVENANTS....................................................... 11
5.1 Covenants in Credit Agreement...................................... 11
5.2 Delivery of Instruments and Chattel Paper.......................... 11
5.3 Maintenance of Insurance........................................... 11
5.4 Payment of Obligations............................................. 12
5.5 Maintenance of Perfected Security Interest; Further Documentation.. 12
5.6 Changes in Locations, Name, etc.................................... 12
5.7 Notices............................................................ 13
5.8 Pledged Securities................................................. 13
5.9 Receivables........................................................ 14
5.10 Intellectual Property............................................. 14
SECTION 6. REMEDIAL PROVISIONS............................................. 15
6.1 Certain Matters Relating to Receivables............................ 15
6.2 Communications with Obligors; Grantors Remain Liable............... 16
6.3 Pledged Stock...................................................... 17
6.4 Proceeds to be Turned Over To Administrative Agent................. 17
6.5 Application of Proceeds............................................ 18
6.6 Code and Other Remedies............................................ 18
i
PAGE
6.7 Private Sales...................................................... 19
6.8 Waiver; Deficiency................................................. 19
SECTION 7. THE ADMINISTRATIVE AGENT........................................ 19
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc........ 19
7.2 Duty of Administrative Agent....................................... 21
7.3 Execution of Financing Statements.................................. 21
7.4 Authority of Administrative Agent.................................. 21
SECTION 8. MISCELLANEOUS................................................... 22
8.1 Amendments in Writing.............................................. 22
8.2 Notices............................................................ 22
8.3 No Waiver by Course of Conduct; Cumulative Remedies................ 22
8.4 Enforcement Expenses; Indemnification.............................. 22
8.5 Successors and Assigns............................................. 23
8.6 Set-Off............................................................ 23
8.7 Counterparts....................................................... 23
8.8 Severability....................................................... 23
8.9 Section Headings................................................... 23
8.10 Integration....................................................... 24
8.11 GOVERNING LAW..................................................... 24
8.12 Submission To Jurisdiction; Waivers............................... 24
8.13 Acknowledgements.................................................. 24
8.14 WAIVER OF JURY TRIAL.............................................. 25
8.15 Additional Grantors............................................... 25
8.16 Judgment.......................................................... 25
8.17 Releases.......................................................... 25
ii
SCHEDULES
Schedule 1 Notice Addresses of Guarantors
Schedule 2 Description of Pledged Securities
Schedule 3 Filings and Other Actions Required to Perfect Security Interests
Schedule 4 Location of Jurisdiction of Organization and Chief Executive
Office
Schedule 5 Location of Inventory and Equipment
Schedule 6 Copyrights and Copyright Licenses; Patents and Patent Licenses;
Trademark and Trademark Licenses
Schedule 7 Immaterial Subsidiaries
Schedule 8 Existing Prior Liens
FORM OF
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of February 28, 1997,
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "GRANTORS"), in favor of THE FIRST
NATIONAL BANK OF CHICAGO, as Administrative Agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the banks and other financial institutions (the
"LENDERS") from time to time parties to the Credit and Guarantee Agreement,
dated as of February 28, 1997 (as amended, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT"), among ANACOMP, INC., an Indiana
corporation (the "COMPANY"), the Foreign Subsidiary Borrowers parties thereto
(together with the Company, the "BORROWERS"), XXXXXX COMMERCIAL PAPER INC., as
Arranger and Syndication Agent, the Lenders and the Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make extensions of credit to the Borrowers upon the terms and subject
to the conditions set forth therein;
WHEREAS, each Borrower is a member of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrowers to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, the Borrowers and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Borrowers under the Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 DEFINITIONS. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the 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, Farm
Products, Instruments and Inventory.
2
(b) The following terms shall have the following meanings:
"AGREEMENT": this Guarantee and Collateral Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.
"BORROWER OBLIGATIONS": in respect of any Borrower, the collective
reference to the unpaid principal of and interest on the Loans made to such
Borrower, the Reimbursement Obligations of such Borrower and all other
obligations and liabilities of such Borrower (including, without
limitation, interest accruing at the then applicable rate provided in the
Credit Agreement after the maturity of such Loans and Reimbursement
Obligations and interest accruing at the then applicable rate provided in
the Credit Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to such Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding, and including, with respect to the
Company, its guarantee obligations pursuant to Section 12 of the Credit
Agreement) to the Administrative Agent or any Lender (or, in the case of
any Hedge Agreement referred to below, any Affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement, this Agreement, the other Loan
Documents, any Letter of Credit or any Hedge Agreement entered into by such
Borrower with any Lender (or any Affiliate of any Lender) or any other
document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Administrative Agent or to the
Lenders that are required to be paid by such Borrower pursuant to the terms
of any of the foregoing agreements).
"COLLATERAL": as defined in Section 3.
"COLLATERAL ACCOUNT": any collateral account established by the
Administrative Agent as provided in Section 6.1 or 6.4.
"COPYRIGHTS": (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in SCHEDULE 6), all registrations and
recordings thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to
obtain all renewals thereof.
"COPYRIGHT LICENSES": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in
SCHEDULE 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright, to the extent the grant by such
Grantor of a security interest pursuant to this Agreement in its right,
title and interest in such Copyright License is not prohibited by such
Copyright License without the consent of any other party thereto, would not
give any other party to such Copyright License the right to terminate its
obligations thereunder, or is permitted with consent if all necessary
consents to such grant of a security interest have been obtained from the
other parties thereto (it being understood that the
3
foregoing shall not be deemed to obligate such Grantor to obtain such
consents); PROVIDED, that the foregoing limitation shall not affect, limit,
restrict or impair the grant by such Grantor of a security interest
pursuant to this Agreement in any money or other amounts due or to become
due under any such Copyright License.
"GENERAL INTANGIBLES": all "general intangibles" as such term is
defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in any event, including, without
limitation, with respect to any Grantor, all contracts, agreements,
instruments and indentures in any form, and portions thereof, to which such
Grantor is a party or under which such Grantor has any right, title or
interest or to which such Grantor or any property of such Grantor is
subject, as the same may from time to time be amended, supplemented or
otherwise modified, including, without limitation, (i) all rights of such
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of such Grantor to damages arising
thereunder and (iii) all rights of such Grantor to perform and to exercise
all remedies thereunder, in each case to the extent the grant by such
Grantor of a security interest pursuant to this Agreement in its right,
title and interest in such contract, agreement, instrument or indenture is
not prohibited by such contract, agreement, instrument or indenture without
the consent of any other party thereto, would not give any other party to
such contract, agreement, instrument or indenture the right to terminate
its obligations thereunder, or is permitted with consent if all necessary
consents to such grant of a security interest have been obtained from the
other parties thereto (it being understood that the foregoing shall not be
deemed to obligate such Grantor to obtain such consents); PROVIDED, that
the foregoing limitation shall not affect, limit, restrict or impair the
grant by such Grantor of a security interest pursuant to this Agreement in
any Receivable or any money or other amounts due or to become due under any
such contract, agreement, instrument or indenture.
"GUARANTOR OBLIGATIONS": with respect to any Guarantor, the
collective reference to (i) the Borrower Obligations of all Borrowers and
(ii) all obligations and liabilities of such Guarantor which may arise
under or in connection with this Agreement or any other Loan Document to
which such Guarantor is a party, in each case whether on account of
guarantee obligations, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Lenders that
are required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Loan Document).
"GUARANTORS": the collective reference to each Grantor other than the
Company.
"HEDGE AGREEMENTS": as to any Person, all interest rate swaps, caps
or collar agreements or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates or currency
exchange rates or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"IMMATERIAL SUBSIDIARY": the Subsidiaries of the Company listed on
Schedule 7.
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright Licenses, the
4
Patents, the Patent Licenses, the Trademarks and the Trademark Licenses,
and all rights to xxx at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom.
"INTERCOMPANY NOTE": any promissory note evidencing loans made by any
Grantor to the Company or any of its Subsidiaries.
"ISSUERS": the collective reference to each issuer of a Pledged
Security.
"NEW YORK UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"OBLIGATIONS": (i) in the case of each Borrower, its Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"PATENTS": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without
limitation, any of the foregoing referred to in SCHEDULE 6, (ii) 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 of the foregoing referred to in SCHEDULE
6, and (iii) all rights to obtain any reissues or extensions of the
foregoing.
"PATENT LICENSE": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use or sell
any invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in SCHEDULE 6, to the extent
the grant by such Grantor of a security interest pursuant to this Agreement
in its right, title and interest in such Patent License is not prohibited
by such Patent License without the consent of any other party thereto,
would not give any other party to such Patent License the right to
terminate its obligations thereunder, or is permitted with consent if all
necessary consents to such grant of a security interest have been obtained
from the other parties thereto (it being understood that the foregoing
shall not be deemed to obligate such Grantor to obtain such consents);
PROVIDED, that the foregoing limitation shall not affect, limit, restrict
or impair the grant by such Grantor of a security interest pursuant to this
Agreement in any money or other amounts due or to become due under any such
Patent License.
"PLEDGED NOTES": all Intercompany Notes at any time issued to any
Grantor and all other promissory notes issued to or held by any Grantor
(other than promissory notes issued in connection with extensions of trade
credit by any Grantor in the ordinary course of business).
"PLEDGED SECURITIES": the collective reference to the Pledged Notes
and the Pledged Stock.
"PLEDGED STOCK": the shares of Capital Stock listed on SCHEDULE 2,
together with any other shares, stock certificates, options or rights of
any nature whatsoever pledged pursuant to subsection 9.9 of the Credit
Agreement.
5
"PROCEEDS": all "proceeds" as such term is defined in Section 9-
306(1) of the Uniform Commercial Code in effect in the State of New York on the
date hereof and, in any event, shall include, without limitation, all dividends
or other income from the Pledged Securities, collections thereon or
distributions or payments with respect thereto.
"RECEIVABLE": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"SECURITIES ACT": the Securities Act of 1933, as amended.
"TRADEMARKS": (i) 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 all
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, and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in SCHEDULE 6, and (ii) the
right to obtain all renewals thereof.
"TRADEMARK LICENSE": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred to
in SCHEDULE 6, to the extent the grant by such Grantor of a security
interest pursuant to this Agreement in its right, title and interest in
such Trademark License is not prohibited by such Trademark License without
the consent of any other party thereto, would not give any other party to
such Trademark License the right to terminate its obligations thereunder,
or is permitted with consent if all necessary consents to such grant of a
security interest have been obtained from the other parties thereto (it
being understood that the foregoing shall not be deemed to obligate such
Grantor to obtain such consents); PROVIDED, that the foregoing limitation
shall not affect, limit, restrict or impair the grant by such Grantor of a
security interest pursuant to this Agreement in any money or other amounts
due or to become due under any such Trademark License.
"VEHICLES": all cars, trucks, trailers, construction and earth moving
equipment and other vehicles covered by a certificate of title law of any
state.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
6
SECTION 2. GUARANTEE
2.1 GUARANTEE. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Borrower Obligations of all Borrowers.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations of one or more
Borrowers may at any time and from time to time exceed the amount of the
liability of such Guarantor hereunder without impairing the guarantee contained
in this Section 2 or affecting the rights and remedies of the Administrative
Agent or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrowers may be free from any Borrower
Obligations.
(e) No payment made by any Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from any Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of any of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of such Borrower Obligations or any payment
received or collected from such Guarantor in respect of such Borrower
Obligations), remain liable for the Borrower Obligations of all Borrowers up to
the maximum liability of such Guarantor hereunder until all Borrower Obligations
are paid in full, no Letter of Credit shall be outstanding and the Commitments
are terminated.
2.2 RIGHT OF CONTRIBUTION. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Administrative Agent and the Lenders, and each Guarantor
shall remain liable to the Administrative Agent and the Lenders for the full
amount guaranteed by such Guarantor hereunder.
7
2.3 NO SUBROGATION. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against any Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Borrower Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from any Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Borrowers
on account of the Borrower Obligations are paid in full, no Letter of Credit
shall be outstanding and the Commitments are terminated. If any amount shall be
paid to any Guarantor on account of such subrogation rights at any time when all
of the Borrower Obligations shall not have been paid in full, such amount shall
be held by such Guarantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
2.4 AMENDMENTS, ETC. WITH RESPECT TO THE BORROWER OBLIGATIONS. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Borrower Obligations
continued, and the Borrower Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the
Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by the Administrative Agent or any Lender for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither
the Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.
2.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by the Administrative
Agent or any Lender upon the guarantee contained in this Section 2 or acceptance
of the guarantee contained in this Section 2; the Borrower Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the Borrowers
and any of the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon the guarantee contained in this Section 2.
Each Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon any Borrower or any of the Guarantors
with respect to the Borrower Obligations. Each Guarantor understands and agrees
that the guarantee contained in this Section 2 shall be construed as a
continuing,
8
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Credit Agreement or any other Loan Document,
any of the Borrower Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by any Borrower or any other Person against
the Administrative Agent or any Lender, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of any Borrower or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of any Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, the Administrative Agent or any Lender
may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against any Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Borrower Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Lender to make any such demand,
to pursue such other rights or remedies or to collect any payments from any
Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of any Borrower, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any Lender against any Guarantor.
For the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
2.6 REINSTATEMENT. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
any Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, any
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 PAYMENTS. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in the currency in which such payment is due pursuant to the Credit
Agreement at the relevant payment office specified in the Credit Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Administrative Agent,
and hereby grants to the Administrative Agent, for the ratable benefit of the
Lenders, a security interest in, all of the following property now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or
at any time in the future may acquire any right, title or interest
(collectively, the "COLLATERAL"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations,:
(a) all Accounts;
9
(b) all Chattel Paper;
(c) all Documents;
(d) all Equipment;
(e) all General Intangibles;
(f) all Instruments;
(g) all Intellectual Property;
(h) all Inventory;
(i) all Pledged Securities;
(j) all Vehicles;
(k) all books and records pertaining to the Collateral; and
(l) to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
4.1 REPRESENTATIONS IN CREDIT AGREEMENT. In the case of each
Guarantor, the representations and warranties set forth in Section 8 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Administrative Agent and each Lender
shall be entitled to rely on each of them as if they were fully set forth
herein, PROVIDED that each reference in each such representation and warranty to
the Company knowledge shall, for the purposes of this Section 4.1, be deemed to
be a reference to such Guarantor's knowledge.
4.2 TITLE; NO OTHER LIENS. Except for the security interest granted
to the Administrative Agent for the ratable benefit of the Lenders pursuant to
this Agreement and the other Liens permitted to exist on the Collateral by the
Credit Agreement, such Grantor owns each item of the Collateral free and clear
of any and all Liens or claims of others except Liens permitted to exist
pursuant to the Credit Agreement. No 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 Administrative
Agent, for the ratable benefit of the Lenders, pursuant to this Agreement or as
are permitted by the Credit Agreement.
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4.3 PERFECTED FIRST PRIORITY LIENS. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on SCHEDULE 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral in favor of the Administrative Agent, for the
ratable benefit of the Lenders, as collateral security for such Grantor's
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for (i) unrecorded Liens permitted by the
Credit Agreement which have priority over the Liens on the Collateral by
operation of law and (ii) Liens described on SCHEDULE 8 and except to the extent
that filings outside the United States might be required to perfect such
security interest in non-U.S. intellectual property.
4.4 CHIEF EXECUTIVE OFFICE. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on SCHEDULE 4.
4.5 INVENTORY AND EQUIPMENT. On the date hereof, the Inventory and
the Equipment (other than mobile goods) are kept at the locations listed on
SCHEDULE 5.
4.6 FARM PRODUCTS. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.7 PLEDGED SECURITIES. (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor, except that
the shares of Pledged Stock of any Issuer which is a Foreign Subsidiary
constitute no more than 65% of all the issued and outstanding Capital Stock of
such Issuer.
(b) All the shares of the Pledged Stock have been duly and validly
issued and, to the extent the same are shares of Capital Stock of a corporation,
are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Securities pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement.
4.8 RECEIVABLES. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent.
(b) Receivables in respect of which a Governmental Authority is the
obligor do not constitute more than 8%, in face amount, of all Receivables.
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(c) The amounts represented by such Grantor to the Lenders from time
to time as owing to such Grantor in respect of the Receivables will at such
times be accurate.
4.9 INTELLECTUAL PROPERTY. (a) SCHEDULE 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, to the best of such Grantor's knowledge, all
material Intellectual Property is valid, subsisting, unexpired and enforceable,
has not been abandoned and does not infringe the intellectual property rights of
any other Person.
(c) Except as set forth in SCHEDULE 6, on the date hereof, none of the
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual Property or such Grantor's ownership interest
therein, or (ii) which, if adversely determined, could reasonably be expected to
have a Material Adverse Effect.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative Agent and
the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 COVENANTS IN CREDIT AGREEMENT. In the case of each Guarantor,
such Guarantor shall comply with and perform each covenant set forth in the
Credit Agreement applicable thereto as if such Guarantor were a party to the
Credit Agreement.
5.2 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 Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement.
5.3 MAINTENANCE OF INSURANCE. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory, Equipment and Vehicles against loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the Administrative
Agent and (ii) insuring such Grantor, the Administrative Agent and the Lenders
against liability for personal injury and property damage relating to such
Inventory, Equipment and Vehicles, such policies to be in such form and amounts
and having such coverage as may be reasonably
12
satisfactory to the Administrative Agent and the Lenders. By its acceptance of
this Agreement the Administrative Agent and each Lender acknowledges its
satisfaction with the insurance policies of the Grantors in existence on the
Closing Date.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Administrative Agent of
written notice thereof, (ii) name the Administrative Agent as insured party or
loss payee, (iii) if reasonably requested by the Administrative Agent, include a
breach of warranty clause and (iv) be reasonably satisfactory in all other
respects to the Administrative Agent.
(c) The Borrower shall deliver to the Administrative Agent and the
Lenders a report of a reputable insurance broker with respect to such insurance
during the month of February in each calendar year and such supplemental reports
with respect thereto as the Administrative Agent may from time to time
reasonably request.
5.4 PAYMENT OF OBLIGATIONS. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon 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 such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.5 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION.
(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 4.3 and shall defend such security interest against the claims and
demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative 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 Administrative Agent may reasonably request, all in reasonable
detail.
(c) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby.
5.6 CHANGES IN LOCATIONS, NAME, ETC. Such Grantor will not, except
upon 15 days' prior written notice to the Administrative Agent and delivery to
the Administrative Agent of (a) all additional executed financing statements and
other documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided
13
for herein and (b) if applicable, a written supplement to SCHEDULE 5 showing any
additional location at which Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a location
other than those listed on SCHEDULE 5;
(ii) change the location of its chief executive office or sole place
of business from that referred to in Section 4.4; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become misleading.
5.7 NOTICES. Such Grantor will advise the Administrative Agent and
the Lenders promptly, in reasonable detail, of:
(a)any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Administrative Agent to exercise any of its
remedies hereunder; and
(b)of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5.8 PLEDGED SECURITIES. (a) If such Grantor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer, whether in addition to, in substitution of, as
a conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Administrative Agent and the Lenders, hold the same in trust for the
Administrative Agent and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Grantor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations, PROVIDED that the foregoing shall not require any
Grantor to so deliver any such Capital Stock of any Issuer which is a Foreign
Subsidiary if, as a result thereof, the Capital Stock of such Foreign Subsidiary
pledged hereunder would exceed 65% of all Capital Stock of such Foreign
Subsidiary. Any sums paid upon or in respect of the Pledged Securities upon the
liquidation or dissolution of any Issuer shall be paid over to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Pledged Securities or any property shall be
distributed upon or with respect to the Pledged Securities pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent,
be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the
14
Pledged Securities shall be received by such Grantor, such Grantor shall, until
such money or property is paid or delivered to the Administrative Agent, hold
such money or property in trust for the Lenders, segregated from other funds of
such Grantor, as additional collateral security for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
such Grantor will not (i) vote to enable, or take any other action to permit,
any Issuer to issue any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Pledged Securities or Proceeds thereof (except
pursuant to a transaction expressly permitted by the Credit Agreement), (iii)
create, incur or permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Pledged Securities or Proceeds thereof,
or any interest therein, except for the security interests created by this
Agreement or (iv) enter into any agreement or undertaking restricting the right
or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Pledged Securities or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the Pledged
Securities issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.8(a) with
respect to the Pledged Securities issued by it and (iii) the terms of Section
6.3(c) shall apply to it, MUTATIS MUTANDIS, with respect to all actions that may
be required of it pursuant to Section 6.3(c) with respect to the Pledged
Securities issued by it.
5.9 RECEIVABLES. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it that questions or calls
into doubt the validity or enforceability of more than 5% of the aggregate
amount of the then outstanding Receivables.
5.10 INTELLECTUAL PROPERTY. (a) Such Grantor (either itself or
through licensees) will (i) continue to use each material 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, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) use such Trademark with any appropriate notice of registration
and all other notices and legends required by applicable Requirements of Law,
(iv) not adopt or use any xxxx which is confusingly similar or a colorable
imitation of such Trademark unless the Administrative Agent, for the ratable
benefit of the Lenders, shall obtain a perfected security interest in such xxxx
pursuant to this Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark may become invalidated or impaired in any way.
15
(b) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any material Patent may become forfeited,
abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will employ
each material Copyright and (ii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
material portion of such Copyrights may become invalidated or otherwise
impaired. Such Grantor will not (either itself or through licensees) do any act
whereby any material portion of such Copyrights may fall into the public domain.
(d) Such Grantor (either itself or through licensees) will not do any
act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Grantor will notify the Administrative Agent and the Lenders
immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, 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, the United States Copyright Office or any court or tribunal in
any country) regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any State
of the United States, such Grantor shall report such filing to the
Administrative Agent within five Business Days after the last day of the fiscal
quarter in which such filing occurs. Upon request of the Administrative Agent,
such Grantor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Administrative Agent may
reasonably request to evidence the Administrative Agent's and the Lenders'
security interest in any Copyright, Patent or Trademark and the goodwill and
general intangibles of such Grantor relating thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any State of the United States, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the material Intellectual Property, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability.
(h) In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor shall (i) take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and 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.
