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SECOND
AMENDED AND RESTATED
CREDIT AGREEMENT
Among
LUMEN TECHNOLOGIES, INC.,
(formerly known as "BEC Group, Inc.")
as Borrower,
and
NATIONSBANK, NATIONAL ASSOCIATION,
BANKBOSTON, N.A.
CREDIT AGRICOLE INDOSUEZ,
EUROPEAN AMERICAN BANK,
IMPERIAL BANK
NATIONAL CITY BANK OF KENTUCKY,
and
THE OTHER FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO,
as Lenders,
and
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
Dated as of March 12, 1998
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TABLE OF CONTENTS
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ARTICLE I - DEFINITIONS
SECTION 1.1 Amendment and Restatement................................. 2
SECTION 1.2 Definitions............................................... 3
SECTION 1.3 Rules of Interpretation................................... 30
ARTICLE II - The Term Loan
SECTION 2.1 Term Loan................................................. 31
SECTION 2.2 Payment of Principal...................................... 31
SECTION 2.3 Payment of Interest....................................... 32
SECTION 2.4 Manner of Payment......................................... 33
SECTION 2.5 Optional Prepayments...................................... 33
SECTION 2.6 Mandatory Prepayments and Commitment Reductions. ........ 34
SECTION 2.7 Borrower's Account........................................ 35
SECTION 2.8 Term Notes................................................ 35
SECTION 2.9 Interest Periods.......................................... 35
SECTION 2.10 Conversions and Elections of Subsequent Interest Periods.. 35
SECTION 2.11 Pro Rata Payments......................................... 36
SECTION 2.12 Use of Proceeds........................................... 36
ARTICLE III - REVOLVING LOANS
SECTION 3.1 Revolving Loans........................................... 36
SECTION 3.2 Advances and Rate Selection............................... 37
SECTION 3.3 Payment of Interest....................................... 39
SECTION 3.4 Payment of Principal...................................... 39
SECTION 3.5 Manner of Payment......................................... 40
SECTION 3.6 Optional Prepayments and Commitment Reductions............ 40
SECTION 3.7 Increase and Decrease in Amounts.......................... 41
SECTION 3.8 Borrower's Account........................................ 41
SECTION 3.9 Revolving Notes........................................... 41
SECTION 3.10 Pro Rata Payments......................................... 41
SECTION 3.11 Conversions and Elections of Subsequent Interest Periods.. 42
SECTION 3.12 Unused Fee................................................ 42
SECTION 3.13 Additional Fees........................................... 43
SECTION 3.14 Deficiency Advances....................................... 43
SECTION 3.15 Use of Proceeds........................................... 43
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ARTICLE IV - LETTERS OF CREDIT
SECTION 4.1 Letters of Credit......................................... 43
SECTION 4.2 Reimbursement............................................. 44
SECTION 4.3 Letter of Credit Fee...................................... 47
SECTION 4.4 Administrative Fees....................................... 47
ARTICLE V - CHANGE IN CIRCUMSTANCES
SECTION 5.1 Increased Cost and Reduced Return......................... 47
SECTION 5.2 Limitation on Types of Loans.............................. 49
SECTION 5.3 Illegality................................................ 49
SECTION 5.4 Treatment of Affected Loans............................... 49
SECTION 5.5 Compensation.............................................. 50
SECTION 5.6 Taxes..................................................... 50
ARTICLE VI - SECURITY
SECTION 6.1 Security Interest......................................... 52
SECTION 6.2 Stock Pledge. ........................................... 52
SECTION 6.3 Guaranty.................................................. 53
SECTION 6.4 Deed of Trust............................................. 53
SECTION 6.5 Intellectual Property..................................... 54
SECTION 6.7 Further Assurances........................................ 54
ARTICLE VII - CONDITIONS PRECEDENT
SECTION 7.1 Effectiveness; Conditions to Advances and
Issuance of Letters of Credit............................. 55
SECTION 7.2 Conditions of All Advances and Issuances of Letters
of Credit after the Closing Date.......................... 60