16
SECTION 6. REMEDIAL PROVISIONS
6.1 CERTAIN MATTERS RELATING TO RECEIVABLES. (a) The Administrative
Agent shall have the right to make test verifications of the Receivables in any
manner and through any medium that it reasonably considers advisable, and each
Grantor shall furnish all such assistance and information as the Administrative
Agent may require in connection with such test verifications. At any time and
from time to time (but not more frequently than once per fiscal quarter), upon
the Administrative Agent's request and at the expense of the relevant Grantor,
such Grantor shall cause independent public accountants or others satisfactory
to the Administrative Agent to furnish to the Administrative Agent reports
showing reconciliations, aging and test verifications of, and trial balances
for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor to collect
such Grantor's Receivables, subject to the Administrative Agent's direction and
control, and the Administrative Agent may curtail or terminate said authority at
any time and only at any time after the occurrence and during the continuance of
an Event of Default. If required by the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, any payments
of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in
any event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative Agent if required,
in a Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Lenders only as provided in Section 6.5, and (ii) until so turned
over, shall be held by such Grantor in trust for the Administrative Agent and
the Lenders, segregated from other funds of such Grantor. Each such deposit of
Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.
(c) At the Administrative Agent's request, at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
deliver to the Administrative Agent all original and other documents evidencing,
and relating to, the agreements and transactions which gave rise to the
Receivables, including, without limitation, all original orders, invoices and
shipping receipts.
6.2 COMMUNICATIONS WITH OBLIGORS; GRANTORS REMAIN LIABLE. (a) The
Administrative Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent's satisfaction the existence, amount and terms of any
Receivables.
(b) Upon the request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables that the Receivables have been assigned to
the Administrative Agent for the ratable benefit of the Lenders and that
payments in respect thereof shall be made directly to the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Administrative Agent nor any Lender shall have any obligation or liability under
any Receivable (or any agreement giving rise thereto) by reason of or arising
out of this Agreement or the receipt by the Administrative Agent or any Lender
of any payment relating thereto, nor shall the Administrative Agent or any
Lender be obligated in any manner to perform any of the obligations of
17
any Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
6.3 PLEDGED STOCK. (a) Unless an Event of Default shall have occurred
and be continuing and the Administrative Agent shall have given notice to the
relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case paid in the normal
course of business of the relevant Issuer and consistent with past practice, to
the extent permitted in the Credit Agreement, and to exercise all voting and
corporate rights with respect to the Pledged Securities; PROVIDED, HOWEVER, that
no vote shall be cast or corporate right exercised or other action taken which,
in the Administrative Agent's reasonable judgment, would impair the Collateral
or which would be inconsistent with or result in any violation of any provision
of the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Pledged Securities and make application thereof to the
Obligations in such order as the Credit Agreement shall prescribe, and (ii) any
or all of the Pledged Securities shall be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent or its nominee
may thereafter exercise (x) all voting, corporate and other rights pertaining to
such Pledged Securities at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Pledged Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the
exercise by any Grantor or the Administrative Agent of any right, privilege or
option pertaining to such Pledged Securities, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Securities with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Pledged Securities pledged by such Grantor hereunder to comply with any
instruction received by it from the Administrative Agent in writing that (i)
states that an Event of Default has occurred and is continuing and (ii) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying.
6.4 PROCEEDS TO BE TURNED OVER TO ADMINISTRATIVE AGENT. In addition
to the rights of the Administrative Agent and the Lenders specified in Section
6.1 with respect to payments of
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Receivables, if an Event of Default shall occur and be continuing, all Proceeds
received by any Grantor consisting of cash, checks and other near-cash items
shall be held by such Grantor in trust for the Administrative Agent and the
Lenders, segregated from other funds of such Grantor, and shall, forthwith upon
receipt by such Grantor, be turned over to the Administrative Agent in the exact
form received by such Grantor (duly indorsed by such Grantor to the
Administrative Agent, if required). All Proceeds received by the Administrative
Agent hereunder shall be held by the Administrative Agent in a Collateral
Account maintained under its sole dominion and control. All Proceeds while held
by the Administrative Agent in a Collateral Account (or by such Grantor in trust
for the Administrative 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 Section 6.5.
6.5 APPLICATION OF PROCEEDS. At such intervals as may be agreed upon
by the Company and the Administrative Agent, or, if an Event of Default shall
have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of Proceeds held in
any Collateral Account in payment of the Obligations in such order as the Credit
Agreement prescribes, and any part of such funds which the Credit Agreement does
not require to be applied in payment of the Obligations and which Administrative
Agent deems not required as collateral security for the Obligations shall be
paid over from time to time by the Administrative Agent to the Company 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, no
Letters of Credit shall be outstanding and the Commitments shall have terminated
shall be paid over to the Company or to whomsoever may be lawfully entitled to
receive the same.
6.6 CODE AND OTHER REMEDIES. If an Event of Default shall occur and
be continuing, the Administrative Agent, on behalf of the 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 New York UCC
or any other applicable law. Without limiting the generality of the foregoing,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor 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 Administrative 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 Administrative 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 any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Grantor's premises
or elsewhere. The Administrative Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 6.6, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Administrative Agent
19
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 Credit Agreement shall prescribe, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the New York UCC, need the Administrative Agent account for the
surplus, if any, to any Grantor. To the extent permitted by applicable law,
each Grantor waives all claims, damages and demands it may acquire against the
Administrative 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 Business Days before such sale or other disposition.
6.7 PRIVATE SALES. (a) Each Grantor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Stock, by reason of certain prohibitions contained in the Securities Act
and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a sale
of any of the Pledged Stock for the period of time necessary to permit the
Issuer thereof to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such Issuer would agree
to do so.
(b) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Administrative Agent and
the Lenders, that the Administrative Agent and the Lenders have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 6.7 shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred under the Credit Agreement.
6.8 WAIVER; DEFICIENCY. Each Grantor waives and agrees not to assert
any rights or privileges which it may acquire under Section 9-112 of the New
York UCC. Each Grantor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT, ETC. (a)
Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and
20
authority in the place and stead of such Grantor and in the name of such Grantor
or in its own name, for the purpose of carrying out the terms of this Agreement,
to take any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or with respect to any other Collateral and file any claim or
take any other action or proceeding in any court of law or equity or
otherwise reasonably deemed appropriate by the Administrative Agent for the
purpose of collecting any and all such moneys due under any Receivable or
with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Administrative Agent may reasonably request to evidence the
Administrative Agent's and the Lenders' security interest in such
Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section 6.6
or 6.7, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct;(2) ask or demand for, collect, and 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)
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) 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 portion thereof and to enforce any other right in respect
of any Collateral;(5) defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral;(6) settle, compromise or
adjust any such suit, action or proceeding and, in connection therewith,
give such discharges or releases as the Administrative Agent may deem
appropriate;(7) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such conditions,
and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (8) generally, sell, transfer, pledge and make
any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such
21
Grantor's expense, at any time, or from time to time, all acts and things
which the Administrative Agent reasonably deems necessary to protect,
preserve or realize upon the Collateral and the Administrative Agent's and
the Lenders' security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due Revolving Credit Loans that are ABR Loans under the
Credit Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.
(d) Each Grantor 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.
7.2 DUTY OF ADMINISTRATIVE AGENT. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any Lender nor any of their respective officers,
directors, 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 any Grantor 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 Administrative Agent and the Lenders hereunder are solely to
protect the Administrative Agent's and the Lenders' interests in the Collateral
and shall not impose any duty upon the Administrative Agent or any Lender to
exercise any such powers. The Administrative 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 any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
7.3 EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402 of
the New York UCC and any other applicable law, each Grantor authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Administrative
Agent reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. A photographic or other reproduction
of this Agreement shall be sufficient as a
22
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction.
7.4 AUTHORITY OF ADMINISTRATIVE AGENT. Each Grantor acknowledges that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative 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 no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 AMENDMENTS IN WRITING. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by each affected Grantor and the Administrative
Agent, PROVIDED that any provision of this Agreement imposing obligations on any
Grantor may be waived by the Administrative Agent in a written instrument
executed by the Administrative Agent of the Credit Agreement.
8.2 NOTICES. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 14.2 of the Credit Agreement; PROVIDED that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on SCHEDULE 1.
8.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any 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 Administrative 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 Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
8.4 ENFORCEMENT EXPENSES; INDEMNIFICATION. (a) Each Guarantor agrees
to pay or reimburse each Lender and the Administrative Agent for all its costs
and expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the fees and disbursements of counsel to each
Lender and of counsel to the Administrative Agent.
23
(b) Each Guarantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Guarantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Borrower would be required to do so pursuant to subsection 15.5 of the Credit
Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns; PROVIDED
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 SET-OFF. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Lender at any time and from time to time while an
Event of Default shall have occurred and be continuing, without notice to such
Grantor or any other Grantor, any such notice being expressly waived by each
Grantor, to set-off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such Lender to or for the credit or the
account of such Grantor, or any part thereof in such amounts as the
Administrative Agent or such Lender may elect, against and on account of the
obligations and liabilities of such Grantor to the Administrative Agent or such
Lender hereunder and claims of every nature and description of the
Administrative Agent or such Lender against such Grantor, in any currency,
whether arising hereunder, under the Credit Agreement, any other Loan Document
or otherwise, as the Administrative Agent or such Lender may elect, whether or
not the Administrative Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Administrative Agent and each Lender shall notify such Grantor
promptly of any such set-off and the application made by the Administrative
Agent or such Lender of the proceeds thereof, PROVIDED that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of the Administrative Agent and each Lender under this Section 8.6 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Administrative Agent or such Lender may have.
8.7 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such
24
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
8.9 SECTION HEADINGS. The Section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
8.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 SUBMISSION TO JURISDICTION; WAIVERS. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 or at such other address
of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any consequential damages.
25
8.13 ACKNOWLEDGEMENTS. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Grantor arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative
Agent and Lenders, 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 Grantors and the Lenders.
8.14 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.15 ADDITIONAL GRANTORS. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to subsection 10.9 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.16 JUDGMENT. (a) If for the purpose of obtaining judgment in any
court it is necessary to convert a sum due hereunder in one currency into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase the first currency with such other currency in the city in which it
normally conducts its foreign exchange operation for the first currency on the
Business Day preceding the day on which final judgment is given.
(b) The obligation of each Grantor in respect of any sum due from it
to the Administrative Agent or any Lender hereunder shall, notwithstanding any
judgment in a currency (the "JUDGMENT CURRENCY") other than that in which such
sum is denominated in accordance with the applicable provisions of the Loan
Documents (the "AGREEMENT CURRENCY"), be discharged only to the extent that on
the Business Day following receipt by the Administrative Agent or such Lender of
any sum adjudged to be so due in the Judgment Currency, the Administrative Agent
or such Lender may in accordance with normal banking procedures purchase the
Agreement Currency with the Judgment Currency; if the amount of Agreement
Currency so purchased is less than the sum originally due to such Lender in the
Agreement Currency, such Grantor agrees notwithstanding any such judgment to
indemnify such Lender against such loss, and if the amount of the Agreement
Currency so purchased exceeds the sum originally due to the Administrative Agent
or any Lender the Administrative Agent or, such Lender agrees to remit to such
Borrower such excess.
26
8.17 RELEASES. (a) At such time as the Loans, the Reimbursement
Obligations and the other Obligations shall have been paid in full, the
Commitments have been terminated and no Letters of Credit shall be outstanding,
the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At
the request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. At the request and sole expense of the Company, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement;
PROVIDED that the Company shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Subsidiary Guarantor and the terms
of the sale or other disposition in reasonable detail, including the price
thereof and any expenses in connection therewith, together with a certification
by the Company stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.
27
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
and Collateral Agreement to be duly executed and delivered as of the date first
above written.
ANACOMP, INC.
By:
-------------------------
Title:
THE FIRST NATIONAL BANK OF CHICAGO, as
Administrative Agent
By:___________________________
Title:
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of February 28, 1997 (the "AGREEMENT"), made by
the Grantors parties thereto for the benefit of The First National Bank of
Chicago, as Administrative Agent. The undersigned agrees for the benefit of the
Administrative Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.
2. The undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.8(a) of
the Agreement.
3. The terms of Sections 6.3(a) and 6.7 of the Agreement shall apply to
it, MUTATIS MUTANDIS, with respect to all actions that may be required of it
pursuant to Section 6.3(a) or 6.7 of the Agreement.
[NAME OF ISSUER]
By
Title
------------------------------
Address for Notices:
-------------------------
------------------------------
Fax:
------------------------------
-------------------------
Annex 1 to
GUARANTEE AND COLLATERAL AGREEMENT
ASSUMPTION AGREEMENT, dated as of _____________, made by
______________________________, a ______________ corporation (the "ADDITIONAL
GRANTOR"), in favor of The First National Bank of Chicago, as administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT") for the banks and other
financial institutions (the "LENDERS") parties to the Credit Agreement referred
to below. All capitalized terms not defined herein shall have the meaning
ascribed to them in such Credit Agreement.
W I T N E S S E T H :
WHEREAS, Anacomp, Inc. (the "COMPANY"), certain of its Foreign
Subsidiaries, the Lenders and the Administrative Agent have entered into a
Credit Agreement, dated as of February 28, 1997 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT");
WHEREAS, in connection with the Credit Agreement, the Company and
certain of its Subsidiaries (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of February 28, 1997 (as
amended, supplemented or otherwise modified from time to time, the "GUARANTEE
AND COLLATERAL AGREEMENT") in favor of the Administrative Agent for the benefit
of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. GUARANTEE AND COLLATERAL AGREEMENT. By executing and delivering
this Assumption Agreement, the Additional Grantor, as provided in Section 8.15
of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral Agreement as a Grantor thereunder with the same force
and effect as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in Schedules ____________ to
the Guarantee and Collateral Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 3 of the Guarantee and
______________________
* Refer to each Schedule which needs to be supplemented.
Collateral Agreement is true and correct on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
Name:
Title:
-3-
EXHIBIT C
Texas
DEED OF TRUST AND SECURITY AGREEMENT
from
ANACOMP, INC., Grantor
to
XXXXX X. XXXXXXXXXX, Trustee
for the use and
benefit of
THE FIRST NATIONAL BANK OF CHICAGO, Beneficiary
DATED AS OF FEBRUARY ___, 1997
After recording, please return to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
a partnership which includes
professional corporations
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xxxx X. Xxxxxxxx, Esq.
Texas
DEED OF TRUST AND SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT, dated as of February ,
1997 is made by ANACOMP, INC., an Indiana corporation, whose address is 00000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000, to XXXXX X. XXXXXXXXXX, an
individual, ("Trustee") whose address is Xxxxxxx Xxxxxxx & Xxxxxxxx, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, for the use and benefit of THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association ("Beneficiary"), as
administrative agent for the Lenders (as defined in the Credit Agreement
hereinafter defined), whose address is Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000. References to this "Deed of Trust" shall mean this instrument
and any and all renewals, modifications, amendments, supplements, extensions,
consolidations, substitutions, spreaders and replacements of this instrument.
BACKGROUND
A. Grantor is the owner of the parcel(s) of real property described
on Schedule A attached (such real property, together with all of the buildings,
improvements, structures and fixtures now or subsequently located thereon (the
"Improvements"), being collectively referred to as the "Real Estate").
B. Grantor is a party to that certain Credit Agreement dated as of
even date herewith (as the same may be amended, supplemented, modified,
extended, restated or replaced from time to time, the "Credit Agreement") among
Grantor, each Foreign Subsidiary Borrower, the several banks and other financial
institutions from time to time parties thereto (the "Lenders") and The First
National Bank of Chicago, as administrative agent for the Lenders. All defined
terms used and not defined herein shall have the meanings assigned thereto in
the Credit Agreement.
C. Pursuant to the Credit Agreement, (i) certain of the Lenders have
agreed to make revolving credit loans to Grantor (the "Revolving Credit Loans");
(ii) certain of the Lenders have agreed to make term loans to Grantor (the "Term
Loans"); (iii) certain of the Lenders have agreed to make revolving credit loans
in any Available Foreign Currency to Grantor or in U.S. Dollars or any Available
Foreign Currency to any Foreign Subsidiary Borrower (the "Multicurrency Loans");
and (iv) the Issuing Lender has agreed to issue letters of credit for the
account of Grantor. The maximum aggregate principal amount of the Loans and the
2
Letter of Credit Obligations outstanding at any one time shall not exceed
$80,000,000.
D. The Loans may be evidenced by promissory notes of Grantor made
payable to the order of the relevant Lender (as the same may be amended,
supplemented, modified, extended, restated or replaced from time to time, the
"Notes"). Each Note bears interest at the rate stated in such Note; references
in this Deed of Trust to the "Default Rate" shall mean, at any time, the
interest rate applicable to overdue principal amounts of the Loans as provided
in the Credit Agreement. The obligation of Grantor to reimburse the Issuing
Lender for amounts drawn under Letters of Credit (the "Reimbursement
Obligation") is governed by the section of the Credit Agreement entitled
"Letters of Credit."
E. It is a condition precedent to the obligation of the Lenders to
make their respective Loans to Grantor and of the Issuing Lender to issue the
Letters of Credit for the account of Grantor that Grantor shall have executed
and delivered this Deed of Trust to Beneficiary for the benefit of Beneficiary
and the other Lenders.
NOW, THEREFORE, in consideration of the premises and to induce
Beneficiary and the other Lenders to make their respective Loans to Grantor and
the Issuing Lender to issue the Letters of Credit for the account of Grantor,
Grantor hereby agrees with Beneficiary, for the benefit of Beneficiary and the
other Lenders as follows:
GRANTING CLAUSES
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Grantor agrees that to secure:
(a) (i) the repayment of the indebtedness evidenced by the Notes, and
(ii) all interest (including, without limitation, interest accruing after
the maturity of the Loans and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to Grantor whether or not a
claim for post-filing or post-petition interest is allowed in such
proceeding) and fees, indemnities, costs, expenses (including, without
limitation, all reasonable fees and disbursements of counsel to Beneficiary
or to the Lenders that are required to be paid by Grantor pursuant to the
terms of the Credit Agreement or this Deed of Trust) or otherwise payable
thereon, (iii) payment of the Reimbursement Obligation with respect to the
Letters of Credit, whether in respect of any drawings under any Letters of
Credit, fees, commissions, expenses or otherwise and (iv) all obligations
in respect of Hedge Agreements with any Lender (the items set forth in
clauses
3
(i), (ii), (iii) and (iv) being referred to collectively as the
"Indebtedness"); and
(b) the performance of all covenants, agreements, obligations and
liabilities of Grantor (the "Obligations") under or pursuant to the
provisions of the Credit Agreement, the Notes, this Deed of Trust, any
other document securing payment of the Indebtedness (the "Security
Documents") and any amendments, supplements, extensions, renewals,
restatements, replacements or modifications of any of the foregoing (the
Notes, the Security Documents and all other documents and instruments from
time to time evidencing, securing or guaranteeing the payment of the
Indebtedness or the performance of the Obligations, as any of the same may
be amended, supplemented, extended, renewed, restated, replaced or modified
from time to time, are collectively referred to as the "Loan Documents");
GRANTOR HEREBY CONVEYS TO TRUSTEE AND HEREBY GRANTS, ASSIGNS, TRANSFERS AND SETS
OVER TO TRUSTEE AND ALSO TO SUBSTITUTE TRUSTEE (AS DEFINED BELOW), IN TRUST WITH
POWER OF SALE FOR THE USE AND BENEFIT OF BENEFICIARY, AND GRANTS BENEFICIARY AND
TRUSTEE A SECURITY INTEREST IN:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever of
Grantor, in possession or expectancy, in and to the Real Estate or any part
thereof;
(C) all right, title and interest of Grantor in, to and under all
easements, rights of way, gores of land, streets, ways, alleys, passages,
sewer rights, waters, water courses, water and riparian rights, development
rights, air rights, mineral rights and all estates, rights, titles,
interests, privileges, licenses, tenements, hereditaments and appurtenances
belonging, relating or appertaining to the Real Estate, and any reversions,
remainders, rents, issues, profits and revenue thereof and all land lying
in the bed of any street, road or avenue, in front of or adjoining the Real
Estate to the center line thereof;
(D) all of the fixtures, chattels, business machines, machinery,
apparatus, equipment, furnishings, fittings and articles of personal
property of every kind and nature whatsoever, and all appurtenances and
additions thereto and substitutions or replacements thereof (together with,
in each case, attachments, components, parts and accessories) currently
owned or subsequently acquired by Grantor and now or subsequently attached
to, or contained in or used or usable in any way in connection with any
operation or letting of the Real Estate, including but without limiting the
generality of the foregoing, all screens, awnings, shades, blinds,
curtains, draperies, artwork, carpets, rugs,
4
storm doors and windows, furniture and furnishings, heating, electrical,
and mechanical equipment, lighting, switchboards, plumbing, ventilating,
air conditioning and air-cooling apparatus, refrigerating, and incinerating
equipment, escalators, elevators, loading and unloading equipment and
systems, stoves, ranges, laundry equipment, cleaning systems (including
window cleaning apparatus), telephones, communication systems (including
satellite dishes and antennae), televisions, computers, sprinkler systems
and other fire prevention and extinguishing apparatus and materials,
security systems, motors, engines, machinery, pipes, pumps, tanks,
conduits, appliances, fittings and fixtures of every kind and description
(all of the foregoing in this paragraph (D) being referred to as the
"Equipment");
(E) all right, title and interest of Grantor in and to all
substitutes and replacements of, and all additions and improvements to, the
Real Estate and the Equipment, subsequently acquired by or released to
Grantor or constructed, assembled or placed by Grantor on the Real Estate,
immediately upon such acquisition, release, construction, assembling or
placement, including, without limitation, any and all building materials
whether stored at the Real Estate or offsite, and, in each such case,
without any further mortgage, conveyance, assignment or other act by
Grantor;
(F) all right, title and interest of Grantor in, to and under all
leases, subleases, underlettings, concession agreements, management
agreements, licenses and other agreements relating to the use or occupancy
of the Real Estate or the Equipment or any part thereof, now existing or
subsequently entered into by Grantor and whether written or oral and all
guarantees of any of the foregoing (collectively, as any of the foregoing
may be amended, restated, extended, renewed or modified from time to time,
the "Leases"), and all rights of Grantor in respect of cash and securities
deposited thereunder and the right to receive and collect the revenues,
income, rents, issues and profits thereof, together with all other rents,
royalties, issues, profits, revenue, income and other benefits arising from
the use and enjoyment of the Trust Property (as defined below)
(collectively, the "Rents");
(G) all trade names, trade marks, logos, copyrights, good will and
books and records relating to or used in connection with the operation of
the Real Estate or the Equipment or any part thereof; all general
intangibles related to the operation of the Improvements now existing or
hereafter arising;
(H) all unearned premiums under insurance policies now or
subsequently obtained by Grantor relating to the Real
5
Estate or Equipment and Grantor's interest in and to all proceeds of any
such insurance policies (including title insurance policies) including the
right to collect and receive such proceeds, subject to the provisions
relating to insurance generally set forth below; and all awards and other
compensation, including the interest payable thereon and the right to
collect and receive the same, made to the present or any subsequent owner
of the Real Estate or Equipment for the taking by eminent domain,
condemnation or otherwise, of all or any part of the Real Estate or any
easement or other right therein;
(I) all right, title and interest of Grantor in and to (i) all
contracts from time to time executed by Grantor or any manager or agent on
its behalf relating to the ownership, construction, maintenance, repair,
operation, occupancy, sale or financing of the Real Estate or Equipment or
any part thereof and all agreements relating to the purchase or lease of
any portion of the Real Estate or any property which is adjacent or
peripheral to the Real Estate, together with the right to exercise such
options and all leases of Equipment (collectively, the "Contracts"), (ii)
all consents, licenses, building permits, certificates of occupancy and
other governmental approvals relating to construction, completion,
occupancy, use or operation of the Real Estate or any part thereof
(collectively, the "Permits") and (iii) all drawings, plans, specifications
and similar or related items relating to the Real Estate (collectively, the
"Plans");
(J) any and all monies now or subsequently on deposit for the payment
of real estate taxes or special assessments against the Real Estate or for
the payment of premiums on insurance policies covering the foregoing
property or otherwise on deposit with or held by Beneficiary as provided in
this Deed of Trust; all capital, operating, reserve or similar accounts
held by or on behalf of Grantor and related to the operation of the Trust
Property, whether now existing or hereafter arising and all monies held in
any of the foregoing accounts and any certificates or instruments related
to or evidencing such accounts;
(K) all accounts and revenues arising from the operation of the
Improvements including, without limitation, (i) any right to payment now
existing or hereafter arising for rental of hotel rooms or other space or
for goods sold or leased or for services rendered, whether or not yet
earned by performance, arising from the operation of the Improvements or
any other facility on the Trust Property and (ii) all rights to payment
from any consumer credit-charge card organization or entity including,
without limitation, payments arising from the use of the American Express
Card, the Visa Card, the Xxxxx Xxxxxxx Card, the Mastercard or any other
credit card, including those now existing or hereafter
6
created, substitutions therefor, proceeds thereof (whether cash or
non-cash, movable or immovable, tangible or intangible) received upon the
sale, exchange, transfer, collection or other disposition or substitution
thereof and any and all of the foregoing and proceeds therefrom; and
(L) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now owned or
held or subsequently acquired by Grantor and described in the foregoing clauses
(A) through (E) are collectively referred to as the "Premises", and those
described in the foregoing clauses (A) through (L) are collectively referred to
as the "Trust Property").
TO HAVE AND TO HOLD the Trust Property and the rights and privileges
hereby granted unto Trustee, Substitute Trustee, their successors and assigns
for the uses and purposes set forth, until the Indebtedness is fully paid and
the Obligations fully performed.
TERMS AND CONDITIONS
Grantor further represents, warrants, covenants and agrees with
Trustee and Beneficiary as follows:
1. WARRANTY OF TITLE. Grantor warrants that Grantor has good title
to the Real Estate in fee simple and good title to the rest of the Trust
Property, subject only to the matters that are set forth in Schedule B of the
title insurance policy or policies being issued to Beneficiary to insure the
lien of this Deed of Trust (the "Permitted Exceptions") and Grantor shall
warrant, defend and preserve such title and the rights granted by this Deed of
Trust with respect thereto against all claims of all persons and entities.
Grantor further warrants that it has the right to grant this Deed of Trust.
2. PAYMENT OF INDEBTEDNESS. Grantor shall pay the Indebtedness at
the times and places and in the manner specified in the Notes and shall perform
all the Obligations.
3. REQUIREMENTS. (a) Grantor shall promptly comply with, or cause
to be complied with, and conform to all present and future laws, statutes,
codes, ordinances, orders, judgments, decrees, rules, regulations and
requirements, and irrespective of the nature of the work to be done, of each of
the United States of America, any State and any municipality, local government
or other political subdivision thereof and any agency, department, bureau,
board, commission or other instrumentality of any of them, now existing or
subsequently created (collectively, "Governmental Authority") which has
jurisdiction over the Trust Property and all covenants, restrictions and
conditions now or later of record which may be applicable to any of the Trust
7
Property, or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or reconstruction of any of the Trust Property.
All present and future laws, statutes, codes, ordinances, orders, judgments,
decrees, rules, regulations and requirements of every Governmental Authority
applicable to Grantor or to any of the Trust Property and all covenants,
restrictions, and conditions which now or later may be applicable to any of the
Trust Property are collectively referred to as the "Legal Requirements".
(b) From and after the date of this Deed of Trust, Grantor shall not
by act or omission permit any building or other improvement on any premises not
subject to this Deed of Trust to rely on the Premises or any part thereof or any
interest therein to fulfill any Legal Requirement, and Grantor hereby assigns to
Beneficiary any and all rights to give consent for all or any portion of the
Premises or any interest therein to be so used.
Grantor shall not by act or omission impair the integrity of any of the Real
Estate so as to constitute an illegal subdivision or to prohibit the Premises
and Improvements from being conveyed as one zoning or tax lot. Grantor
represents that the Premises are not part of a larger tract of land owned by
Grantor or its affiliates or otherwise considered as part of one zoning or tax
lot, or, if they are that any authorization or variance required for the
subdivision of such larger tract which a sale of the Premises would entail has
been obtained from all appropriate Governmental Authorities so that the Premises
and Improvements constitute one zoning or tax lot capable of being conveyed as
such. Any act or omission by Grantor which would result in a violation of any
of the provisions of this subsection shall be void.
4. PAYMENT OF TAXES AND OTHER IMPOSITIONS. (a) Promptly when due,
Grantor shall pay and discharge all taxes of every kind and nature (including,
without limitation, all real and personal property, income, franchise,
withholding, transfer, gains, profits and gross receipts taxes), all charges for
any easement or agreement maintained for the benefit of any of the Trust
Property, all general and special assessments, levies, permits, inspection and
license fees, all water and sewer rents and charges and all other public charges
even if unforeseen or extraordinary, imposed upon or assessed against or which
may become a lien on any of the Trust Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Grantor shall, within 30 days a request by Beneficiary, deliver
to Beneficiary (i) original or copies of receipted bills and cancelled checks
evidencing payment of such Imposition if it is a real estate tax or other public
charge and (ii) evidence acceptable to Beneficiary showing the payment of any
other such Imposition. If by law any Imposition, at Grantor's option, may be
paid in installments (whether or not interest shall accrue on the unpaid balance
of such Imposition), Grantor may elect to pay
8
such Imposition in such installments and shall be responsible for the payment of
such installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of Trustee or
Beneficiary under this Deed of Trust or otherwise, without notice or demand to
Grantor, to pay any Imposition after the date such Imposition shall have become
due, and to add to the Indebtedness the amount so paid, together with interest
from the time of payment at the Default Rate. Any sums paid by Trustee or
Beneficiary in discharge of any Impositions shall be (i) a charge on the
Premises secured hereby prior to any right or title to, interest in, or claim
upon the Premises subordinate to the lien of this Deed of Trust, and (ii)
payable on demand by Grantor to Trustee or Beneficiary, as the case may be,
together with interest at the Default Rate as set forth above.
(c) Grantor shall not claim, demand or be entitled to receive any
credit or credits toward the satisfaction of this Deed of Trust or on any
interest payable thereon for any taxes assessed against the Trust Property or
any part thereof, and shall not claim any deduction from the taxable value of
the Trust Property by reason of this Deed of Trust.
(d) Grantor shall have the right before any delinquency occurs to
contest or object in good faith to the amount or validity of any Imposition by
appropriate legal proceedings, but such right shall not be deemed or construed
in any way as relieving, modifying, or extending Grantor's covenant to pay any
such Imposition at the time and in the manner provided in this Section unless
(i) Grantor has given prior written notice to Beneficiary of Grantor's intent so
to contest or object to an Imposition, (ii) Grantor shall demonstrate to
Beneficiary's satisfaction that the legal proceedings shall operate conclusively
to prevent the sale of the Trust Property, or any part thereof, to satisfy such
Imposition prior to final determination of such proceedings and (iii) Grantor
shall furnish a good and sufficient bond or surety as requested by and
reasonably satisfactory to Beneficiary in the amount of the Impositions which
are being contested plus any interest and penalty which may be imposed thereon
and which could become a charge against the Real Estate or any part of the Trust
Property.
(e) Upon written notice to Grantor, Beneficiary after an Event of
Default (as defined below) shall be entitled to require Grantor to pay monthly
in advance to Beneficiary the equivalent of 1/12th of the estimated annual
Impositions. Beneficiary may commingle such funds with its own funds and
Grantor shall not be entitled to interest thereon.
5. INSURANCE. (a) Grantor shall maintain or cause to be maintained
on all of the Premises:
(i) property insurance against loss or damage by fire, lightning,
windstorm, tornado, water damage, flood,
9
earthquake and by such other further risks and hazards as now are or
subsequently may be covered by an "all risk" policy or a fire policy
covering "special" causes of loss. The policy shall include building
ordinance law endorsements and the policy limits for each policy shall be
automatically reinstated after each loss. Notwithstanding any of the
foregoing, such automatic reinstatement of policy limits shall not be
required of flood and earthquake insurance policies;
(ii) comprehensive general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language of such endorsement), covering all claims for personal injury,
bodily injury or death, or property damage occurring on, in or about the
Premises in an amount not less than $10,000,000 combined single limit with
respect to injury and property damage relating to any one occurrence plus
such excess limits as Beneficiary shall request from time to time;
(iii) when and to the extent reasonably required by Beneficiary,
insurance against loss or damage by any other risk commonly insured against
by persons occupying or using like properties in the locality or localities
in which the Real Estate is situated;
(iv) insurance against rent loss, extra expense or business
interruption (and/or soft costs, in the case of new construction), if
applicable, in amounts satisfactory to Beneficiary, but not less than one
year's gross rent or gross income;
(v) during the course of any construction or repair of Improvements,
comprehensive general liability insurance under a policy including the
"broad form CGL endorsement" (or which incorporates the language of such
endorsement), (including coverage for elevators and escalators, if any).
The policy shall include coverage for independent contractors and completed
operations. The completed operations coverage shall stay in effect for two
years after construction of any Improvements has been completed. The
policy shall provide coverage on an occurrence basis against claims for
personal injury, bodily injury, death or property damage occurring on, in
or about the Premises and the adjoining streets, sidewalks and passageways,
such insurance to afford immediate minimum protection to a limit of not
less than that required by Beneficiary with respect to personal injury,
bodily injury or death to any one or more persons or damage to property;
(vi) during the course of any construction or repair of the
Improvements, workers' compensation insurance (including employer's
liability insurance) for all employees of Grantor engaged on or with
respect to the Premises in such amounts
10
as are reasonably satisfactory to Beneficiary, but in no event less than
the limits established by law;
(vii) during the course of any construction, addition, alteration or
repair of the Improvements, builder's risk completed value form insurance
against "all risks of physical loss," including collapse, water damage,
flood and earthquake and transit coverage, during construction or repairs
of the Improvements, with deductible approved by Beneficiary, in
nonreporting form, covering the total value of work performed and
equipment, supplies and materials furnished (with an appropriate limit for
soft costs in the case of construction);
(viii) boiler and machinery property insurance covering pressure
vessels, air tanks, boilers, machinery, pressure piping, heating, air
conditioning and elevator equipment and escalator equipment, provided the
Improvements contain equipment of such nature, and insurance against rent,
extra expense, business interruption and soft costs, if applicable, arising
from any such breakdown, in such amounts as are reasonably satisfactory to
Beneficiary but not less than the lesser of $1,000,000 or 10% of the value
of the Improvements;
(ix) if any portion of the Premises are located in an area identified
as a special flood hazard area by the Federal Emergency Management Agency
or other applicable agency, flood insurance in an amount satisfactory to
Beneficiary, but in no event less than the maximum limit of coverage
available under the National Flood Insurance Act of 1968, as amended; and
(x) such other insurance in such amounts as Beneficiary may
reasonably request from time to time.
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be cancelled, non-renewed or materially
amended without 30 days' prior written notice to Beneficiary, and (ii) with
respect to all property insurance, provide for deductibles not to exceed
$50,000, contain a "Replacement Cost Endorsement" without any deduction made for
depreciation and with no co-insurance penalty (or attaching an agreed amount
endorsement satisfactory to Beneficiary), with loss payable to Beneficiary
(modified, if necessary, to provide that the entire amount of proceeds may be
retained by Beneficiary without the obligation to rebuild) as its interest may
appear, without contribution, under a "standard" or "New York" mortgagee clause
acceptable to Beneficiary and be written by insurance companies having an A.M.
Best Company, Inc. rating of A or higher and a financial size category of not
less than XII, or otherwise as approved by Beneficiary. Liability insurance
policies shall name Beneficiary (and Trustee, if
11
Trustee shall so request) as an additional insured and contain a waiver of
subrogation against Beneficiary (and Trustee, if Trustee shall so request); all
such policies shall indemnify and hold Beneficiary (and Trustee, if Trustee
shall so request) harmless from all liability claims occurring on, in or about
the Premises and the adjoining streets, sidewalks and passageways. The amounts
of each insurance policy and the form of each such policy shall at all times be
satisfactory to Beneficiary. Each policy shall expressly provide that any
proceeds which are payable to Beneficiary shall be paid by check payable to the
order of Beneficiary and requiring the endorsement of Beneficiary. If any
required insurance shall expire, be withdrawn, become void by breach of any
condition thereof by Grantor or by any lessee of any part of the Trust Property
or become void or unsafe by reason of the failure or impairment of the capital
of any insurer, or if for any other reason whatsoever such insurance shall
become unsatisfactory to Beneficiary, Grantor shall immediately obtain new or
additional insurance satisfactory to Beneficiary. Grantor shall not take out
any separate or additional insurance which is contributing in the event of loss
unless it is properly endorsed and otherwise satisfactory to Beneficiary in all
respects.
(b) Grantor shall deliver to Beneficiary an original of each
insurance policy required to be maintained, or a certificate of such insurance
acceptable to Beneficiary, together with a copy of the declaration page for each
such policy. Grantor shall (i) pay as they become due all premiums for such
insurance, (ii) not later than 10 days prior to the expiration of each policy to
be furnished pursuant to the provisions of this Section, deliver a renewed
policy or policies, or duplicate original or originals thereof, marked "premium
paid," or accompanied by such other evidence of payment satisfactory to
Beneficiary with standard non-contributory mortgagee clauses in favor of and
acceptable to Beneficiary.
(c) If Grantor is in default of its obligations to insure or deliver
any such prepaid policy or policies, then Beneficiary, at its option and without
notice, may effect such insurance from year to year, and pay the premium or
premiums therefor, and Grantor shall pay to Beneficiary on demand such premium
or premiums so paid by Beneficiary with interest from the time of payment at the
Default Rate and the same shall be deemed to be secured by this Deed of Trust
and shall be collectible in the same manner as the Indebtedness secured by this
Deed of Trust.
(d) Grantor shall increase the amount of property insurance required
to equal 100% replacement cost pursuant to the provisions of this Section at the
time of each renewal of each policy (but not later than 12 months from the date
of this Deed of Trust and each successive 12 month period to occur thereafter)
by using the X.X. Xxxxx Building Index to determine whether there shall have
been an increase in the replacement value since the
12
most recent adjustment and, if there shall have been such an increase, the
amount of insurance required shall be adjusted accordingly.
(e) Grantor promptly shall comply with and conform to (i) all
provisions of each such insurance policy, and (ii) all requirements of the
insurers applicable to Grantor or to any of the Trust Property or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Trust Property. Grantor shall not use or permit the use of
the Trust Property in any manner which would permit any insurer to cancel any
insurance policy or void coverage required to be maintained by this Deed of
Trust.
(f) If the Trust Property, or any part thereof, shall be destroyed or
damaged by fire or any other casualty, whether insured or uninsured, or in the
event any claim is made against Grantor for any personal injury, bodily injury
or property damage incurred on or about the Real Estate, Grantor shall give
immediate notice thereof to Beneficiary. If the Trust Property is damaged by
fire or other casualty and the cost to repair such damage is less than the
lesser of (i) 50% of the replacement cost of the Improvements at the affected
Real Estate site and (ii) $100,000, then provided that no Event of Default shall
have occurred and be continuing, Grantor shall have the right to adjust such
loss, and the insurance proceeds relating to such loss may be paid over to
Grantor; provided that Grantor shall, promptly after any such damage, repair all
such damage regardless of whether any insurance proceeds have been received or
whether such proceeds, if received, are sufficient to pay for the costs of
repair. If the Trust Property is damaged by fire or other casualty, and the
cost to repair such damage exceeds the above limit, or if an Event of Default
shall have occurred and be continuing, then Grantor authorizes and empowers
Beneficiary, at Beneficiary's option and in Beneficiary's sole discretion, as
attorney-in-fact for Grantor, to make proof of loss, to adjust and compromise
any claim under any insurance policy, to appear in and prosecute any action
arising from any policy, to collect and receive insurance proceeds and to deduct
therefrom Beneficiary's expenses incurred in the collection process. Each
insurance company concerned is hereby authorized and directed to make payment
for such loss directly to Beneficiary. Beneficiary shall have the right to
require Grantor to repair or restore the Trust Property, and Grantor hereby
designates Beneficiary as its attorney-in-fact for the purpose of making any
election required or permitted under any insurance policy relating to repair or
restoration. The insurance proceeds or any part thereof received by Beneficiary
may be applied by Beneficiary toward reimbursement of all costs and expenses of
Beneficiary in collecting such proceeds, and the balance, at Beneficiary's
option in its sole and absolute discretion, to the principal (to the
installments in inverse order of maturity, if payable in installments) and
interest due or to become due under the Notes, to fulfill any other Obligation
of Grantor, to the restoration or repair of the
13
property damaged, or released to Grantor. In the event Beneficiary elects to
release such proceeds to Grantor, Grantor shall be obligated to use such
proceeds to restore or repair the Trust Property. Application by Beneficiary of
any insurance proceeds toward the last maturing installments of principal and
interest due or to become due under the Notes shall not excuse Grantor from
making any regularly scheduled payments due thereunder, nor shall such
application extend or reduce the amount of such payments.
(g) In the event of foreclosure of this Deed of Trust or other
transfer of title to the Trust Property in extinguishment of the Indebtedness,
all right, title and interest of Grantor in and to any insurance policies
covering the Premises then in force shall pass to the purchaser or grantee and
Grantor hereby appoints Beneficiary its attorney-in-fact, in Grantor's name, to
assign and transfer all such policies and proceeds to such purchaser or grantee.
(h) Upon written notice to Grantor, Beneficiary after an Event of
Default shall be entitled to require Grantor to pay monthly in advance to
Beneficiary the equivalent of 1/12th of the estimated annual premiums due on
such insurance. Beneficiary may commingle such funds with its own funds and
Grantor shall not be entitled to interest thereon.
(i) Grantor may maintain insurance required under this Deed of Trust
by means of one or more blanket insurance policies maintained by Grantor;
PROVIDED, HOWEVER, that (A) each such blanket policy shall include an
endorsement providing that, in the event of a loss resulting from an insured
peril, insurance proceeds shall be allocated to the Trust Property in an amount
equal to the coverages required to be maintained by Grantor as provided above
and (B) the protection afforded under any such blanket policy shall be no less
than that which would have been afforded under a separate policy or policies
relating only to the Trust Property.
6. RESTRICTIONS ON LIENS AND ENCUMBRANCES. Except for the lien of
this Deed of Trust and the Permitted Exceptions, and as otherwise expressly
permitted by subsection 11.3 of the Credit Agreement, Grantor shall not further
mortgage, nor otherwise encumber the Trust Property nor create or suffer to
exist any lien, charge or encumbrance on the Trust Property, or any part
thereof, whether superior or subordinate to this Deed of Trust and whether
recourse or non-recourse.
7. TRANSFER RESTRICTIONS. Grantor shall not convey, sell, lease,
assign, transfer or otherwise dispose of the Trust Property except as expressly
permitted by subsection 11.6 of the Credit Agreement.
8. LIMITATION ON FUNDAMENTAL CHANGES. Grantor shall not enter into
any merger, consolidation or amalgamation, or
14
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of
all or substantially all of its property, business or assets or make any
material change in its present method of conducting business, except as
expressly permitted by subsection 11.5 of the Credit Agreement.
9. MAINTENANCE; NO ALTERATION; INSPECTION; UTILITIES. Grantor shall
maintain or cause to be maintained all the Improvements in good condition and
repair and shall not commit or suffer any waste of the Improvements. Grantor
shall repair, restore, replace or rebuild promptly any part of the Premises
which may be damaged or destroyed by any casualty whatsoever. The Improvements
shall not be demolished or materially altered, nor any material additions built,
without the prior written consent of Beneficiary, which consent shall not be
unreasonably withheld.
(b) Beneficiary and any persons authorized by Beneficiary shall have
the right to enter and inspect the Premises and the right to inspect all work
done, labor performed and materials furnished in and about the Improvements and
the right to inspect and make copies of all books, contracts and records of
Grantor relating to the Trust Property.
(c) Grantor shall pay or cause to be paid when due all utility
charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
10. CONDEMNATION/EMINENT DOMAIN. Immediately upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Trust Property, or any portion thereof, Grantor will notify Beneficiary of the
pendency of such proceedings. Grantor authorizes Beneficiary, at Beneficiary's
option and in Beneficiary's sole discretion, as attorney-in-fact for Grantor, to
commence, appear in and prosecute, in Beneficiary's or Grantor's name, any
action or proceeding relating to any condemnation of the Trust Property, or any
portion thereof, and to settle or compromise any claim in connection with such
condemnation. If Beneficiary elects not to participate in such condemnation
proceeding, then Grantor shall, at its expense, diligently prosecute any such
proceeding and shall consult with Beneficiary, its attorneys and experts and
cooperate with them in any defense of any such proceedings. All awards and
proceeds of condemnation shall be assigned to Beneficiary to be applied in the
same manner as insurance proceeds, as provided above, and Grantor agrees to
execute any such assignments of all such awards as Beneficiary may request.