ARTICLE VIII - REPRESENTATIONS AND WARRANTIES
SECTION 8.1 Organization and Authority................................ 62
SECTION 8.2 Loan Documents............................................ 63
SECTION 8.3 Solvency.................................................. 63
SECTION 8.4 Subsidiaries and Stockholders............................. 64
SECTION 8.5 Ownership Interests....................................... 64
SECTION 8.6 Financial Condition....................................... 64
SECTION 8.7 Title to Properties....................................... 65
SECTION 8.8 Taxes..................................................... 65
SECTION 8.9 Other Agreements.......................................... 65
SECTION 8.10 Litigation................................................ 65
SECTION 8.11 Margin Stock.............................................. 65
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SECTION 8.12 Investment Company........................................ 66
SECTION 8.13 Intellectual Property..................................... 66
SECTION 8.14 No Untrue Statement....................................... 66
SECTION 8.15 No Consents, Etc.......................................... 66
SECTION 8.16 Employee Benefit Plans.................................... 67
SECTION 8.17 No Default................................................ 68
SECTION 8.18 Environmental Matters..................................... 68
SECTION 8.19 Employment Matters........................................ 68
SECTION 8.20 Merger Documents.......................................... 68
ARTICLE IX - AFFIRMATIVE COVENANTS
SECTION 9.1 Financial Reports, Etc.................................... 68
SECTION 9.2 Maintain Properties....................................... 70
SECTION 9.3 Existence, Qualification, Etc............................. 70
SECTION 9.4 Regulations and Taxes..................................... 70
SECTION 9.5 Insurance................................................. 71
SECTION 9.6 True Books................................................ 71
SECTION 9.7 Right of Inspection....................................... 71
SECTION 9.8 Observe all Laws.......................................... 71
SECTION 9.9 Covenants Extending to Subsidiaries....................... 71
SECTION 9.10 Officer's Knowledge of Default............................ 72
SECTION 9.11 Suits or Other Proceedings................................ 72
SECTION 9.12 Notice of Discharge of Hazardous Material or
Environmental Complaint................................... 72
SECTION 9.13 Environmental Compliance.................................. 72
SECTION 9.14 Indemnification........................................... 72
SECTION 9.15 Further Assurances........................................ 73
SECTION 9.16 Employee Benefit Plans.................................... 73
SECTION 9.17 Termination Events........................................ 73
SECTION 9.18 ERISA Notices............................................. 73
SECTION 9.19 Continued Operations...................................... 74
SECTION 9.20 Use of Proceeds........................................... 74
SECTION 9.21 New Subsidiaries.......................................... 74
SECTION 9.22 Hedging Obligations....................................... 75
SECTION 9.23 Reciprocal Easement Agreement............................. 75
ARTICLE X - NEGATIVE COVENANTS
SECTION 10.1 Indebtedness.............................................. 76
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SECTION 10.2 Liens..................................................... 77
SECTION 10.3 Investments; Acquisitions................................. 78
SECTION 10.4 Merger or Transfer of Assets.............................. 79
SECTION 10.5 Transactions with Affiliates.............................. 79
SECTION 10.6 Compliance with ERISA..................................... 80
SECTION 10.7 Fiscal Year............................................... 80
SECTION 10.8 Dissolution, etc.......................................... 80
SECTION 10.9 Hedging Obligations....................................... 81
SECTION 10.10 Dividends, Redemptions and Other Payments................. 81
SECTION 10.11 Defaults Under Other Agreements........................... 81
SECTION 10.12 Compensation; Reimbursement of Expenses................... 81
SECTION 10.13 Change in Accountants..................................... 81
SECTION 10.14 Limitations on Sales and Leasebacks....................... 82
SECTION 10.15 Negative Pledge Clauses................................... 82