15
11. RESTORATION. If Beneficiary elects to release funds to Grantor
for restoration of any of the Trust Property, then such restoration shall be
performed only in accordance with the following conditions:
(i) prior to the commencement of any restoration, the plans and
specifications for such restoration, and the budgeted costs, shall be
submitted to and approved by Beneficiary;
(ii) prior to making any advance of restoration funds, Beneficiary
shall be satisfied that the remaining restoration funds are sufficient to
complete the restoration and to pay all related expenses, including
interest on the Indebtedness (to the extent appropriate) and real estate
taxes on the Premises, during restoration;
(iii) at the time of any disbursement of the restoration funds, (A) no
Default (as defined below) shall then exist, (B) no mechanics' or
materialmen's liens shall have been filed and remain undischarged, except
those discharged by the disbursement of the requested restoration funds and
(C) a satisfactory bring-down or continuation of title insurance on the
Premises shall be delivered to Beneficiary;
(iv) disbursements shall be made from time to time in an amount not
exceeding the cost of the work completed since the last disbursement, upon
receipt of satisfactory evidence of the stage of completion and of
performance of the work in a good and workmanlike manner and in accordance
with the contracts, plans and specifications acceptable to Beneficiary;
(v) with respect to each advance of restoration funds, Beneficiary
may retain 10% of the amount of such advance as a holdback until the
restoration is fully completed;
(vi) the restoration funds shall bear no interest and may be
commingled with Beneficiary's other funds;
(vii) Beneficiary may impose such other conditions as are customarily
imposed by construction lenders; and
(viii) any restoration funds remaining shall be retained by Beneficiary
and may be applied by Beneficiary, in its sole discretion, to the
Indebtedness in the inverse order of maturity.
12. LEASES. (a) Grantor shall not (i) execute an assignment or
pledge of any Lease relating to all or any portion of the Trust Property other
than in favor of Beneficiary, or (ii) without the prior written consent of
Beneficiary, execute or permit to exist any Lease of any of the Trust Property
except as provided in subsection 11.5 of the Credit Agreement.
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(b) As to any Lease of all or any portion of the Premises consented
to by Beneficiary, Grantor shall:
(i) promptly perform all of the provisions of the Lease on the part
of the lessor thereunder to be performed;
(ii) promptly enforce all of the provisions of the Lease on the part
of the lessee thereunder to be performed;
(iii) appear in and defend any action or proceeding arising under or in
any manner connected with the Lease or the obligations of Grantor as lessor
or of the lessee thereunder;
(iv) exercise, within 5 days after a request by Beneficiary, any right
to request from the lessee a certificate with respect to the status
thereof;
(v) simultaneously deliver to Beneficiary copies of any notices of
default which Grantor may at any time forward to or receive from the
lessee;
(vi) promptly deliver to Beneficiary a fully executed counterpart of
the Lease; and
(vii) promptly deliver to Beneficiary, upon Beneficiary's request, an
assignment of the Grantor's interest under such Lease.
(c) Grantor shall deliver to Beneficiary, within 10 days after a
request by Beneficiary, a written statement, certified by Grantor as being true,
correct and complete, containing the names of all lessees and other occupants of
the Premises, the terms of all Leases of all or any portion of the Premises and
the spaces occupied and rentals payable thereunder, and a list of all Leases of
all or any portion of the Premises which are then in default, including the
nature and magnitude of the default; such statement shall be accompanied by
credit information with respect to the lessees and such other information as
Beneficiary may request.
(d) All Leases of all or any portion of the Premises entered into by
Grantor after the date hereof, if any, and all rights of any lessees thereunder
shall be subject and subordinate in all respects to the lien and provisions of
this Deed of Trust unless Beneficiary shall otherwise elect in writing.
(e) As to any Lease now in existence or subsequently consented to by
Beneficiary, Grantor shall not accept a surrender or terminate, cancel, rescind,
supplement, alter, revise, modify or amend such Lease or permit any such action
to be taken nor shall Grantor accept the payment of rent more than thirty (30)
days in advance of its due date.
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(f) If any act or omission of Grantor would give any lessee under any
Lease of all or any portion of the Premises the right, immediately or after
lapse of a period of time, to cancel or terminate such Lease, or to xxxxx or
offset against the payment of rent or to claim a partial or total eviction, such
lessee shall not exercise such right until it has given written notice of such
act or omission to Beneficiary and until a reasonable period for remedying such
act or omission shall have elapsed following the giving of such notice without a
remedy being effected.
(g) In the event of the enforcement by Beneficiary of any remedy
under this Deed of Trust, the lessee under each Lease of all or any portion of
the Premises shall, if requested by Beneficiary or any other person succeeding
to the interest of Beneficiary as a result of such enforcement, attorn to
Beneficiary or to such person and shall recognize Beneficiary or such successor
in interest as lessor under the Lease without change in the provisions thereof;
provided however, that Beneficiary or such successor in interest shall not be:
(i) bound by any payment of an installment of rent or additional rent which may
have been made more than 30 days before the due date of such installment; (ii)
bound by any amendment or modification to the Lease made without the consent of
Beneficiary or such successor in interest; (iii) liable for any previous act or
omission of Grantor (or its predecessors in interest); (iv) responsible for any
monies owing by Grantor to the credit of such lessee or subject to any credits,
offsets, claims, counterclaims, demands or defenses which the lessee may have
against Grantor (or its predecessors in interest); (v) bound by any covenant to
undertake or complete any construction of the Premises or any portion thereof;
or (vi) obligated to make any payment to such lessee other than any security
deposit actually delivered to Beneficiary or such successor in interest. Each
lessee or other occupant, upon request by Beneficiary or such successor in
interest, shall execute and deliver an instrument or instruments confirming such
attornment. In addition, Grantor agrees that each Lease entered into after the
date of this Deed of Trust shall include language to the effect of subsections
(d)-(g) of this Section; provided that the provisions of such subsections shall
be self-operative and any failure of any Lease to include such language shall
not impair the binding effect of such provisions on any lessee under such Lease.
13. FURTHER ASSURANCES/ESTOPPEL CERTIFICATES. To further assure
Beneficiary's and Trustee's rights under this Deed of Trust, Grantor agrees upon
demand of Beneficiary or Trustee to do any act or execute any additional
documents (including, but not limited to, security agreements on any personalty
included or to be included in the Trust Property and a separate assignment of
each Lease in recordable form) as may be required by Beneficiary or Trustee to
confirm the rights or benefits conferred on Beneficiary or Trustee by this Deed
of Trust. Grantor, within 5 business days after request, shall deliver, in form
and substance
18
satisfactory to Beneficiary, a written statement, duly acknowledged, setting
forth the amount of the Indebtedness, and whether any offsets, claims,
counterclaims or defenses exist against the Indebtedness and certifying as to
such other matters as Beneficiary shall reasonably request.
14. BENEFICIARY'S RIGHT TO PERFORM. If Grantor fails to perform any
of the covenants or agreements of Grantor, Beneficiary or Trustee, without
waiving or releasing Grantor from any obligation or default under this Deed of
Trust, may, at any time (but shall be under no obligation to) pay or perform the
same, and the amount or cost thereof, with interest at the Default Rate, shall
immediately be due from Grantor to Beneficiary or Trustee (as the case may be)
and the same shall be secured by this Deed of Trust and shall be an encumbrance
on the Trust Property prior to any right, title to, interest in or claim upon
the Trust Property attaching subsequent to the date of this Deed of Trust. No
payment or advance of money by Beneficiary or Trustee under this Section shall
be deemed or construed to cure Grantor's default or waive any right or remedy of
Beneficiary or Trustee.
15. GRANTOR'S EXISTENCE, ETC. Grantor shall do all things necessary
to preserve and keep in full force and effect its existence, franchises, rights
and privileges under the laws of the state in which it was formed and its right
to own property and transact business in the state of Texas. Grantor represents
and warrants that Grantor is a duly organized and validly existing corporation
in good standing, and this Deed of Trust has been executed by a duly authorized
officer thereof. This Deed of Trust constitutes the legal, valid and binding
obligation of Grantor, enforceable against Grantor 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.
16. FINANCIAL STATEMENTS; CERTIFICATES; OTHER INFORMATION. Grantor
shall deliver to Beneficiary all financial statements, certificates and other
information required to be delivered pursuant to the Credit Agreement.
17. NOTICE OF CERTAIN OCCURRENCES. Grantor shall give notice to the
Administrative Agent (as defined in the Credit Agreement) promptly upon the
occurrence of the events listed in subsection 10.7 of the Credit Agreement.
18. EVENTS OF DEFAULT. The occurrence of any Event of Default as
such term is defined in the Credit Agreement shall constitute an Event of
Default hereunder.
19. REMEDIES. (a) Upon the occurrence of any Event of Default, in
addition to any other rights and remedies Beneficiary may have pursuant to the
Loan Documents, or as provided by law, and without limitation, (x) if such event
is an
19
Event of Default specified in clause (i) or (ii) of subsection 12(i) of the
Credit Agreement, automatically the Indebtedness and all other amounts owing
under the Credit Agreement (including, without limitation, all amounts of
Letters of Credit Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder), the Notes, this Deed of Trust and the other Security Documents
immediately shall become due and payable, and (y) if such event is any other
Event of Default, with the consent of the Majority Lenders, the Administrative
Agent may, or upon the request of the Majority Lenders, the Administrative Agent
shall, by notice to Grantor declare the Indebtedness (together with accrued
interest thereon) and all other amounts payable under the Credit Agreement
(including, without limitation, all amounts of Letters of Credit Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder), the Notes, this Deed of Trust
and the other Security Documents to be immediately due and payable. Except as
expressly provided above in this Section or as required by applicable law,
notice of intention to accelerate, notice of acceleration, presentment, demand,
protest and all other notices of any kind are hereby expressly waived. In
addition, upon the occurrence of any Event of Default, Beneficiary may
immediately take such action, without notice or demand, as it deems advisable to
protect and enforce its rights against Grantor and in and to the Trust Property,
including, but not limited to, the following actions, each of which may be
pursued concurrently or otherwise, at such time and in such manner as
Beneficiary may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Beneficiary:
(i) Beneficiary may direct Trustee to sell or offer for sale the
Trust Property in such portions, order and parcels as Beneficiary may
determine, with or without having first taken possession of the same, to
the highest bidder for cash at public auction. Such sale shall be made at
the courthouse door of the County wherein the Real Estate (or any of that
portion thereof to be sold) is situated (whether the parts or parcels
thereof, if any, in different counties are contiguous or not, and without
the necessity of having any personal property hereby mortgaged present at
such sale) on the first Tuesday of any month between the hours of 10:00
a.m. and 4:00 p.m. after posting a written or printed notice or notices of
the place, time and terms of the sale of the Trust Property for twenty-one
(21) days prior to the date of the sale at the courthouse door of the
county in which the sale is to be made and at the courthouse door of any
other county in which a portion of the Trust Property may be situated and
filing a copy of such notice(s) in the office of the county clerk in each
of such counties, and by serving written notice of the proposed sale at
least twenty-one (21) days preceding the date of sale by certified mail on
Grantor and on each debtor obligated to pay the Indebtedness
20
according to the records of the Beneficiary. It is agreed that the posting
and transmittal of notices may be performed by the Trustee, Beneficiary, or
by any person acting for them. Applicable notices and the sale shall be
accomplished by following the procedures permitted or required by Tex.
Prop. Code Xxx. 51.002 (Xxxxxx 1984), as same may be amended from time to
time, relating to the sale of real estate and/or by Chapter 9 of the Texas
Uniform Commercial Code relating to the sale of personal property
collateral after default by a debtor (as said Section and Chapter may now
exist or may hereafter be amended or succeeded, the "Code"), or by any
other present or subsequent articles or enactments relating to the same.
Nothing contained in this subsection (i) shall be construed to limit in any
way Trustee's rights to sell the Trust Property by private sale if, and to
the extent, that such private sale is permitted under the laws of the State
of Texas or by public or private sale after entry of judgment by any court
of competent jurisdiction ordering the same. At any such sale (1) whether
made under power herein contained, the aforesaid 51.002, the Code, any
other legal requirement or by virtue of any judicial procedure or any other
legal right, remedy or recourse, it shall not be necessary for Trustee to
have physically present, or to have constructive possession of, the Trust
Property (Grantor hereby covenanting and agreeing to deliver to Trustee any
portion of the Trust Property not actually or constructively possessed by
Trustee immediately upon demand by Trustee), and the title to and right of
possession of any such property shall pass to the purchaser thereof as
completely as if the same had been actually present and delivered to
purchaser at such sale, (2) each instrument of conveyance executed by
Trustee shall contain a special warranty of title, subject to Permitted
Encumbrances, binding upon Grantor, (3) each and every recital contained in
any instrument of conveyance made by Trustee shall be PRIMA FACIE proof of
the truth and accuracy of the matters recited therein, including, without
limitation, nonpayment of the Indebtedness, advertisement and conduct of
such sale in the manner provided herein and otherwise by law and
appointment of any successor Trustee hereunder, (4) there shall be a PRIMA
FACIE presumption that any and all prerequisites to the validity thereof
shall have been performed, (5) the receipt of Trustee or of such other
party or officer making the sale shall be a sufficient discharge to the
purchaser or purchasers for his or their purchase money and no such
purchaser or purchasers, or his or their assigns or personal
representatives, shall thereafter be obligated to see to the application of
such purchase money or be in any way answerable for any loss,
misapplication or nonapplication thereof, (6) to the fullest extent
permitted by law, Grantor shall be completely and irrevocably divested of
all of its right, title, interest, claim and demand whatsoever, either at
law or in equity, in and to the property sold and such sale shall be a
perpetual bar, both
21
at law and in equity, against Grantor, and against any and all other
persons claiming or to claim the property sold or any part thereof, by,
through or under Grantor, and (7) to the extent and under such
circumstances as are permitted by law, Beneficiary may be a purchaser at
any such sale;
(ii) Beneficiary may, to the extent permitted by applicable law, (A)
institute and maintain an action of judicial foreclosure against all or any
part of the Trust Property, (B) institute and maintain an action on the
Notes or with respect to the Reimbursement Obligation under the Credit
Agreement, or (C) take such other action at law or in equity for the
enforcement of this Deed of Trust or any of the Loan Documents as the law
may allow. Beneficiary may proceed in any such action to final judgment
and execution thereon for all sums due hereunder, together with interest
thereon at the Default Rate and all costs of suit, including, without
limitation, reasonable attorneys' fees and disbursements. Interest at the
Default Rate shall be due on any judgment obtained by Beneficiary from the
date of judgment until actual payment is made of the full amount of the
judgment.
(iii) Beneficiary may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the Trust
Property or any other collateral as security for the Indebtedness and
Obligations enter into and upon the Trust Property and each and every part
thereof and exclude Grantor and its agents and employees therefrom without
liability for trespass, damage or otherwise (Grantor hereby agreeing to
surrender possession of the Trust Property to Beneficiary upon demand at
any such time) and use, operate, manage, maintain and control the Trust
Property and every part thereof. Following such entry and taking of
possession, Beneficiary shall be entitled, without limitation, (x) to lease
all or any part or parts of the Trust Property for such periods of time and
upon such conditions as Beneficiary may, in its discretion, deem proper,
(y) to enforce, cancel or modify any Lease to the extent permitted by
applicable law and the terms of such Lease and (z) generally to execute, do
and perform any other act, deed, matter or thing concerning the Trust
Property as Beneficiary shall deem appropriate as fully as Grantor might
do.
(b) Beneficiary, in any action to foreclose this Deed of Trust in a
judicial procedure or in connection with the exercise of any non-judicial power
of sale by Trustee, shall be entitled to the appointment of a receiver. In case
of a trustee's sale or foreclosure sale, the Real Estate may be sold, at
Beneficiary's election, in one parcel or in more than one parcel and Beneficiary
is specifically empowered (without being required to do so, and in its sole and
absolute discretion) to
22
cause successive sales of portions of the Trust Property to be held.
(c) In the event of any breach of any of the covenants, agreements,
terms or conditions contained in this Deed of Trust, and notwithstanding to the
contrary any exculpatory or non-recourse language which may be contained herein,
Beneficiary or Trustee shall be entitled to enjoin such breach and obtain
specific performance of any covenant, agreement, term or condition and
Beneficiary and Trustee shall have the right to invoke any equitable right or
remedy as though other remedies were not provided for in this Deed of Trust.
(d) Following any sale of the Trust Property, or any part hereof,
under the provisions of this instrument, all persons and parties in possession
of the property sold shall be divested of any and all interest in and claim to
the Trust Property, and shall be obligated to immediately vacate the premises,
and prior to such vacation shall be tenants at sufferance of the purchaser of
the property sold and shall be subject to eviction in an action of forcible
detainer; provided, the provisions of this subparagraph shall be subject to any
agreements made in writing by Beneficiary with reference to any existing and/or
future leases; provided, further, the purchaser at any foreclosure sale shall
have the option but not the obligation to affirm any then existing leases or
tenancies or otherwise succeed to the rights of Grantor thereunder.
20. RIGHT OF BENEFICIARY TO CREDIT SALE. Upon the occurrence of any
sale made under this Deed of Trust, whether made under the power of sale or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, Beneficiary may bid for and acquire the Trust Property or any part
thereof. In lieu of paying cash therefor, Beneficiary may make settlement for
the purchase price by crediting upon the Indebtedness or other sums secured by
this Deed of Trust the net sales price after deducting therefrom the expenses of
sale and the cost of the action and any other sums which Beneficiary is
authorized to deduct under this Deed of Trust. In such event, this Deed of
Trust, the Notes and documents evidencing expenditures secured hereby may be
presented to the person or persons conducting the sale in order that the amount
so used or applied may be credited upon the Indebtedness as having been paid.
21. APPOINTMENT OF RECEIVER. If an Event of Default shall have
occurred and be continuing, Beneficiary as a matter of right and without notice
to Grantor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Trust Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Grantor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Trust Property, and
Grantor hereby irrevocably consents to such appointment and waives notice of any
application therefor (except
23
as may be required by law). Any such receiver or receivers shall have all the
usual powers and duties of receivers in like or similar cases and all the powers
and duties of Beneficiary in case of entry as provided in this Deed of Trust,
including, without limitation and to the extent permitted by law, the right to
enter into leases of all or any part of the Trust Property, and shall continue
as such and exercise all such powers until the date of confirmation of sale of
the Trust Property unless such receivership is sooner terminated.
22. EXTENSION, RELEASE, ETC. (a) Without affecting the encumbrance
or charge of this Deed of Trust upon any portion of the Trust Property not then
or theretofore released as security for the full amount of the Indebtedness,
Beneficiary may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Beneficiary's option any parcel, portion or all of the Trust
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Deed of Trust shall
secure less than all of the principal amount of the Indebtedness, it is
expressly agreed that any repayments of the principal amount of the Indebtedness
shall not reduce the amount of the encumbrance of this Deed of Trust until the
encumbrance amount shall equal the principal amount of the Indebtedness
outstanding.
(b) No recovery of any judgment by Beneficiary and no levy of an
execution under any judgment upon the Trust Property or upon any other property
of Grantor shall affect the encumbrance of this Deed of Trust or any liens,
rights, powers or remedies of Beneficiary or Trustee hereunder, and such liens,
rights, powers and remedies shall continue unimpaired.
(c) If Beneficiary shall have the right to foreclose this Deed of
Trust or to direct the Trustee to exercise its power of sale, Grantor authorizes
Beneficiary at its option to foreclose the lien of this Deed of Trust (or direct
the Trustee to sell the Trust Property, as the case may be) subject to the
rights of any tenants of the Trust Property. The failure to make any such
tenants parties defendant to any such foreclosure proceeding and to foreclose
their rights, or to provide notice to such tenants as required in any statutory
procedure governing a sale of the Trust Property by Trustee, or to terminate
such tenant's rights in such sale will not be asserted by Grantor as a defense
to any proceeding instituted by Beneficiary to collect the Indebtedness or to
foreclose this Deed of Trust.
(d) Unless expressly provided otherwise, in the event that
Beneficiary's interest in this Deed of Trust and title to the Trust Property or
any estate therein shall become vested in
24
the same person or entity, this Deed of Trust shall not merge in such title but
shall continue as a valid charge on the Trust Property for the amount secured
hereby.
23. SECURITY AGREEMENT UNDER UNIFORM COMMERCIAL CODE. (a) It is the
intention of the parties hereto that this Deed of Trust shall constitute a
Security Agreement within the meaning of the Code. If an Event of Default shall
occur under this Deed of Trust, then in addition to having any other right or
remedy available at law or in equity, Beneficiary shall have the option of
either (i) proceeding under the Code and exercising such rights and remedies as
may be provided to a secured party by the Code with respect to all or any
portion of the Trust Property which is personal property (including, without
limitation, taking possession of and selling such property) or (ii) treating
such property as real property and proceeding with respect to both the real and
personal property constituting the Trust Property in accordance with
Beneficiary's rights, powers and remedies with respect to the real property (in
which event the default provisions of the Code shall not apply). If Beneficiary
shall elect to proceed under the Code, then five days' notice of sale of the
personal property shall be deemed reasonable notice and the reasonable expenses
of retaking, holding, preparing for sale, selling and the like incurred by
Beneficiary shall include, but not be limited to, attorneys' fees and legal
expenses. At Beneficiary's request, Grantor shall assemble the personal
property and make it available to Beneficiary at a place designated by
Beneficiary which is reasonably convenient to both parties.
(b) Grantor and Beneficiary agree, to the extent permitted by law,
that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Deed of
Trust upon recording or registration in the real estate records of the proper
office shall constitute a financing statement filed as a "fixture filing" within
the meaning of Sections 9-313 and 9-402 of the Code; (iii) Grantor is the record
owner of the Real Estate; and (iv) the addresses of Grantor and Beneficiary are
as set forth on the first page of this Deed of Trust.
(c) Grantor, upon request by Beneficiary from time to time, shall
execute, acknowledge and deliver to Beneficiary one or more separate security
agreements, in form satisfactory to Beneficiary, covering all or any part of the
Trust Property and will further execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, any financing statement, affidavit,
continuation statement or certificate or other document as Beneficiary may
request in order to perfect, preserve, maintain, continue or extend the security
interest under and the priority of this Deed of Trust and such security
instrument. Grantor further agrees to pay to Beneficiary on demand all costs
and expenses incurred by Beneficiary in connection with the preparation,
execution, recording, filing and
25
re-filing of any such document and all reasonable costs and expenses of any
record searches for financing statements Beneficiary shall reasonably require.
Grantor shall from time to time, on request of Beneficiary, deliver to
Beneficiary an inventory in reasonable detail of any of the Trust Property which
constitutes personal property. If Grantor shall fail to furnish any financing
or continuation statement within 10 days after request by Beneficiary, then
pursuant to the provisions of the Code, Grantor hereby authorizes Beneficiary,
without the signature of Grantor, and hereby irrevocably appoints and
constitutes Beneficiary as its true and lawful attorney-in-fact, which
appointment is coupled with an interest, in its name, place and stead to execute
and file any such financing and continuation statements. The filing of any
financing or continuation statements in the records relating to personal
property or chattels shall not be construed as in any way impairing the right of
Beneficiary to proceed against any personal property encumbered by this Deed of
Trust as real property, as set forth above.
24. ASSIGNMENT OF RENTS. (a) Grantor hereby assigns to Beneficiary,
the Rents as further security for the payment of the Indebtedness and
performance of the Obligations, and Grantor grants to Beneficiary the right to
enter the Trust Property for the purpose of collecting the same and to let the
Trust Property or any part thereof, and to apply the Rents on account of the
Indebtedness. The foregoing assignment and grant is present and absolute and
shall continue in effect until the Indebtedness is paid in full, but Beneficiary
and Trustee hereby waive the right to enter the Trust Property for the purpose
of collecting the Rents and Grantor shall be entitled to collect, receive, use
and retain the Rents until the occurrence of an Event of Default under this Deed
of Trust; such right of Grantor to collect, receive, use and retain the Rents
may be revoked by Beneficiary upon the occurrence of any Event of Default under
this Deed of Trust by giving not less than five days' written notice of such
revocation to Grantor; in the event such notice is given, Grantor shall pay over
to Beneficiary, or to any receiver appointed to collect the Rents, any lease
security deposits, and shall pay monthly in advance to Beneficiary, or to any
such receiver, the fair and reasonable rental value as determined by Beneficiary
for the use and occupancy of the Trust Property or of such part thereof as may
be in the possession of Grantor or any affiliate of Grantor, and upon default in
any such payment Grantor and any such affiliate will vacate and surrender the
possession of the Trust Property to Beneficiary or to such receiver, and in
default thereof may be evicted by summary proceedings or otherwise. Grantor
shall not accept prepayments of installments of Rent to become due for a period
of more than one month in advance (except for security deposits and estimated
payments of percentage rent, if any).
(b) Beneficiary's acceptance of this assignment shall not, prior to
entry upon and taking possession of the Trust
26
Property by Beneficiary, be deemed to constitute Beneficiary a "mortgagee in
possession", nor obligate Beneficiary to appear in or defend any proceeding
relating to any of the Leases or to the Trust Property, take any action
hereunder, expend any money, incur any expenses, or perform any obligation or
liability under the Leases, or assume any obligation for any deposits delivered
to Grantor by any tenant and not delivered to Beneficiary, or render Beneficiary
liable for any injury or damage to person or property in or about the Trust
Property. Neither the collection of Rents due under the Leases herein
described, nor possession of the Trust Property by Beneficiary under any of the
circumstances set forth herein shall render Beneficiary liable with respect to
any obligations of Grantor to any tenant or subtenant under said Leases, such
liability to arise only with respect to a party purchasing the Trust Property at
a foreclosure sale or receiving a deed covering the Trust Property in lieu of
foreclosure and then to arise only with respect to obligations accruing
subsequent to such foreclosure sale or deed in lieu thereof.
(c) By Beneficiary's acceptance of this Deed of Trust, it is
understood and agreed that a full and complete release of this Deed of Trust
shall operate as a full and complete reassignment to Grantor of the
Beneficiary's rights and interests under this Section.
(d) All provisions hereof shall inure to the benefit of and all
actions authorized hereunder shall be exercisable by the Trustee or the
Substitute Trustee at Beneficiary's request.
25. TRUST FUNDS. All lease security deposits of the Real Estate
shall be treated as trust funds not to be commingled with any other funds of
Grantor. Within 10 days after request by Beneficiary, Grantor shall furnish
Beneficiary satisfactory evidence of compliance with this subsection, together
with a statement of all lease security deposits by lessees and copies of all
Leases not previously delivered to Beneficiary, which statement shall be
certified by Grantor.
26. ADDITIONAL RIGHTS. The holder of any subordinate lien or
subordinate deed of trust on the Trust Property shall have no right to terminate
any Lease whether or not such Lease is subordinate to this Deed of Trust nor
shall any holder of any subordinate lien or subordinate deed of trust join any
tenant under any Lease in any trustee's sale or action to foreclose the lien or
modify, interfere with, disturb or terminate the rights of any tenant under any
Lease. By recordation of this Deed of Trust all subordinate lienholders and the
trustees and beneficiaries under subordinate deeds of trust are subject to and
notified of this provision, and any action taken by any such lienholder or
trustee or beneficiary contrary to this provision shall be null and void. Upon
the occurrence of any Event of Default, Beneficiary may, in its sole discretion
and without regard to the adequacy of its security under this Deed of Trust,
apply all or any part of any amounts on deposit with Beneficiary
27
under this Deed of Trust against all or any part of the Indebtedness. Any such
application shall not be construed to cure or waive any Default or Event of
Default or invalidate any act taken by Beneficiary on account of such Default or
Event of Default.
27. CHANGES IN METHOD OF TAXATION. In the event of the passage after
the date hereof of any law of any Governmental Authority deducting from the
value of the Premises for the purposes of taxation any lien or deed of trust
thereon, or changing in any way the laws for the taxation of mortgages or deeds
of trust or debts secured thereby for federal, state or local purposes, or the
manner of collection of any such taxes, and imposing a tax, either directly or
indirectly, on mortgages or deeds of trust or debts secured thereby, the holder
of this Deed of Trust shall have the right to declare the Indebtedness due on a
date to be specified by not less than 30 days' written notice to be given to
Grantor unless within such 30-day period Grantor shall assume as an Obligation
hereunder the payment of any tax so imposed until full payment of the
Indebtedness and such assumption shall be permitted by law.
28. NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed to
Grantor at the address given on the first page of this Deed of Trust, to
Beneficiary at the address given on the first page of this Deed of Trust and to
Trustee at the address given on the first page of this Deed of Trust. Any party
may change its address by notice to the other party. If any party other than
Grantor shall be entitled to receive copies of notices, demands or approvals,
failure of Beneficiary or Trustee to send such copies shall not impair the
effectiveness of any notice sent to Grantor.
29. NO ORAL MODIFICATION. This Deed of Trust may not be changed or
terminated orally. Any agreement made by Grantor and Beneficiary after the date
of this Deed of Trust relating to this Deed of Trust shall be superior to the
rights of the holder of any intervening or subordinate deed of trust, lien or
encumbrance. Trustee's execution of any written agreement between Grantor and
Beneficiary shall not be required for the effectiveness thereof as between
Grantor and Beneficiary.
30. PARTIAL INVALIDITY. In the event any one or more of the
provisions contained in this Deed of Trust shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
28
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Deed of
Trust or in any provisions of the Indebtedness or Loan Documents, the
obligations of Grantor and of any other obligor under the Indebtedness or Loan
Documents shall be subject to the limitation that Beneficiary shall not charge,
take or receive, nor shall Grantor or any other obligor be obligated to pay to
Beneficiary, any amounts constituting interest in excess of the maximum rate
permitted by law to be charged by Beneficiary.
31. GRANTOR'S WAIVER OF RIGHTS. To the fullest extent permitted by
law, Grantor waives the benefit of all laws now existing or that may
subsequently be enacted providing for (i) any appraisement before sale of any
portion of the Trust Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Trust Property from attachment, levy or sale under execution or
exemption from civil process. To the full extent Grantor may do so, Grantor
agrees that Grantor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, extension or redemption, or requiring
foreclosure of this Deed of Trust before exercising any other remedy granted
hereunder and Grantor, for Grantor and its successors and assigns, and for any
and all persons ever claiming any interest in the Trust Property, to the extent
permitted by law, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the secured indebtedness and marshalling in the event
of exercise by Trustee or Beneficiary of the power of sale or other rights
hereby created.
32. REMEDIES NOT EXCLUSIVE. Beneficiary and Trustee shall be
entitled to enforce payment of the Indebtedness and performance of the
Obligations and to exercise all rights and powers under this Deed of Trust or
under any of the other Loan Documents or other agreement or any laws now or
hereafter in force, notwithstanding some or all of the Indebtedness and
Obligations may now or hereafter be otherwise secured, whether by deed of trust,
mortgage, security agreement, pledge, lien, assignment or otherwise. Neither
the acceptance of this Deed of Trust nor its enforcement, shall prejudice or in
any manner affect Beneficiary's or Trustee's right to realize upon or enforce
any other security now or hereafter held by Beneficiary or Trustee, it being
agreed that Beneficiary and Trustee shall be entitled to enforce this Deed of
Trust and any other security now or hereafter held by Beneficiary or Trustee in
such order and manner as Beneficiary may determine in its absolute discretion.
No remedy herein conferred upon or reserved to Trustee or Beneficiary is
intended to be exclusive of any other remedy herein or by law provided or
permitted, but each shall be
29
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute. Every power or remedy
given by any of the Loan Documents to Beneficiary or Trustee or to which either
may otherwise be entitled, may be exercised, concurrently or independently, from
time to time and as often as may be deemed expedient by Beneficiary or Trustee,
as the case may be. In no event shall Beneficiary or Trustee, in the exercise
of the remedies provided in this Deed of Trust (including, without limitation,
in connection with the assignment of Rents, or the appointment of a receiver and
the entry of such receiver on to all or any part of the Trust Property), be
deemed a "mortgagee in possession," and neither Beneficiary nor Trustee shall in
any way be made liable for any act, either of commission or omission, in
connection with the exercise of such remedies.
33. MULTIPLE SECURITY. If (a) the Premises shall consist of one or
more parcels, whether or not contiguous but located in the same county, or (b)
in addition to this Deed of Trust, Beneficiary shall now or hereafter hold or be
the beneficiary of one or more additional mortgages, liens, deeds of trust or
other security (directly or indirectly) for the Indebtedness upon other property
in such county in the state of Texas (whether or not such property is owned by
Grantor or by others) or (c) both the circumstances described in clauses (a) and
(b) shall be true, then to the fullest extent permitted by law, Beneficiary may,
at its election, commence or consolidate in a single trustee's sale or
foreclosure action all trustee's sale or foreclosure proceedings against all
such collateral securing the Indebtedness (including the Trust Property), which
action may be brought or consolidated in the courts of, or sale conducted in,
such county in which such collateral is located. Grantor acknowledges that the
right to maintain a consolidated trustee's sale or foreclosure action is a
specific inducement to Beneficiary to extend the Indebtedness, and Grantor
expressly and irrevocably waives any objections to the commencement or
consolidation of the foreclosure proceedings in a single action and any
objections to the laying of venue or based on the grounds of FORUM NON
CONVENIENS which it may now or hereafter have. Grantor further agrees that if
Trustee or Beneficiary shall be prosecuting one or more foreclosure or other
proceedings against a portion of the Trust Property or against any collateral
other than the Trust Property, which collateral directly or indirectly secures
the Indebtedness, or if Beneficiary shall have obtained a judgment of
foreclosure and sale or similar judgment against such collateral (or, in the
case of a trustee's sale, shall have met the statutory requirements therefor
with respect to such collateral), then, whether or not such proceedings are
being maintained or judgments were obtained in or outside the state of Texas,
Beneficiary may commence or continue any trustee's sale or foreclosure
proceedings and exercise its other remedies granted in this Deed of Trust
against all or any part of the Trust Property and Grantor waives any objections
to the commencement or continuation of a foreclosure of this Deed of Trust or
exercise
30
of any other remedies hereunder based on such other proceedings or judgments,
and waives any right to seek to dismiss, stay, remove, transfer or consolidate
either any action under this Deed of Trust or such other proceedings on such
basis. The commencement or continuation of proceedings to sell the Trust
Property in a trustee's sale, to foreclose this Deed of Trust or the exercise of
any other rights hereunder or the recovery of any judgment by Beneficiary or the
occurrence of any sale by the Trustee in any such proceedings shall not
prejudice, limit or preclude Beneficiary's right to commence or continue one or
more trustee's sales, foreclosure or other proceedings or obtain a judgment
against (or, in the case of a trustee's sale, to meet the statutory requirements
for, any such sale of) any other collateral (either in or outside the state of
Texas) which directly or indirectly secures the Indebtedness, and Grantor
expressly waives any objections to the commencement of, continuation of, or
entry of a judgment in such other sales or proceedings or exercise of any
remedies in such sales or proceedings based upon any action or judgment
connected to this Deed of Trust, and Grantor also waives any right to seek to
dismiss, stay, remove, transfer or consolidate either such other sales or
proceedings or any sale or action under this Deed of Trust on such basis. It is
expressly understood and agreed that to the fullest extent permitted by law,
Beneficiary may, at its election, cause the sale of all collateral which is the
subject of a single trustee's sale or foreclosure action at either a single sale
or at multiple sales conducted simultaneously and take such other measures as
are appropriate in order to effect the agreement of the parties to dispose of
and administer all collateral securing the Indebtedness (directly or indirectly)
in the most economical and least time-consuming manner.
34. SUCCESSORS AND ASSIGNS. All covenants of Grantor contained in
this Deed of Trust are imposed solely and exclusively for the benefit of
Beneficiary and Trustee and their respective successors and assigns, and no
other person or entity shall have standing to require compliance with such
covenants or be deemed, under any circumstances, to be a beneficiary of such
covenants, any or all of which may be freely waived in whole or in part by
Beneficiary or Trustee at any time if in the sole discretion of either of them
such waiver is deemed advisable. All such covenants of Grantor shall run with
the land and bind Grantor, the successors and assigns of Grantor (and each of
them) and all subsequent owners, encumbrancers and tenants of the Trust
Property, and shall inure to the benefit of Beneficiary, Trustee and their
respective successors and assigns. Without limiting the generality of the
foregoing, any successor to Trustee appointed by Beneficiary shall succeed to
all rights of Trustee as if such successor had been originally named as Trustee
hereunder. The word "Grantor" shall be construed as if it read "Grantors"
whenever the sense of this Deed of Trust so requires and if there shall be more
than one Grantor, the obligations of the Grantors shall be joint and several.
31
35. NO WAIVERS, ETC. Any failure by Beneficiary to insist upon the
strict performance by Grantor of any of the terms and provisions of this Deed of
Trust shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Beneficiary or Trustee, notwithstanding any such failure, shall have
the right thereafter to insist upon the strict performance by Grantor of any and
all of the terms and provisions of this Deed of Trust to be performed by
Grantor. Beneficiary may release, regardless of consideration and without the
necessity for any notice to or consent by the beneficiary of any subordinate
deed of trust or the holder of any subordinate lien on the Trust Property, any
part of the security held for the obligations secured by this Deed of Trust
without, as to the remainder of the security, in any way impairing or affecting
this Deed of Trust or the priority of this Deed of Trust over any subordinate
lien or deed of trust.
36. GOVERNING LAW, ETC. THIS DEED OF TRUST SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT THAT GRANTOR
EXPRESSLY ACKNOWLEDGES THAT BY THEIR RESPECTIVE TERMS EACH OF THE CREDIT
AGREEMENT AND THE NOTES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW,
AND FOR PURPOSES OF CONSISTENCY, GRANTOR AGREES THAT IN ANY IN PERSONAM
PROCEEDING RELATED TO THIS DEED OF TRUST THE RIGHTS OF THE PARTIES TO THIS DEED
OF TRUST SHALL ALSO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK GOVERNING CONTRACTS MADE AND TO BE PERFORMED IN THAT
STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW.
37. WAIVER OF TRIAL BY JURY. GRANTOR, TRUSTEE AND BENEFICIARY EACH
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION,
CLAIM, SUIT OR PROCEEDING RELATING TO THIS DEED OF TRUST AND FOR ANY
COUNTERCLAIM THEREIN. GRANTOR HEREBY WAIVES ALL RIGHTS TO INTERPOSE ANY
COUNTERCLAIM IN ANY SUIT BROUGHT BY BENEFICIARY OR TRUSTEE HEREUNDER AND ALL
RIGHTS TO HAVE ANY SUCH SUIT CONSOLIDATED WITH ANY SEPARATE SUIT, ACTION OR
PROCEEDING.
38. CERTAIN DEFINITIONS. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Deed of Trust shall be used interchangeably in singular or plural form and
the word "Grantor" shall mean "each Grantor or any subsequent owner or owners of
the Trust Property or any part thereof or interest therein," the word
"Beneficiary" shall mean "Beneficiary or any subsequent holder of the Notes,"
the word "Trustee" shall mean "Trustee and any successor trustee hereunder," the
word "Notes" shall mean "the Notes or any other evidence of indebtedness secured
by this Deed of Trust," the word "person" shall include any individual,
corporation, partnership, trust, unincorporated association, government,
governmental authority, or other entity, and the words "Trust Property" shall
include any portion of the Trust Property or interest therein. Whenever the
context may require, any pronouns used herein shall include the corresponding
32
masculine, feminine or neuter forms, and the singular form of nouns and pronouns
shall include the plural and vice versa. The captions in this Deed of Trust are
for convenience or reference only and in no way limit or amplify the provisions
hereof. All terms used herein which are defined in the Texas Uniform Commercial
Code shall be used in accordance with the definition therefor in said Code.
39. ENFORCEABILITY; USURY. (a) In no event shall any provision of
this Deed of Trust, the Notes, or any other instrument evidencing or securing
the Indebtedness ever obligate Grantor to pay or allow Beneficiary to collect
interest on the Notes, the Reimbursement Obligation or any other indebtedness
secured hereby at a rate greater than the maximum non-usurious rate permitted by
applicable law (herein referred to as the "Highest Lawful Rate"), or obligate
Grantor to pay any taxes, assessments, charges, insurance premiums or other
amounts to the extent that such payments, when added to the interest payable on
the Notes or the Reimbursement Obligation, would be held to constitute the
payment by Grantor of interest at a rate greater than the Highest Lawful Rate;
and this provision shall control over any provision to the contrary. To the
extent the Highest Lawful Rate is determined by reference to the laws of the
State of Texas, same shall be determined by reference to the indicated (weekly)
rate ceiling (as defined and described in Texas Revised Civil Statutes Article
5069-1.04, as amended) at the applicable time in effect.
(b) Without limiting the generality of the foregoing, in the event
the maturity of all or any part of the principal amount of the Indebtedness
shall be accelerated for any reason, then such principal amount so accelerated
shall be credited with any interest theretofore paid thereon in advance and
remaining unearned at the time of such acceleration. If, pursuant to the terms
of this Deed of Trust, the Credit Agreement or the Notes, any funds are applied
to the payment of any part of the principal amount of the Indebtedness prior to
the maturity thereof, then (a) any interest which would otherwise thereafter
accrue on the principal amount so paid by such application shall be canceled,
and (b) the Indebtedness remaining unpaid after such application shall be
credited with the amount of all interest, if any, theretofore collected on the
principal amount so paid by such application and remaining unearned at the date
of said application; and if the funds so applied shall be sufficient to pay in
full all the Indebtedness, then Beneficiary shall refund to Grantor all interest
theretofore paid thereon in advance and remaining unearned at the time of such
acceleration. Regardless of any other provision in this Deed of Trust, or in
any of the written evidences of the Indebtedness, Grantor shall never be
required to pay any unearned interest on the Indebtedness or any portion
thereof, and shall never be required to pay interest thereon at a rate in excess
of the Highest Lawful Rate construed by courts having competent jurisdiction
thereof.
33
40. HOMESTEAD. Grantor represents and covenants that the Trust
Property forms no part any property owned, used or claimed by Grantor as a
business or residential homestead, or as exempt from forced sale under the laws
of the State of Texas, and disclaims and renounces all and every such claim
thereto.
41. SUBSTITUTE TRUSTEE. In case of the resignation of the Trustee,
or the inability (through death or otherwise), refusal or failure of the Trustee
to act, or at the option of Beneficiary or the Majority Lenders for any other
reason (which reason need not be stated), a substitute trustee may be named,
constituted and appointed by Beneficiary at Beneficiary's own option or at the
request of the Majority Lenders (the "Substitute Trustee"), without other
formality than an appointment and designation in writing, which appointment and
designation shall be full evidence of the right and authority to make the same
and of all facts therein recited, and this conveyance shall vest in the
Substitute Trustee the title, powers and duties herein conferred on the Trustee
originally named herein, and the conveyance of the Substitute Trustee to the
purchaser(s) at any sale of the Trust Property of any part thereof shall be
equally valid and effective. The right to appoint a Substitute Trustee shall
exist as often and whenever from any of said causes, the Trustee, original or
substitute, resigns or cannot, will not or does not act, or Beneficiary or the
Majority Lenders desire to appoint a new Trustee. No bond shall ever be
required of the Trustee, original or substitute. The recitals in any conveyance
made by the Trustee, original or substitute, shall be accepted and construed in
court and elsewhere as prima facie evidence and proof of the facts recited, and
no other proof shall be required as to the request by Beneficiary or the
Majority Lenders to the Trustee to enforce this Deed of Trust, or as to the
notice of or holding of the sale, or as to any particulars thereof, or as to the
resignation of the Trustee, original or substitute, or as to the inability,
refusal or failure of the Trustee, original or substitute, to act, or as to the
election of Beneficiary or the Majority Lenders to appoint a new Trustee, or as
to appointment of a Substitute Trustee, and all prerequisites of said sale shall
be presumed to have been performed; and each sale made under the powers herein
granted shall be a perpetual bar against Grantor and the heirs, personal
representatives, successors and assigns of Grantor. Trustee, original or
substitute, is hereby authorized and empowered to appoint any one or more
persons as attorney-in-fact to act as Trustee under him and in his name, place
and xxxxx in order to take any actions that Trustee is authorized and empowered
to do hereunder, such appointment to be evidenced by an instrument signed and
acknowledged by said Trustee, original or substitute; and all acts done by said
attorney-in-fact shall be valid, lawful and binding as if done by said Trustee,
original or substitute, in person.
42. INDEMNIFICATION OF TRUSTEE. EXCEPT FOR GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT, TRUSTEE SHALL NOT BE LIABLE FOR ANY ACT OR OMISSION OR ERROR
OF JUDGMENT. TRUSTEE MAY RELY ON
34
ANY DOCUMENT BELIEVED BY HIM IN GOOD FAITH TO BE GENUINE. ALL MONEY RECEIVED BY
TRUSTEE SHALL, UNTIL USED OR APPLIED AS HEREIN PROVIDED, BE HELD IN TRUST, AND
TRUSTEE SHALL NOT BE LIABLE FOR INTEREST THEREON. GRANTOR SHALL INDEMNIFY
TRUSTEE AGAINST ALL LIABILITY AND EXPENSES THAT HE MAY INCUR IN THE PERFORMANCE
OF HIS DUTIES HEREUNDER EXCEPT FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
43. BUSINESS OR COMMERCIAL PURPOSE. Grantor warrants that the
extension of credit evidenced by the Notes and the Letters of Credit Obligations
under the Credit Agreement secured hereby are solely for business or commercial
purposes, other than agricultural purposes. Grantor further warrants that the
credit transaction evidenced by the Notes and the Letters of Credit Obligations
under the Credit Agreement are specifically exempted under Section 226.3(a) of
Regulation Z issued by the Board of Governors of the Federal Reserve System and
Title 12 (Truth in Lending Act) and Section 1603 of Title 15 (General
Provisions) of the Consumer Credit Protection Act and that no disclosures are
required to be given under such regulations and federal laws in connection with
the above transaction.