SECTION 10.16 Change of Control......................................... 82
SECTION 10.17 Intellectual Property..................................... 82
SECTION 10.18 Licenses.................................................. 82
ARTICLE XI - FINANCIAL COVENANTS
SECTION 11.1 Minimum Consolidated Fixed Charge Ratio................... 83
SECTION 11.2 Consolidated Leverage Ratio............................... 83
SECTION 11.3 Consolidated Net Worth.................................... 83
ARTICLE XII - EVENTS OF DEFAULT
SECTION 12.1 Events of Default......................................... 83
SECTION 12.2 Agent to Act.............................................. 86
SECTION 12.3 Cumulative Rights......................................... 87
SECTION 12.4 No Waiver................................................. 87
SECTION 12.5 Allocation of Proceeds.................................... 87
ARTICLE XIII - THE AGENT
SECTION 13.1 Appointment, Powers, and Immunities....................... 88
SECTION 13.2 Reliance by Agent......................................... 88
SECTION 13.3 Defaults.................................................. 89
SECTION 13.4 Rights as Lender.......................................... 89
SECTION 13.5 Indemnification........................................... 89
SECTION 13.6 Non-Reliance on Agent and Other Lenders................... 90
SECTION 13.7 Resignation of Agent...................................... 90
SECTION 13.8 Sharing of Payments, etc.................................. 90
SECTION 13.9 Fees...................................................... 91
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ARTICLE XIV - ASSIGNMENTS AND PARTICIPATIONS
SECTION 14.1 Assignments and Participations........................... 91
ARTICLE XV - GENERAL PROVISIONS
SECTION 15.1 Notices................................................... 93
SECTION 15.2 Setoff.................................................... 94
SECTION 15.3 Survival.................................................. 94
SECTION 15.4 Expenses.................................................. 94
SECTION 15.5 Amendments................................................ 95
SECTION 15.6 Counterparts.............................................. 95
SECTION 15.7 Termination............................................... 96
SECTION 15.8 Indemnification........................................... 96
SECTION 15.9 Headings and References................................... 97
SECTION 15.10 Severability.............................................. 97
SECTION 15.11 Entire Agreement.......................................... 97
SECTION 15.12 Agreement Controls........................................ 97
SECTION 15.13 Usury Savings Clause...................................... 97
SECTION 15.14 Governing Law; Waivers.................................... 98
EXHIBIT A Applicable Commitment Percentages......................... A-1
EXHIBIT B Form of Assignment and Acceptance......................... B-1
EXHIBIT C Form of Notice of Appointment (or Revocation)of
Authorized Representative................................. C-1
EXHIBIT D Form of Borrowing Notice.................................. D-1
EXHIBIT E Form of Guaranty Agreement................................ E-1
EXHIBIT F Form of Interest Rate Selection Notice.................... F-1
EXHIBIT G Form of Stock Pledge Agreement............................ G-1
EXHIBIT H Form of Mortgage.......................................... H-1
EXHIBIT I Form of Term Note.........................................I-1-1
EXHIBIT J Form of Revolving Note.................................... J-1
EXHIBIT K-1 Form of LC Account Agreement..............................K-1-1
EXHIBIT K-2 Form of Cash Collateral Account...........................K-2-1
EXHIBIT L Form of Security Agreement................................ L-1
EXHIBIT M Form of Intellectual Property Security Agreement.......... M-1
EXHIBIT N Forms of Opinions of Counsel to the Borrower and the
Guarantors..........................N-1
EXHIBIT O Form of Compliance Certificate............................ O-1
EXHIBIT P Form of Landlord Waiver................................... P-1
EXHIBIT Q Form of Collateral Assignment of License Agreement........ R-1
EXHIBIT R Form of Intercompany Note................................. T-1
EXHIBIT S Form of Subordination Agreement........................... U-1
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Schedule 1 Material Leased Facilities................................