44. FINAL AGREEMENT. In consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Grantor hereby confirms and agrees that this Deed of Trust
(including Schedule A), the Notes, any guarantees of the Notes executed by any
guarantors and all other Loan Documents and loan papers together constitute a
written "loan agreement" as defined in Section 26.02(a) of the Texas Business
and Commerce Code.
45. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
35
This Deed of Trust has been duly executed by Grantor on the date first
above written.
ANACOMP, INC.,
an Indiana corporation
By:_____________________________
Name:
Title:
State of New York )
)SS.
County of New York )
On the 27th day of February, 1997, before me personally came
_________________ to me known, who, being by me duly sworn, did depose and say
s/he resides at _______________________________________; that s/he is
________________ of Anacomp, Inc., the corporation described in and which
executed the foregoing instrument; that by order of the Board of Directors of
said corporation s/he signed his/her name.
_________________________
Notary Public
State of New York )
)SS.
County of New York )
On the 27th day of February, 1997, before me personally came
_________________ to me known, who, being by me duly sworn, did depose and say
s/he resides at _______________________________________; that s/he is
________________ of Anacomp, Inc., the corporation described in and which
executed the foregoing instrument; that by order of the Board of Directors of
said corporation s/he signed his/her name.
_________________________
Notary Public
SCHEDULE A
Description of the Premises
SCHEDULE A
DESCRIPTION
First Tract:
Being 8.444 acres out of Xxx Xxxxxxxx Survey, Abstract Number 271, and the X.X.
Xxxxx Survey Abstract No. 164, in Young County, Texas, and being a part of a
10.0 acre tract described in Deed from Graham Benevolent Foundation to Xxxx
Region et al recorded in Volume 414, Page 63, Deed Records of Young County,
Texas and described as follows:
BEGINNING at spike in North boundary line of F.M. Highway No. 2179 (formerly
Texas Highway No. 24) at the intersection of North line of Highway with South
boundary line of Old Jacksboro Road;
THENCE with the South boundary line of Xxx Xxxxxxx Xxxx Xxxxx 00-00 Xxxx 120.5
feet to spike and North 89-30 West 889.0 feet to spike for Northwest corner of
this tract and Northeast corner of West 60 feet (1.025 acres) of said 10.0 acre
tract;
THENCE with South East line of 1.025 acre tract 524.7 feet to spike for
Northwest corner of 0.531 acre tract;
THENCE East 154.02 feet to spike for Northeast corner of 0.531 acre tract;
THENCE South 100.61 feet to spike in North line of F.M. Highway No. 2179 at
Southeast corner of 0.531 acre tract;
THENCE North 57-10 East with North line of Highway 952.6 feet to the PLACE OF
BEGINNING; and being all of said 10.0 acres;
SAVE AND EXCEPT: the West 60 feet of said 10.0 acre tract described in Deed to
City of Xxxxxx, recorded in Volume 732, Page 185, Deed Records of Young County,
Texas, and containing 1.025 acres; and
SAVE AND EXCEPT 0.531 acre described as follows:
BEGINNING in South line of said 10 acres at the Southeast corner of the West 60
feet (1.025 acres) of said 10 acres, and being 71.4 feet North 57-10 East of the
Southeast corner of said 10 acres;
THENCE North with the East line of 1.025 acres 200 feet to spike;
THENCE East 154.02 feet to spike;
THENCE South 100.61 feet to spike in North line of Highway;
THENCE South 57-10 West 183.30 feet to the PLACE OF BEGINNING.
NOTE: THIS COMPANY DOES NOT REPRESENT THAT THE ABOVE ACREAGE OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.
SECOND TRACT:
Being 4.13 acres out of Xxx Xxxxxxxx Survey, Abstract Number 271, in Young
County, Texas, being the same land described in Deed from Parameter Purchases,
Inc. to Graham Magnetics, Inc., recorded in Volume 638, Page 16, Deed Records of
Young County, Texas described as follows:
BEGINNING at corner in North boundary line of Old Jacksboro Road 350 feet West
of the EBL of said Xxxxxxxx Survey, and also being 100 feet North and 748.5 feet
South 89-30 East of the Northwest corner of 10.0 acre tract described in Deed
from Graham Benevolent Foundation to Xxxx Region et al, recorded in Volume 414,
Page 3, Deed Records of Young County, Texas;
THENCE North 89-30 West with North line of Old Jacksboro Road 300 feet to iron
rod of corner;
THENCE North 00-30 East 600 feet to corner;
THENCE South 89-30 East 300 feet to corner;
THENCE South 00-30 West 600 feet to PLACE OF BEGINNING.
NOTE: THIS COMPANY DOES NOT REPRESENT THAT THE ABOVE ACREAGE OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.
THIRD TRACT:
Being 5.20 acres out of Xxx Xxxxxxxx Survey, Abstract Number 271, in Young
County, Texas, being the same land described in Deed from Parameter Purchases,
Inc. to Graham Magnetics, Inc., recorded in Volume 638, Page 16, Deed Records of
Young County, Texas, and described as follows:
BEGINNING at the Southeast corner of 4.13 acres described in Second Tract above;
THENCE North 00-30 East 600 feet to Northeast corner of said 4.13 acre tract;
-2-
THENCE South 89 deg. 30 min. East 396.1 feet to East line of Xxxxxxxx Survey;
THENCE South 00 deg. 18 min. West wtih East line of Xxxxxxxx Survey 229.7 feet
to corner;
THENCE West 17 feet to corner;
THENCE South 06-00 West 411 feet to corner in North boundary line of Old
Jacksboro Road;
THENCE with North line of Xxx Xxxxxxxxx Xxxx Xxxxx 00-00 Xxxx 96.5 feet and
North 89-30 West 252 feet to the PLACE OF BEGINNING.
NOTE: THIS COMPANY DOES NOT REPRESENT THAT THE ABOVE ACREAGE OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.
FOURTH TRACT:
Being 1.648 acres out of Xxx Xxxxxxxx Survey, Abstract Number 271, in Young
County,
Texas, being more particularly described as follows:
BEGINNING in South boundary line of Old Jacksboro Road 448.5 feet South 89-30
East of the Northwest corner of 10 acre tract described in Deed from Graham
Benevolent Foundation to East Region et al recorded in Volume 414, Page 63, Deed
Records of Young County, Texas;
THENCE North 100 feet to iron rod at Southwest corner of 4.13 acre tract
described in Second Tract;
THENCE following South line of said 4.13 acres and 5.20 acres described in Third
Xxxxx Xxxxx 00-00 Xxxx 000 feet and South 65-45 East 96.5 feet to spike;
THENCE South 05-19-34 East 107.3 feet to spike on North boundary line of X.X.
Xxxxxxx Xx. 0000;
THENCE South 57-10 West 100 feet to East corner of 8.444 acres described in
First Tract;
THENCE following North line of 8.44 acres North 32-53 West 120.50 feet and North
89-30 West 500.5 feet tot he PLACE OF BEGINNING, and being the same land
described in Deed from the City of Xxxxxx, recorded in Volume 732, Page 186,
Deed Record of Young County, Texas.
NOTE: THIS COMPANY DOES NOT REPRESENT THAT THE ABOVE ACREAGE OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.
-3-
EXHIBIT D
FORM OF
JOINDER AGREEMENT
JOINDER AGREEMENT, dated as of the date set forth below, entered into
pursuant to the Credit And Guarantee Agreement, dated as of February __, 1997
(as amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"; terms defined therein being used herein as therein defined), among
Anacomp, Inc. (the "COMPANY"), the Foreign Subsidiary Borrowers parties thereto,
the banks and financial institutions parties thereto, The First National Bank of
Chicago, as Administrative Agent and Xxxxxx Commercial Paper Inc., as Arranger
and Syndication Agent.
W I T N E S E T H:
WHEREAS, the parties to this Joinder Agreement wish to amend Schedule
II to the Credit Agreement in the manner hereinafter set forth; and
WHEREAS, this Joinder Agreement is entered into pursuant to subsection
14.1 of the Credit Agreement;
NOW, THEREFORE, in consideration of the premises, the parties hereto
hereby agree as follows:
1. Each of the undersigned Subsidiaries of the Company hereby
acknowledges that it has received and reviewed a copy (in execution form) of the
Credit Agreement, and agrees to:
(a) join the Credit Agreement as a Foreign Subsidiary Borrower;
(b) be bound by, and hereby confirms, all covenants, agreements, consents,
submissions, appointments and acknowledgements attributable to a
Foreign Subsidiary Borrower in the Credit Agreement; and
(c) perform all obligations required of it by the Credit Agreement.
2. Each of the undersigned Subsidiaries of the Company hereby
represents and warrants that the representations and warranties with respect to
it contained in, or made or deemed made by it in, Section 7 of the Credit
Agreement are true and correct on the date hereof.
3. The address and jurisdiction of incorporation of each undersigned
Subsidiary of the Company is set forth in Annex I to this Joinder Agreement.
2
4. The Company hereby agrees that its guarantees contained in Section
11 of the Credit Agreement shall remain in full force and effect after giving
effect to this Joinder Agreement.
5. THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, each of the undersigned has caused this Joinder
Agreement to be duly executed and delivered in New York, New York by its proper
and duly authorized officer as of the date set forth below.
[NAME OF SUBSIDIARY],
Dated: ________________ as a Foreign Subsidiary Borrower
By:___________________________
Title:
ANACOMP, INC.
By:___________________________
Title:
ACCEPTED AND ACKNOWLEDGED:
The First National Bank of Chicago,
as Administrative Agent
By:______________________________
Title:
ANNEX I
ADMINISTRATIVE INFORMATION
[Insert administrative information concerning Foreign Subsidiary Borrower].
EXHIBIT E
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of February ,
1997 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among Anacomp, Inc. (the "COMPANY"), the Foreign Subsidiary
Borrowers (together with the Company, the "BORROWERS"), the Lenders named
therein, The First National Bank of Chicago, as administrative agent for the
Lenders (in such capacity, the "ADMINISTRATIVE AGENT") and Xxxxxx Commercial
Paper Inc., as Arranger and Syndication 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 identified on Schedule l hereto (the "ASSIGNOR") and the
Assignee identified on Schedule l hereto (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), the interest described in Schedule 1 hereto
(the "ASSIGNED INTEREST") in and to the Assignor's rights and obligations under
the Credit Agreement with respect to those credit facilities contained in the
Credit Agreement as are set forth on Schedule 1 hereto (individually, an
"ASSIGNED FACILITY"; collectively, the "ASSIGNED FACILITIES"), in a principal
amount for each Assigned Facility as set forth on Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to 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 the Assignor 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 Borrowers, any of their Subsidiaries or any other
obligor or the performance or observance by the Borrowers, any of their
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 any Notes held
by it evidencing the Assigned Facilities and (i) requests that the
Administrative Agent, upon request by the Assignee, exchange the attached Notes
for a new Note or Notes payable to the Assignee and (ii) if the Assignor has
retained any interest in the Assigned Facility, requests that the Administrative
Agent exchange the attached Notes for a new Note or Notes payable to the
Assignor, in each case in amounts which reflect the assignment being made hereby
(and after giving effect to any other assignments which have become effective on
the Effective Date).
2
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 7.1 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon the Assignor, the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (d) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; 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
6.12(b) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be the
Effective Date of Assignment described in Schedule 1 hereto (the "EFFECTIVE
DATE"). Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance by it and recording by the
Administrative Agent pursuant to the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to the Effective Date
and to the Assignee for amounts which have accrued subsequent to the Effective
Date. The Assignor and the Assignee shall make all appropriate adjustments in
payments by the Administrative 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.
3
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 1 hereto.
Schedule 1
to Assignment and Acceptance
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Credit Principal Commitment Percentage
Facility Assigned Amount Assigned Assigned
----------------- --------------- ------------------------
$______________ ___.________________%
[Name of Assignee] [Name of Assignor]
By:_________________________ By:_________________________
Title: Title:
Accepted: Consented To:
The First National Bank of ANACOMP, INC.
Chicago, as Administrative
Agent
By:_________________________ By:_________________________
Title: Title:
EXHIBIT F-1
February 28, 1997
The First National Bank of Chicago,
as Administrative Agent
Xxxxxx Commercial Paper Inc.,
as Arranger and Syndication Agent
And
Each of the Lenders named in Annex A hereto that are
parties to the Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as special counsel to Anacomp, Inc., an Indiana
corporation ("Anacomp"), in connection with the preparation, execution and
delivery of (i) the Credit and Guarantee Agreement, dated as of February 28,
1997 (the "Credit Agreement"), among Anacomp, certain foreign subsidiaries of
Anacomp parties thereto as Foreign Subsidiary Borrowers, the lenders parties
thereto (the "Lenders"), Xxxxxx Commercial Paper Inc., as arranger and
syndication agent, and The First National Bank of Chicago, as Administrative
Agent (in such capacity, the "Administrative Agent"). This opinion letter is
being furnished pursuant to subsection 9.1(j)(i) of the Credit Agreement.
Capitalized terms used herein shall have the meanings assigned to them in the
Credit Agreement, except as otherwise defined herein.
In rendering the opinions set forth herein, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Credit Agreement, (ii) the Guarantee and Collateral
Agreement, (iii) the First Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing, dated February 28, 1997, made by Anacomp, Inc.,
as grantor, in favor of Chicago Title Insurance Company, as trustee, for the
benefit of the Administrative Agent, as beneficiary (the "Mortgage"), (iv)
unfiled copies of financing statements naming Anacomp, as debtor, and the
Administrative Agent, as secured party (the "Financing Statements"), which we
understand will be filed in the filing offices
The First National Bank of 2 February 28, 1997
Chicago, as Administrative Agent
listed on Schedule A hereto (the "Filing Offices"), (v) the Amended and
Restated Articles of Incorporation and Amended and Restated bylaws of
Anacomp as in effect on the date hereof, (vi) resolutions of the board of
directors of Anacomp relating to the Credit Agreement, the Guarantee and
Collateral Agreement, the Mortgage and the Financing Statements adopted on or
prior to the date hereof, and (vii) such certificates of public officials and
such other certificates, documents, records and statements of officers and
other representatives of Anacomp and public officials as we have deemed
appropriate or necessary as the basis for the opinions set forth below. As
to certain facts material to the opinions expressed herein, we have relied
upon, and assumed the accuracy of, (x) the representations and warranties
contained in the Credit Agreement, the Guarantee and Collateral Agreement and
the Mortgages and (y) the certificates and other documents, records and
statements referred to in item (vii) of the immediately preceding sentence.
We have assumed that each of Anacomp and each of the Foreign Subsidiary
Borrowers listed on Schedule II to the Credit Agreement (the "Existing Foreign
Subsidiary Borrowers") is a corporation validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has the requisite
corporate power and authority to own, pledge, mortgage and operate its
properties, to lease the property it operates under lease and to conduct its
business as now or currently proposed to be conducted, and that the execution
and delivery by Anacomp of each of the Credit Agreement, the Guarantee and
Collateral Agreement and the Mortgage and by each of the Existing Foreign
Subsidiary Borrowers of the Credit Agreement, the performance by Anacomp of the
Credit Agreement, the Guarantee and Collateral Agreement and the Mortgage and by
each of the Existing Foreign Subsidiary Borrowers of the Credit Agreement, and
the consummation of the transactions contemplated thereby, are within the
corporate powers of Anacomp or such Existing Foreign Subsidiary Borrower, as the
case may be, and have been duly authorized by all necessary corporate action,
and that each of the Existing Foreign Subsidiary Borrowers has duly executed and
delivered the Credit Agreement. We have further assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. We have also assumed the due
execution and delivery, pursuant to due authorization, by the Administrative
Agent and each Lender of the Credit Agreement ,and that the Administrative Agent
will comply with its obligations under the Credit Agreement and the Guarantee
and Collateral Agreement.
Members of our firm are admitted to the bar in the State of New York,
and we express no opinion as to the laws of any jurisdiction other than the
law of the State of New York and the law of the United States of America to
the extent specified herein.
Based upon the foregoing, and in reliance thereon, and subject to the
qualifications and exceptions stated herein, we are of the opinion that:
1. Based solely upon our review of the certificates of good standing
issued by authorities in such jurisdictions, Anacomp is duly qualified as a
foreign corporation and in
The First National Bank of 3 February 28, 1997
Chicago, as Administrative Agent
good standing under the laws of each jurisdiction in the United States listed
on Schedule D hereto, in the manner set forth in such certificates.
2. The execution and delivery of each of the Credit Agreement, the
Guarantee and Collateral Agreement and the Mortgage by Anacomp, the
performance by Anacomp of the Credit Agreement, the Guarantee and Collateral
Agreement and the Mortgage and the consummation of the transactions
contemplated thereby, (i) do not and will not (A) contravene Anacomp's
Amended and Restated Articles of Incorporation or Amended and Restated
bylaws, (B) violate any provision of (1) any existing law or regulation
binding on Anacomp or (2) to the best of our knowledge, any order, judgment,
award or decree of any court, governmental authority or agency binding on
Anacomp, (C) conflict with or result in the breach of, or constitute a
default under, or result in or permit the termination or acceleration of, any
agreement, contract, mortgage, lease, note, bond, credit agreement, security
agreement, guarantee or other arrangement or instrument or obligation of
Anacomp listed on Schedule C (collectively, "Contractual Obligations"), which
Contractual Obligations officers of Anacomp have represented to us constitute
all of the material contractual obligations of Anacomp as of the date hereof
or (D) result in or require the creation or imposition of any Lien upon any
property of Anacomp pursuant to any Contractual Obligations, other than those
in favor of the Administrative Agent on behalf of and for the ratable benefit
of the Lenders and (ii) do not require any consent, authorization by or
approval of, or notice to or filing or registration with, any New York or
United States Governmental Authority with respect to Anacomp or any Existing
Foreign Subsidiary Borrower, other than the filing of the Financing
Statements referred to in paragraph 5 and the recording of the Mortgage.
3. Each of the Credit Agreement and the Guarantee and Collateral
Agreement has been duly executed and delivered by, and constitutes the legal,
valid and binding obligation of, Anacomp, enforceable against Anacomp in
accordance with its terms. The Credit Agreement constitutes the legal, valid
and binding obligation of each of the Existing Foreign Subsidiary Borrowers,
enforceable against each such Existing Foreign Subsidiary Borrower in
accordance with its terms.
4. To the best of our knowledge, except as set forth in Schedule 7.6
to the Credit Agreement, there are no pending or threatened actions,
investigations or proceedings affecting Anacomp, or any of its properties,
before any court, governmental authority or arbitrator that have a reasonable
likelihood of having, individually or in the aggregate, a Material Adverse
Effect. To the best of our knowledge, (i) neither the transactions
contemplated by the Credit Agreement, or the Guarantee and Collateral
Agreement or the Mortgage nor the performance of any obligation by Anacomp
required or contemplated by the Credit Agreement, or the Guarantee and
Collateral Agreement or the Mortgage, as the case may be, is the subject of
any pending or threatened litigation and (ii) no material adverse condition
has been imposed by any governmental authority or arbitrator upon any of the
foregoing transactions.
The First National Bank of 4 February 28, 1997
Chicago, as Administrative Agent
5. Anacomp is not (a) an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended, or (b) a "holding company" or a "subsidiary
company" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
6. Subject to the qualifications set forth in this opinion letter,
the Guarantee and Collateral Agreement creates in favor of the Administrative
Agent a security interest in the collateral described therein to which
Article 9 of the New York UCC is applicable (the "Article 9 Collateral").
Upon the filing of the Financing Statements in the Filing Offices, the
Administrative Agent will have a perfected security interest in that portion
of the Article 9 Collateral in which a security interest may be perfected by
filing a financing statement under the New York UCC (the "New York Article 9
Filing Collateral"). Subject to the qualifications set forth in this
opinion, the security interest of the Administrative Agent in that portion of
the New York Article 9 Filing Collateral consisting of the non-negotiable
instruments listed on Schedule 2 to the Guarantee and Collateral Agreement
(the "Pledged Instruments") will be a perfected security interest upon
delivery thereof to the Administrative Agent of the Pledged Instruments in
the State of New York.
7. The Guarantee and Collateral Agreement creates in favor of the
Administrative Agent a security interest under the New York UCC in the shares
of stock of the Issuers identified on Schedule 2 to the Guarantee and
Collateral Agreement under the heading "Pledged Stock" (the "Pledged Shares";
collectively, the Pledged Shares and the Article 9 Collateral is herein
referred to as the "Collateral"). With respect to any Pledged Shares which
may constitute "certificated securities" as defined in Section 8-102(1)(a) of
the New York UCC (the "New York Certificated Securities"), upon the delivery
of certificates representing the New York Certificated Securities to the
Administrative Agent in the State of New York the security interest of the
Administrative Agent in such New York Certificated Securities will be
perfected, and, assuming that the Administrative Agent acquires its interest
in the New York Certificated Securities in good faith and without notice of
any adverse claims and that each New York Certificated Security is either in
bearer form or in registered form, issued or indorsed in the name of the
Administrative Agent or in blank, the Administrative Agent will acquire its
security interest in the New York Certificated Securities free of adverse
claims.
8. The principal of, interest on, or other amounts owing with respect
to the Loans, and Reimbursement Obligations, whether incurred on the date
hereof or hereafter, constitute "Senior Indebtedness" as defined in the
Indenture, dated as of June 4, 1996 (the "Indenture"), between Anacomp and
IBJ Xxxxxxxx Bank & Trust Company, as trustee, relating to the Existing
Subordinated Debt.
Anything to the contrary expressly stated or implied notwithstanding,
each of the opinions expressed herein is subject to the following
qualifications whether or not such opinions refer to such qualifications:
The First National Bank of 5 February 28, 1997
Chicago, as Administrative Agent
a. (i) Our opinions set forth in paragraph 3 are subject to the effect
of applicable bankruptcy, insolvency, reorganization, moratorium and other
laws relating to, or affecting, creditors' rights and remedies generally and
general principles of equity (regardless of whether the same are considered
in a proceeding at law or equity); (ii) certain remedial provisions of the
Guarantee and Collateral Agreement and the Mortgage may be unenforceable in
whole or in part, but the inclusion of such provisions does not affect the
validity of the Guarantee and Collateral Agreement or the Mortgage, and each
of the Guarantee and Collateral Agreement and the Mortgage, in each case, as
a whole contain adequate provisions for enforcing the obligations of Anacomp
(subject to clauses (i) and (iii)) and for the practical realization of the
benefits created thereby; and (iii) with respect to the indemnity and
contribution provisions contained in either of the Credit Agreement or the
Guarantee and Collateral Agreement, our opinions are subject to the
qualification that such provisions may be limited by federal or state
securities laws or public policy considerations.
b. Our opinions in paragraph 6 are limited to Article 9 of the New York
UCC, and our opinions in paragraph 7 are limited to Article 8 of the New York
UCC, and therefore those opinion paragraphs do not address (i) laws of
jurisdictions other than New York, and of New York except for Article 9 or 8,
as the case may be, of the New York UCC, (ii) collateral of a type not
subject to Article 9 or 8, as the case may be, of the New York UCC, and (iii)
under New York UCC Section 9-103 what law governs perfection of the security
interests granted in the collateral covered by this opinion letter. In
particular, we note that the issuers of the Pledged Shares are organized
under the laws of England, France and Germany, and we express no opinion
regarding whether, under the laws of England, France or Germany or in an
action brought in an English, French or German court, the security interest
under the New York UCC in the Pledged Shares would be given effect.
c. Our opinions are limited to the laws and regulations within the scope
of this opinion in effect on the date of this opinion, and we offer no
opinion as to the possible application of the laws of other jurisdictions,
unless they are specifically referred to herein, and have no responsibility
to advise you of changes in such laws or regulations which may hereafter come
to our attention.
d. Our opinions set forth in paragraph 2 are limited to (i)
authorizations, consents, approvals, licenses and exemptions of,
registrations and filings with, reports and notices to, governmental
authorities of the State of New York or the United States of America pursuant
to the requirements of, and (ii) violations of, conflicts with and defaults
under, any laws, rules or regulations of the State of New York or the United
States, which, in our experience, are normally applicable to transactions of
the type provided for in the Credit Agreement and the Guarantee and
Collateral Agreement.
e. We express no opinion with respect to the effect of Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Bankruptcy Code (relating to property acquired by Anacomp
after the commencement of a case under the United States Bankruptcy Code with
respect to either such party) and Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy
Code (relating to a security interest in such after-acquired property which
serves to secure antecedent debt).
The First National Bank of 6 February 28, 1997
Chicago, as Administrative Agent
f. We express no opinion as to (i) the effect of the laws of any
jurisdiction in which the Administrative Agent, the Arranger or any Lender is
located (other than the State of New York) that limit the interest, fees or
other charges the Lenders may impose; (ii) the right of any Participant to
exercise any right of set off as contemplated by subsection 14.6(b) of the
Credit Agreement other than in accordance with applicable law; (iii) any
provision of the Loan Documents which is intended (I) to establish any
standard other than any standard set forth in the New York UCC as the measure
of the performance by any party thereto of such party's obligation of good
faith, diligence, reasonableness or care or the fulfillment of the duties
imposed on any secured party with respect to the disposition or redemption of
collateral, accounting for surplus proceeds of collateral or accepting
collateral in discharge of liabilities or (II) to permit modification thereof
only by means of an agreement signed in writing by the parties thereto; (iv)
except as set forth in paragraphs 6 and 7 above, the perfection or priority
of any liens or security interests purported to be granted under the Loan
Documents; (v) any provision of the Loan Documents requiring payment of
attorneys' fees, except to the extent a court determines such fees to be
reasonable; (vi) any provisions in Section 11 of the Credit Agreement or in
the Guarantee and Collateral Agreement that provide that the guarantor's
liability thereunder shall not be affected by actions or failures to act on
the part of the recipient of the guarantee or by amendments or waivers of
provisions of documents governing the guaranteed obligations; and (vii) the
effect of the compliance or noncompliance with any federal or state laws or
regulations applicable to any Lender or its affiliates because of their legal
or regulatory status or the nature of their businesses.
g. We express no opinion as to the enforceability of any provision of
any Loan Document whereby any Loan Party purports to submit to the subject
matter jurisdiction of the United States District Court for the Southern
District of New York. We note the limitations of 28 U.S.C. Section 1332 on
federal court jurisdiction where diversity of citizenship is lacking, and we
also note that such submissions cannot supersede that court's discretion in
determining whether to transfer an action from one federal court to another
under 28 U.S.C. Section 1404(a).
h. We express no opinion as to:
(i) the perfection of the security interests created by the
Guarantee and Collateral Agreement in any Collateral not located in the
State of New York or as to which a security interest may not be
perfected by filing a financing statement on Form UCC-1 in an
appropriate office within the State of New York;
(ii) changes in the status of the security interest of the
Administrative Agent and the Lenders in the Collateral under Sections
363, 364(d), 510(c) or 1129(b) of the United States Bankruptcy Code;
(iii) the validity or perfection of the security interests
The First National Bank of 7 February 28, 1997
Chicago, as Administrative Agent
as against the rights of purchasers of chattel paper, instruments or
securities or of holders in due course of negotiable instruments or
holders to whom documents of title have been duly negotiated as provided
in Section 7-501 of the New York UCC, all to the extent provided in
Sections 9-308 and 9-309 of the New York UCC;
(iv) the perfection of the security interests in any Collateral
sold, exchanged, leased or otherwise disposed of by Anacomp in the
ordinary course of business as provided in the Credit Agreement and the
Guarantee and Collateral Agreement or with the consent, express or
implied, of the Administrative Agent;
(v) the perfection of the security interests in any Collateral more
than four months after such Collateral is removed from the State of New
York;
(vi) the validity or perfection of the security interests in any
Collateral constituting a right to payment under a contract as against
the rights of an assignee thereof who is also to do the performance
under the contact; and
(vii) any state or federal securities laws which may require
registration or other compliance upon the sale of any of the Collateral
pursuant to the Credit Agreement and the Guarantee and Collateral
Agreement.
Our opinions set forth in paragraphs 6 and 7 are subject to the
following further qualifications:
(a) we have assumed that the Collateral exists and that Anacomp has
sufficient rights in the Collateral for the security interest of the
Administrative Agent to attach. We express no opinion as to the nature or
extent of Anacomp's rights in, or title to, any of the Collateral;
(b) we have assumed the accuracy of the representations and warranties
of Anacomp in the Guarantee and Collateral Agreement;
(c) we have assumed that the the Loans have been made to Anacomp;
(d) the security interest of the Administrative Agent and the Lenders in
Collateral consisting of proceeds is limited to the extent set forth in
Section 9-306 of the New York UCC;
The First National Bank of 8 February 28, 1997
Chicago, as Administrative Agent
(e) we express no opinion regarding the security interest of the Lender
in any item of Collateral (i) of a type listed in Section 9-104 of the New
York UCC (including but not limited to any interest in or claim in or under
any deposit account or insurance policy, or any interest which constitutes
real estate, including any lease or rents thereunder);
(f) we express no opinion as to Collateral (i) which is an accession to,
or commingled or processed with other goods to the extent that the security
interest of the Agent is limited by Section 9-314 or 9-315 of the New York
UCC or (ii) which consists or may consist of items which are subject to a
certificate of title statute of any jurisdiction or a document of title;
(g) we express no opinion as to Collateral which consists or may consist
of items which are subject to a statute, regulation or treaty of the United
States of America which provides for a national or international registration
or a national or international certificate of title for the perfection of a
security interest therein or which specifies a place of filing different from
the place specified in the New York UCC for filing to perfect such security
interest;
(h) we express no opinion as to Collateral consisting of claims against
(including accounts, chattel paper or general intangibles) any government or
governmental agency (including without limitation the United States of
America or any state thereof or any agency or department of the United States
of America or any state thereof);
(i) we express no opinion regarding the security interest of the
Administrative Agent in any Collateral consisting of copyrights, patents,
trademarks, service marks or other intellectual property;
(j) we call to your attention that in the cases of licenses or permits
issued by governmental authorities, Anacomp may not have sufficient rights
therein for the security interest of the Agent to attach and even if Anacomp
has sufficient rights for the security interest to attach, exercise of
remedies may be limited by the terms of the license or permit or require the
consent of the governmental authority issuing such license or permit. We
have further assumed that to the extent the terms of licenses or permits (or
any laws or regulations applicable thereto) prohibit or condition the
transfer of any licenses or permits, consent to the transfer under the
Guarantee and Collateral Agreement has been obtained;
(k) we express no opinion with respect to any of the New York Article 9
Filing Collateral consisting of equipment used in farming operations, or farm
products, or accounts or general intangibles arising from or relating to the
sale of farm products by a xxxxxx, or consumer goods, crops growing or to be
grown, timber to be cut or minerals or the like (including oil and gas),
accounts subject to subsection 5 of Section 9-103 of the New York UCC, goods
which are or are to become fixtures, an
The First National Bank of 9 February 28, 1997
Chicago, as Administrative Agent
ownership interest evidenced by certificates of stock or other instruments
and a leasehold evidenced by a proprietary lease, or either of the foregoing,
from a corporation or partnership formed for the purpose of cooperative
ownership of real estate, or beneficial interests in trusts or a decedent's
estate;
(l) we call to your attention that the perfection of the security
interest of the Administrative Agent will be terminated as to any Collateral
acquired by Anacomp more than four months after Anacomp changes its name,
identity or corporate structure so as to make the Financing Statements
seriously misleading, unless new appropriate financing statements indicating
the new name, identity or corporate structure of Anacomp are filed before the
expiration of such four months;
(m) we call to your attention that the New York UCC requires the filing
of continuation statements within the period of six months prior to the
expiration of five years from the date of the filing of the original
Financing Statements or the filing of any continuation statement in order to
maintain the effectiveness of the original Financing Statements;
(n) we call to your attention that the perfection and the effect of
perfection or non-perfection of the security interest may be governed by laws
other than those of the New York UCC to the extent either the Collateral or
Anacomp is or becomes located in a jurisdiction other than New York;
(o) we express no opinion as to whether any of the Pledged Shares
constitute "certificated securities" as defined in Section 8-102(1)(a) of the
New York UCC;
(p) we express no opinion as to the priority of the security interest of
the Administrative Agent in any Collateral;
(q) we express no opinion with respect to the perfection or priority of
the security interests of the Administrative Agent in the Pledged Shares; and
(r) we express no opinion with respect to proceeds of, or distributions
on, Pledged Shares; however, any security interest of the Agent in Collateral
consisting of proceeds is limited to the extent set forth in Section 9-306 in
the New York UCC.
In rendering our opinion in paragraph 8, we have assumed that, after
giving effect to the incurrence of the Obligations on the date of such
incurrence and the application of the proceeds thereof (including the
application of the proceeds of the Loans on the date hereof to the payment in
full of the Senior Notes), there is no other indebtedness of Anacomp as of
such date constituting "Senior Indebtedness" as defined in the Indenture
(other than the Loans) and that none of the Loan Documents nor the Indenture
have been amended, or otherwise modified.
The First National Bank of 10 February 28, 1997
Chicago, as Administrative Agent
When in this opinion letter we have used the expression "to the best of
our knowledge," we have not made any independent investigation of the
applicable facts, but have relied solely on certificates of Anacomp and are
not aware of any facts inconsistent with the matters expressed in this
opinion letter.
In connection with our opinions expressed herein, we have assumed, with
your permission, that the Financing Statements have been or will be presented
for filing, with tender of the filling fee, to the filing officers at the
proper Filing Offices.
We have not been requested to render and, with your permission, we
express no opinion as to the applicability to any transfers by, or
obligations under the Loan Documents of, the Loan Parties of Section 548 of
the United States Bankruptcy Code or Article 10 of the New York Debtor and
Creditor Law relating to fraudulent transfers and obligations.
We understand that the opinion letters listed on Schedule B to this
opinion are being delivered to you in connection with the transactions
contemplated by the Credit Agreement and the Guarantee and Collateral
Agreement. We believe that, in the case of the opinions relating to
jurisdictions of or within the United States, you are justified in relying on
the opinions expressed therein, and in the case of the other opinions
referred to thereon, we know of no reason why you are not justified in
relying on the opinions expressed therein.
This opinion is being furnished only to you as the Administrative Agent
and Arranger under the Credit Agreement, and to your counsel, and is solely
for your and their benefit and the benefit of any present Lenders and is not
to be used, circulated, quoted, relied upon or otherwise referred to for any
purpose without our prior written consent, except that this opinion may be
referred to or disclosed to any governmental authority or representative
thereof, or pursuant to legal process, in connection with litigation, or by
your independent public accountants, any valuation consultants, any potential
or actual purchasers, assignees, or transferees of Notes, or your legal
counsel, but in any event shall not be relied upon by any of the foregoing
persons or any other persons without our prior written consent.
Very truly yours,
Annex A
Lenders
Xxxxxx Commercial Paper Inc.
The First National Bank of Chicago
Prime Income Trust
The ING Senior Secured High Income Fund, X.X.
Xxxxxxx Xxxxx Senior Floating Rate Fund, Inc.
Pilgrim American Group Inc.
Protective Life Insurance Company
XxxXxxxxx American Capital Prime Rate Income Trust
Crescent/Mach I Partners, L.P.
Schedule A
Filing Offices
Secretary of State of New York
Schedule B
Local Counsel Opinions
Opinions dated the date hereof of the following counsel:
Leagre & Xxxxxx (Indiana)
Burlion, Bolle, Houben & Co. (Belgium)
Xxxxx Xxxxx (Canada)
Xxxxxxxxx & May (England)
Xxxxx & XxXxxxxx (France)
Doser Amereller Xxxxx (Germany)
Trenite Van Doorne (Netherlands)
Xxxxx & XxXxxxxx (Sweden)
Schedule C
Material Contractual Obligations
1. Employment Agreement between Anacomp, Inc. and Xxxxxx X. Xxxxxxx,
effective October 1, 1992.
2. Amended and Restated Master Supply Agreement dated October 8, 1993, among
Anacomp, Inc., SKC America, Inc. and SKC Limited, as amended by the First
Cumulative Amendment, dated May 17, 1996.
3. Lease agreement dated June 24, 1993 and Amendment No. 1 dated October 19,
1994 between Anacomp, Inc. and Com-Lease, Inc.
4. Amended and Restated Employment Agreement between Anacomp, Inc. and X.
Xxxx Xxxxxx III, effective as of October 1, 1996.
5. Lease Agreement between Anacomp, Inc. and Pacific Xxxxxxx Properties,
Inc. dated March 5, 1991, as amended by the First Amendment to Lease dated
August 1, 1991, the Second Amendment to Lease dated September 18, 1991, the
Third Amendment to Lease dated June 25, 1992, the Fourth Amendment to Lease
dated May 27, 1993, and the Fifth Amendment to Lease dated March 1, 1996.
6. Indenture dated as of June 4, 1996 between Anacomp, Inc. and IBJ Xxxxxxxx
Bank & Trust Company, as Administrative Agent, relating to Anacomp, Inc.'s
13% Senior Subordinated Notes due 2002.
7. Credit Agreement, dated as of February 28, 1997, among Anacomp, Inc., the
lenders parties thereto, and The First National Bank of Chicago, as
Administrative Agent.
8. Guarantee and Collateral Agreement, dated as of February 28, 1997,
between Anacomp, Inc. and The First National Bank of Chicago.
9. First Deed of Trust, Assignment of Rents, Security Agreement and Fixture
Filing, dated February 28, 1997, made by Anacomp, Inc., as grantor, in favor
of Chicago Title Insurance Company, as trustee, for the benefit of The First
National Bank of Chicago, as beneficiary.
10. XCF Program-Contract AI0001 dated as of October 7, 1992, made between
Xerox and Anacomp, Inc.
11. AFP/COM Base Agreement dated as of June 9, 1994, as amended, made between
International Business Machines, Inc. and Anacomp, Inc.
12. Strategic Resellers Agreement dated as of November 29, 1995, made between
Optica and Anacomp, Inc.
13. Exclusive Distribution Agreement dated as of June 1, 1995, made between
Hanny Magnetics (B.V.I.) Limited, Memtek Products, Inc. and Anacomp, Inc.
14. Tape Cartridge License Agreement dated effective as of February 1, 1989,
made between Digital Equipment Corporation (subsequently assigned to Quantum
Corporation) and Anacomp, Inc.
15. Patent License Agreement dated effective as of January 1, 1992, made
between International Business Machines Corporation and Anacomp, Inc.
16. Master Agreement for Development, License and Distribution dated as of
December 31, 1996, made between FileNet Company Limited and Anacomp, Inc.
17. Distribution Agreement dated October 1, 1992, as amended, made between
Anacomp, Inc. and Xxxxxxx Kodak Company.
18. Master Supply Agreement dated July 1, 1996, made between Xxxxxxx Kodak
Company and Anacomp, Inc.
19. Duplicate Film Agreement dated July 1, 1996, made between Xxxxxxx Kodak
Company and Anacomp, Inc.
20. Master Maintenance Agreement dated October 1, 1993, made between First
Image Management Company and Anacomp, Inc.
21. Equipment and Supplies Agreement dated effective September 29, 1994, made
between First Image Management Company and Anacomp, Inc.
22. Equipment and Supplies Agreement dated September 29, 1993, made between
First Image Management Company and Anacomp, Inc.
23. Employment Agreement between Anacomp, Inc. and Xxxxxxx X. Xxxx, effective
October 1, 1992.
24. Employment Agreement between Anacomp, Inc. and Xxxxxx X. Xxxxx, effective
February 15, 1996.
25. Employment Agreement between Anacomp, Inc. and Xxxxx X. Xxxxxxx,
effective January 6, 1997.
26. Third Amended Joint Plan of Reorganization of Anacomp, Inc. and certain
of its Subsidiaries.
27. Warrant Agreement, dated as of June 4, 1996, between Anacomp, Inc. And
Xxxxx Xxxxxx Shareholder Services, L.L.C.
28. Common Stock Registration Rights Agreement, dated as of June 4, 1996, by
and among Anacomp, Inc. and the holders of Registrable Shares referenced
therein.
29. Senior Subordinated Registration Rights Agreement, , dated as of June 4,
1996, by and among Anacomp, Inc. and the holders of Registrable Shares
referenced therein.
Schedule D
Good Standing Certificates
Texas
California
New York
Georgia
Massachusetts
Ohio
Exhibit F-2
February 28, 1997
The First National Bank of Chicago,
as Administrative Agent
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxxx Commercial Paper Inc.,
as Arranger and Syndication Agent
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Each of the Lenders named in Annex A hereto that are
parties to the Credit Agreement referred to below
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as special counsel to Anacomp, Inc., an Indiana corporation
("Anacomp"), in connection with the preparation, execution and delivery of (i)
the Credit and Guarantee Agreement, dated as of February 28, 1997 (the "Credit
Agreement"), among Anacomp, certain foreign subsidiaries of Anacomp parties
thereto as Foreign Subsidiary Borrowers, the lenders party thereto
(collectively, the "Lenders"), Xxxxxx Commercial Paper Inc., as arranger and
syndication agent, and The First National Bank of Chicago, as administrative
agent (in such capacity, the "Administrative Agent"). This opinion letter is
being furnished pursuant to subsection 9.1(j)(i) of the Credit Agreement.
Capitalized terms used herein shall have the meanings assigned to them in the
Credit Agreement, except as otherwise defined herein.
In rendering the opinions set forth herein, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Credit Agreement, (ii) the Guarantee and Collateral
Agreement, (iii) the First Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing, dated February 28, 1997, made by Anacomp, Inc., as
grantor, in favor of Chicago Title Insurance Company, as trustee, for the
benefit of the Administrative Agent, as beneficiary, (iv) unfiled copies of
financing statements naming Anacomp, as debtor and the Administrative Agent, as
secured party (the "Financing Statements"), which we understand will be filed in
the filing offices listed on Schedule A hereto
The First National Bank of Chicago -2- February 28, 1997
(the "Filing Offices"), (v) the Amended and Restated Articles of Incorporation
and Amended and Restated Bylaws of Anacomp as in effect on the date hereof, (vi)
resolutions of the board of directors of Anacomp relating to the Credit
Agreement, the Guarantee and Collateral Agreement, the Mortgage and the
Financing Statements (collectively, the "Loan Documents") adopted on or prior to
the date hereof, and (vii) such certificates of public officials and such other
certificates, documents, records and statements of officers and other
representatives of Anacomp and public officials as we have deemed appropriate or
necessary as the basis for the opinions set forth below. As to certain facts
material to the opinions expressed herein, we have relied solely upon, and have
assumed the accuracy, without any investigation or inquiry, of (x) the
representations and warranties contained in the Loan Documents, and (y) the
certificates and other documents, records and statements referred to in item
(vii) of the immediately preceding sentence.
We have assumed the genuineness of all signatures, the legal capacity of
all natural persons, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to us
as certified or photostatic copies and the authenticity of the originals of such
copies. We have also assumed the due execution and delivery, pursuant to due
authorization, by the Administrative Agent and each Lender of the Credit
Agreement, and that the Administrative Agent will comply with its obligations
under the Credit Agreement and the Guarantee and Collateral Agreement.
Members of our firm are admitted to the bar in the State of Indiana, and we
express no opinion as to the laws of any other jurisdiction.
Based upon the foregoing, and in reliance thereon, and subject to the
qualifications and exceptions stated herein, we are of the opinion that:
1. Based solely upon our review of the Certificate of Existence of
Anacomp, Inc., dated February 18, 1997, issued by the Indiana Secretary of
State, Anacomp is a corporation duly organized and validly existing under the
laws of the State of Indiana and has the corporate power to execute and deliver
the Loan Documents and to perform its obligations thereunder.
2. Anacomp has taken all necessary actions to authorize the execution of
the Loan Documents, and the execution and delivery of each of the Loan Documents
by Anacomp, the performance by Anacomp of the Loan Documents and the
consummation of the transactions contemplated thereby, (i) do not and will not
(A) contravene Anacomp's Amended and Restated Articles of Incorporation or
Amended and Restated By-Laws, (B) violate any provision of (1) any existing
Indiana law or regulation binding on Anacomp or (2) to the best of our
knowledge, any order, judgment, award or decree of any Indiana court, Indiana
governmental authority or agency binding on Anacomp, and (ii) do not require any
consent, authorization by or approval of, or notice to or filing or registration
with, any Indiana governmental authority with respect to Anacomp within the
scope of this opinion, other than the filing of the Financing Statements
referred to in paragraph 3.