Schedule 2 Existing Letters of Credit................................
Schedule 7.1(c) Material Adverse Affect...................................
Schedule 8.4 Subsidiaries and Investments..............................
Schedule 8.5 Ownership Interests.......................................
Schedule 8.6 Contingent Liabilities....................................
Schedule 8.7 Liens.....................................................
Schedule 8.10 Litigation................................................
Schedule 8.13 Intellectual Property.....................................
Schedule 8.16 Employee Benefit Plans....................................
Schedule 8.18 Environmental Matters.....................................
Schedule 8.19 Employment Matters........................................
Schedule 9.5 Insurance.................................................
Schedule 10.1 Existing Indebtedness.....................................
Schedule 10.5 Transactions with Affiliates..............................
Schedule 10.18 Licenses..................................................
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SECOND
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement")
made as of this 12th day of March, 1998 by and among LUMEN TECHNOLOGIES, INC.,
a Delaware corporation formerly known as BEC Group, Inc. and having its chief
executive office in Rye, New York (the "Borrower"), EACH LENDER EXECUTING AND
DELIVERING A SIGNATURE PAGE HERETO and each other lender which may hereafter
execute and deliver an instrument of assignment and assumption with respect to
this Agreement pursuant to Section 14.1 hereof (hereinafter such lenders may be
referred to individually as a "Lender" or collectively as the "Lenders") and
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association organized and
existing under the laws of the United States of America ("NationsBank"), in its
capacity as agent for the Lenders (in such capacity, and any successor
appointed in accordance with the terms of Section 13.7 hereof, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agent are parties to that
certain Amended and Restated Credit Agreement dated as of July 10, 1997, as
amended pursuant to that certain Assignment Agreement and First Amendment to
Amended and Restated Credit Agreement (the "Assignment and Amendment") dated of
even date herewith and effective immediately prior hereto (as so amended, the
"Existing Credit Agreement"), and the other Loan Documents (as defined in the
Existing Credit Agreement); and
WHEREAS, in connection with the Existing Credit Agreement, Bolle Inc.
("Bolle"), certain other subsidiaries of the Borrower and the Agent entered
into that certain Amended and Restated Guaranty Agreement dated as of July 10,
1997 pursuant to which Bolle guaranteed the payment and performance of the
Borrower's obligations under the Existing Credit Agreement; and
WHEREAS, pursuant to the Assignment and Amendment the Borrower
assigned to Bolle, and Bolle assumed from the Borrower, among other
liabilities, certain indebtedness owing by, and obligations of, the Borrower
under the Existing Credit Agreement such that Bolle became a co-borrower
together with the Borrower under the Existing Credit Agreement; and
WHEREAS, pursuant to the Assignment and Amendment, certain lenders
(the "Bolle Lenders") have purchased from certain other lenders party to the
Existing Credit Agreement (the "BEC Lenders") a portion of the rights and
interests of the BEC Lenders under the Existing Credit Agreement with respect
to the obligations and indebtedness thereunder of Bolle as a result of, and
after giving effect to, the Assignment and Amendment (the "Bolle Obligations");
and
WHEREAS, Bolle, the Bolle Lenders and the Agent are simultaneously
herewith entering into a Second Amended and Restated Credit Agreement (the
"Bolle Credit Agreement") in order to amend and restate that portion of the
Existing Credit Agreement which in any manner governs or evidences the Bolle
Obligations, the rights and interests of the Bolle Lenders and any terms,
conditions or matters related to any thereof as a separate and independent
agreement among the Agent, the Bolle Lenders and Bolle without regard to the
Borrower hereunder; and
WHEREAS, BILC Acquisition Corp., a wholly-owned Subsidiary of the
Borrower, has merged with ILC Technology, Inc., a California corporation, on
the date hereof immediately prior to the effectiveness of this Agreement
pursuant to that certain Agreement and Plan of Merger dated as of October 30