The First National Bank of Chicago -3- February 28, 1997
3. Subject to the qualifications set forth in this opinion letter, (a)
the Guarantee and Collateral Agreement creates in favor of the Administrative
Agent a security interest in the collateral described therein to which Article 9
of the Uniform Commercial Code as in effect on the date hereof in the State of
Indiana (the "Indiana UCC") is applicable (the "Article 9 Collateral"), and (b)
upon the filing of the Financing Statements in the Filing Offices, the
Administrative Agent will have a perfected security interest in that portion of
the Article 9 Collateral in which a security interest may be perfected by filing
a financing statement under the Indiana UCC (the "Indiana Article 9
Collateral").
In giving the opinions expressed in paragraph 3, we have assumed, with your
permission, that the Administrative Agent will comply with its obligations under
the Credit Agreement and the Guarantee and Collateral Agreement.
Anything to the contrary expressly stated or implied notwithstanding, each
of the opinions expressed herein is subject to the following qualifications
whether or not such opinions refer to such qualifications:
(a) Our opinions are limited to the Indiana laws and regulations
within the scope of this opinion in effect on the date of this opinion, and
we offer no opinion as to the possible application of the laws of other
jurisdictions, unless they are specifically referred to herein, and have no
responsibility to advise you of changes in such laws or regulations which
may hereafter come to our attention.
(b) Our opinions in paragraph 3 are limited to Article 9 of the
Indiana UCC, and therefore those opinions do not address (i) laws of
jurisdictions other than Indiana, and of Indiana except for Article 9 of
the Indiana UCC, (ii) collateral of a type not subject to Article 9 of the
Indiana UCC, and (iii) under Indiana UCC Section 9-103 which law governs
perfection of the security interests granted in the collateral covered by
this opinion letter.
(c) Our opinions set forth in paragraph 2 are limited to (i)
authorizations, consents, approvals, licenses and exemptions of,
registrations and filings with, reports and notices to, governmental
authorities of the State of Indiana pursuant to the requirements of, and
(ii) violations of, conflicts with and defaults under, any laws, rules or
regulations of the State of Indiana (other than its securities laws, as to
which we express no opinion), which, in our experience, are normally
applicable to transactions of the type provided for in the Credit Agreement
and the Guarantee and Collateral Agreement.
(d) We express no opinion with respect to Anacomp's rights in or
title to or legal or beneficial ownership of any of the Collateral.
The First National Bank of Chicago -4- February 28, 1997
(e) We express no opinion with respect to the effect of Xxxxxxx 000
xx xxx Xxxxxx Xxxxxx Bankruptcy Code (relating to property acquired by
Anacomp after the commencement of a case under the United States Bankruptcy
Code with respect to either such party) and Xxxxxxx 000 xx xxx Xxxxxx
Xxxxxx Bankruptcy Code (relating to a security interest in such
after-acquired property which serves to secure antecedent debt).
(f) We express no opinion as to (i) any provision of the Loan
Documents which is intended (A) to establish any standard other than any
standard set forth in the Indiana UCC as the measure of the performance by
any party thereto of such party's obligation of good faith, diligence,
reasonableness or care or the fulfillment of the duties imposed on any
secured party with respect to the disposition or redemption of collateral,
accounting for surplus proceeds of collateral or accepting collateral in
discharge of liabilities or (B) to permit modification thereof only by
means of an agreement signed in writing by the parties thereto; and (ii)
except as set forth in paragraph 3 above, the perfection or priority of any
liens or security interests purported to be granted under the Loan
Documents.
(g) We express no opinion as to:
(i) the perfection of the security interests created by the
Guarantee and Collateral Agreement in any Collateral not located in
the State of Indiana or as to which a security interest may not be
perfected by filing a financing statement on Form UCC-1 in an
appropriate office within the State of Indiana;
(ii) changes in the status of the security interest of the
Administrative Agent and the Lenders in the Collateral under Sections
363, 364(d), 510(c) or 1129(b) of the United States Bankruptcy Code;
(iii) the validity or perfection of the security interests as
against the rights of purchasers of chattel paper, instruments or
securities or of holders in due course of negotiable instruments or
holders to whom documents of title have been duly negotiated as
provided in Section 7-501 of the Indiana UCC, all to the extent
provided in Sections 9-308 and 9-309 of the Indiana UCC;
(iv) the perfection of the security interests in any Article 9
Collateral sold, exchanged, leased or otherwise disposed of by Anacomp
in the ordinary course of business as provided in the Credit Agreement
and the Guarantee and Collateral Agreement or with the consent,
express or implied, of the Administrative Agent or the Lenders;
(v) the perfection of security interests in any Article 9
Collateral more than four months after such Article 9 Collateral is
removed from the State of Indiana;
The First National Bank of Chicago -5- February 28, 1997
(vi) the validity or perfection of the security interests in
any Article 9 Collateral constituting a right to payment under a
contract as against the rights of an assignee thereof who is also to
do the performance under the contact; and
(vii) any state or federal securities laws which may require
registration or other compliance upon the sale of any of the Article 9
Collateral pursuant to the Credit Agreement and the Guarantee and
Collateral Agreement.
Our opinions set forth in paragraph 3 are subject to the following further
qualifications:
(a) we have assumed that the Article 9 Collateral exists and that
Anacomp has sufficient rights in the Article 9 Collateral for the security
interest of the Administrative Agent to attach. We express no opinion as
to the nature or extent of Anacomp's rights in, or title to, any of the
Article 9 Collateral;
(b) we have assumed the accuracy of the representations and
warranties of Anacomp in the Guarantee and Collateral Agreement;
(c) we have assumed that the Loan has been made to Anacomp;
(d) the security interest of the Administrative Agent and the Lenders
in collateral consisting of proceeds is limited to the extent set forth in
Section 9-306 of the Indiana UCC;
(e) we express no opinion regarding the security interest of the
Lenders in any item of Article 9 Collateral (i) of a type listed in Section
9-104 of the Indiana UCC (including but not limited to any interest in or
claim in or under any deposit account or insurance policy, or any interest
which constitutes real estate, including any lease or rents thereunder);
(f) we express no opinion as to Article 9 Collateral (i) which is an
accession to, or commingled or processed with other goods to the extent
that the security interest of the Administrative Agent or the Lenders is
limited by Section 9-314 or 9-315 of the Indiana UCC or (ii) which consists
or may consist of items which are subject to a certificate of title statute
of any jurisdiction or a document of title;
(g) we express no opinion as to Article 9 Collateral which consists
or may consist of items which are subject to a statute, regulation or
treaty of the United States of America which provides for a national or
international registration or a national or international certificate of
title for the perfection of a security interest therein or which specifies
a place of filing different from the place specified in the Indiana UCC for
filing to perfect such security interest;
The First National Bank of Chicago -6- February 28, 1997
(h) we express no opinion as to Article 9 Collateral consisting of
claims against (including accounts, chattel paper or general intangibles)
any government or governmental agency (including without limitation the
United States of America or any state thereof or any agency or department
of the United States of America or any state thereof);
(i) we express no opinion regarding the security interest of the
Administrative Agent in any Article 9 Collateral consisting of copyrights,
patents, trademarks, service marks or other intellectual property;
(j) we call to your attention that in the cases of licenses or
permits issued by governmental authorities, Anacomp may not have sufficient
rights therein for the security interest of the Administrative Agent or the
Lenders to attach and even if Anacomp has sufficient rights for the
security interest to attach, exercise of remedies may be limited by the
terms of the license or permit or require the consent of the governmental
authority issuing such license or permit. We have further assumed that to
the extent the terms of licenses or permits (or any laws or regulations
applicable thereto) prohibit or condition the transfer of any licenses or
permits, consent to the transfer under the Guarantee and Collateral
Agreement has been obtained;
(k) we express no opinion with respect to any Indiana Article 9
Filing Collateral consisting of equipment used in farming operations, or
farm products, or accounts or general intangibles arising from or relating
to the sale of farm products by a xxxxxx, or consumer goods, crops growing
or to be grown, timber to be cut or minerals or the like (including oil and
gas), accounts subject to subsection 5 of Section 9-103 of the Indiana UCC,
goods which are or are to become fixtures, an ownership interest evidenced
by certificates of stock or other instruments and a leasehold evidenced by
a proprietary lease, or either of the foregoing, from a corporation or
partnership formed for the purpose of cooperative ownership of real estate,
beneficial interests in trusts or a decedent's estate, or the
non-negotiable instruments and shares of stock listed on Schedule 2 to the
Guarantee and Collateral Agreement;
(l) we call to your attention that the perfection of the security
interest of the Administrative Agent will be terminated as to any Article 9
Collateral acquired by Anacomp more than four months after Anacomp changes
its name, identity or corporate structure so as to make the Financing
Statements seriously misleading, unless new appropriate financing
statements indicating the new name, identity or corporate structure of
Anacomp are filed before the expiration of such four months;
(m) we call to your attention that the Indiana UCC requires the
filing of continuation statements within the period of six months prior to
the expiration of five years from the date of the filing of the original
Financing Statements or the filing of any
The First National Bank of Chicago -7- February 28, 1997
continuation statement in order to maintain the effectiveness of the
original Financing Statements;
(n) we call to your attention that the perfection and the effect of
perfection or non-perfection of the security interest may be governed by
laws other than those of the Indiana UCC to the extent either the Article 9
Collateral or Anacomp is or becomes located in a jurisdiction other than
Indiana; and
(o) we express no opinion as to the priority of the security interest
of the Administrative Agent in any Article 9 Collateral.
When in this opinion letter we have used the expression "to the best of our
knowledge", we have not made any independent investigation of or inquiry as to
the applicable facts, but have relied solely on certificates of Anacomp and are
not aware of any facts inconsistent with the matters expressed in this opinion
letter.
In connection with our opinions expressed herein, we have assumed, with
your permission, that the Financing Statements have been or will be presented
for filing, with tender of the filing fee, to the filing officers at the proper
Filing Offices.
This opinion is being furnished only to Cadwalader, Xxxxxxxxxx & Xxxx, as
counsel for Anacomp, to the Administrative Agent under the Credit Agreement, the
present Lenders and their counsel, and is solely for your and their benefit as
of the date hereof and is not to be used, circulated, quoted, relied upon or
otherwise referred to for any purpose without our prior written consent, except
that this opinion may be referred to or disclosed to any governmental authority
or representative thereof, or pursuant to legal process, in connection with
litigation, or by your independent public accountants, any valuation
consultants, any potential or actual purchasers, assignees, or transferees of
Notes, or your legal counsel, but in any event shall not be relied upon by any
of the foregoing persons without our prior written consent.
Very truly yours,
ANNEX A
LENDERS
Xxxxxx Commercial Paper Inc.
The First National Bank of Chicago
Prime Income Trust
The ING Capital Senior Secured High Income Fund, X.X.
Xxxxxxx Xxxxx Senior Floating Rate Fund, Inc.
Pilgrim America Group Inc.
Protective Life Insurance Company
Xxx Xxxxxx American Capital Prime Rate Income Trust
Crescent/Mach I Partners, L.P.
SCHEDULE A
FILING OFFICES
Indiana Secretary of State
Recorder of Elkhart County, Indiana
Recorder of Xxxxxxxx County, Indiana
Recorder of Xxxxxx County, Indiana
EXHIBIT G
MATTERS TO BE COVERED BY
OPINIONS RELATING TO THE
FOREIGN SUBSIDIARY BORROWERS
1. The Foreign Subsidiary Borrower is duly organized, validly
existing and in good standing under the laws of __________________ [specify the
jurisdiction of its organization] (the "JURISDICTION").
2. The Foreign Subsidiary Borrower has the power and authority, and
the legal right, to make, deliver and perform its obligations under the Credit
Agreement and to borrow under the Credit Agreement. The Foreign Subsidiary
Borrower has taken all necessary corporate action to authorize the performance
of its obligations as a "Foreign Subsidiary Borrower" under the Credit Agreement
and to authorize the execution, delivery and performance of the Credit
Agreement.
3. Except for consents, authorizations, approvals, notices and
filings described on an attached schedule, all of which have been obtained, made
or waived and are in full force and effect, no consent or authorization of,
approval by, notice to, filing with or other act by or in respect of, any
Governmental Authority is required in connection with the borrowings by the
Foreign Subsidiary Borrower under the Credit Agreement or with the execution,
delivery, performance, validity or enforceability of the Credit Agreement.
4. The Credit Agreement has been duly executed and delivered on
behalf of the Foreign Subsidiary Borrower.
5. The execution and delivery of the Credit Agreement by the Foreign
Subsidiary Borrower, the performance of its obligations thereunder, the
consummation of the transactions contemplated thereby, the compliance by the
Foreign Subsidiary Borrower with any of the provisions thereof, the borrowings
under the Credit Agreement and the use of proceeds thereof, all as provided
therein, (a) will not violate, or constitute a default under, any Requirement of
Law applicable to the Foreign Subsidiary Borrower and (b) will not result in, or
require, the creation or imposition of any Lien on any of its properties or
revenues pursuant to any such Requirement of Law.
6. There are no taxes imposed by the Jurisdiction (a) on or by
virtue of the execution, delivery, enforcement or performance of the Credit
Agreement or (b) on any payment to be made by the Foreign Subsidiary Borrower
pursuant to the Credit Agreement other than any Non-Excluded Taxes payable by
the Foreign Subsidiary Borrower as provided in subsection 6.12 of the Credit
Agreement.
7. To ensure the legality, validity, enforceability or admissibility
in evidence of the Credit Agreement, it is not necessary that the Credit
Agreement or any other Loan Documents or any other document be filed, registered
or recorded with, or executed or
2
notarized before, any court of other authority of the Jurisdiction or that any
registration charge or stamp or similar tax be paid on or in respect of the
Credit Agreement.
8. The Credit Agreement is in proper legal form under the laws of
the Jurisdiction for the enforcement thereof against the Foreign Subsidiary
Borrower under the laws of the Jurisdiction.
9. In any action or proceeding arising out of or relating to the
Credit Agreement in any court in the Jurisdiction, such court would recognize
and give effect to the choice of law provisions in the Credit Agreement wherein
the parties thereto agree that the Credit Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York.
10. It is not necessary under the laws of the Jurisdiction (a) in
order to enable the Administrative Agents and the Lenders or any of them to
enforce their respective rights under the Credit Agreement or (b) by reason of
the execution of the Credit Agreement [or the Joinder Agreement to which the
Foreign Subsidiary Borrower is a party] or the performance of the Credit
Agreement that any of them should be licensed, qualified or entitled to carry on
business in the Jurisdiction.
11. Neither either of the Administrative Agents nor any of the
Lenders will be deemed to be resident, domiciled, carrying on business or
subject to taxation in the Jurisdiction merely by reason of the execution of the
Credit Agreement [or the Joinder Agreement to which the Foreign Subsidiary
Borrower is a party] or the performance or enforcement of any thereof. The
performance by the Administrative Agents and the Lenders or any of them of any
action required or permitted under the Credit Agreement will not violate any law
or regulation, or be contrary to the public policy, of the Jurisdiction.
12. If any judgment of a competent court outside the Jurisdiction
were rendered against the Foreign Subsidiary Borrower in connection with any
action arising out of or relating to the Credit Agreement, such judgment would
be recognized and could be sued upon in the courts of the Jurisdiction, and such
courts would grant a judgment which would be enforceable against the Foreign
Subsidiary Borrower in the Jurisdiction without any retrial unless it is shown
that (a) the foreign court did not have jurisdiction in accordance with its
jurisdictional rules, (b) the party against whom the judgment of such foreign
court was obtained had no notice of the proceedings or (iii) the judgment of
such foreign court was obtained through collusion or fraud or was based upon
clear mistake of fact or law.
EXHIBIT H
FORM OF
BORROWING CERTIFICATE
Pursuant to subsection 8.1(b) of the Credit and Guarantee Agreement,
dated as of February __, 1997 (as the same may be amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among Anacomp,
Inc., an Indiana corporation (the "COMPANY"), the Foreign Subsidiary Borrowers,
the several banks and other financial institutions from time to time parties
thereto (the "LENDERS"), The First National Bank of Chicago, as administrative
agent for the Lenders and Xxxxxx Commercial Paper Inc., as Arranger and
Syndication Agent, the undersigned, ____________________ of the Company, hereby
certifies as follows:
1. The representations and warranties of the Company set forth in the
Credit Agreement and each of the other Loan Documents to which it is a
party or which are contained in any certificate, document or financial or
other statement furnished pursuant to or in connection with the Credit
Agreement or any Loan Document are true and correct in all material
respects on and as of the date hereof with the same effect as if made on
the date hereof, except for representations and warranties expressly stated
to relate to a specific earlier date, in which case such representations
and warranties are true and correct in all material respects as of such
earlier date;
2. No Default or Event of Default has occurred and is continuing as
of the date hereof or will occur after giving effect to the making of the
Loans and the issuance of the Letters of Credit requested to be made and/or
issued on the date hereof or the consummation of each of the transactions
contemplated by the Loan Documents; and
3. _________________ is and at all times since _____________ __,
199_, has been the duly elected and qualified [Assistant] Secretary of the
Company and the signature set forth on the signature line for such officer
below is such officer's true and genuine signature;
and the undersigned [Assistant] Secretary of the Company hereby certifies as
follows:
4. There are no liquidation or dissolution proceedings pending or to
my knowledge threatened against the Company or any of its Subsidiaries, nor
has any other event occurred affecting or threatening the corporate
existence of the Company or any of its Subsidiaries;
5. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of Indiana;
2
6. (a) Attached hereto as EXHIBIT A is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Company on
__________ __, 1997; such resolutions have not in any way been amended,
modified, revoked or rescinded and have been in full force and effect since
their adoption to and including the date hereof and are now in full force
and effect; such resolutions are the only corporate proceedings of the
Company now in force relating to or affecting the matters referred to
therein;
(b) attached hereto as EXHIBIT B is a true and complete copy of
the By-laws of the Company as in effect at all times since __________ __,
199_, to and including the date hereof; and
(c) attached hereto as EXHIBIT C is a true and complete copy of
the Certificate of Incorporation of the Company as in effect at all times
since __________ __, ____, to and including the date hereof; and
7. The following persons are now duly elected and qualified officers
of the Company, holding the offices indicated next to their respective
names below, and such officers have held such offices with the Company at
all times since __________ __, 199_, to and including the date hereof, and
the signatures appearing opposite their respective names below are the true
and genuine signatures of such officers, and each of such officers is duly
authorized to execute and deliver on behalf of the Company, the Credit
Agreement and the other Loan Documents to which it is a party and any
certificate or other document to be delivered by the Company pursuant to
the Credit Agreement or any such Loan Document:
Name Office Signature
---- ------ ---------
[ ] [ ] _______________
[ ] [ ] _______________
Unless otherwise defined herein, capitalized terms which are defined
in the Credit Agreement and used herein are so used as so defined.
3
IN WITNESS WHEREOF, the undersigned have hereunto set our names and
affixed the corporate seal.
ANACOMP, INC. ANACOMP, INC.
By:___________________________ By:____________________________
Name: Name:
Title: [Vice] President Title: [Assistant] Secretary
Date: February __, 1997 (CORPORATE SEAL)
EXHIBIT I
FORM OF TAX CERTIFICATE
Reference is hereby made to the Credit and Guarantee Agreement, dated
as of February __, 199__, among ANACOMP, INC, the Foreign Subsidiary Borrowers
(as defined therein), the lenders parties thereto, The First National Bank of
Chicago, as administrative agent and Xxxxxx Commercial Paper Inc., as arranger
and syndication agent (as amended, restated, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT"). Pursuant to the provisions of
Section 4.11(b)(i)(B) of the Credit Agreement, the undersigned hereby certifies
that it is not a "bank" as such term is defined in Section 881(c)(3)(A) of the
Internal Revenue Code of 1986, as amended.
[NAME OF LENDER]
By:___________________
Title:
Date: _________, 19___
EXHIBIT J-1
FORM OF NOTICE OF BORROWING
(for Multicurrency Loans)
The First National Bank of Chicago
as Agent for the Revolving Credit Lenders party
to the Credit Agreement referred to below
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: _______________________
[Date]
Re: ANACOMP, INC.
Ladies and Gentlemen:
The undersigned, Anacomp, Inc., refers to that certain Credit and
Guarantee Agreement, dated as of February __, 1997, among the undersigned, the
other Borrowers party thereto, the Revolving Credit Lenders party thereto and
The First National Bank of Chicago, as Administrative Agent (as it may be
amended or otherwise modified from time to time, the "Credit Agreement") and
hereby gives you notice, irrevocably pursuant to Section 4.2(a) of the Credit
Agreement, that the undersigned hereby requests a Multicurrency Loan under the
Credit Agreement, and in that connection sets forth below the information
relating to such Multicurrency Loan (the "Proposed Multicurrency Loan") as
required by Section 4.2(a) of the Credit Agreement:
(i) The Borrower making the Proposed Multicurrency Loan is
___________________.
(ii) The Business Day of the Proposed Multicurrency Loan is
_________, 19__.
(iii) The aggregate amount of the Proposed Multicurrency Loan is
________________.
(iv) The Available Foreign Currency of the Proposed Multicurrency
Loan is _______________.
(v) The initial Interest Period for such Multicurrency Loan shall
be ____________ months.
Capitalized terms not defined in this Notice of Borrowing but defined
in the Credit Agreement are being used herein as therein defined.
Very truly yours,
ANACOMP, INC.
By:________________________
Name:
Title:
EXHIBIT J-2
FORM OF NOTICE OF CONTINUATION
(for Multicurrency Loans)
The First National Bank of Chicago
as Agent for the Revolving Credit Lenders party
to the Credit Agreement referred to below
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: _________________________
[Date]
Re: ANACOMP, INC.
Ladies and Gentlemen:
The undersigned, Anacomp, Inc., refers to that certain Credit and
Guarantee Agreement, dated as of February __, 1997, among the undersigned, the
other Borrowers party thereto, the Revolving Credit Lenders party thereto and
The First National Bank of Chicago, as Administrative Agent (as it may be
amended or otherwise modified from time to time, the "Credit Agreement") and
hereby gives you notice pursuant to Section 4.2(d) of the Credit Agreement that
the undersigned hereby requests a continuation on _____________ __, 19__ of
_____________________ in principal amount of presently outstanding Multicurrency
Loans having an Interest Period ending on __________ __, 19__. The Interest
Period for such amount requested to be continued is [1] [2] [3] [6] months.
In connection herewith, the undersigned hereby certifies that no
Default or Event or Default is continuing on the date hereof.
Capitalized terms not defined herein but defined in the Credit
Agreement are being used herein as therein defined.
Very truly yours,
ANACOMP, INC.
By:___________________________
Name:
Title:
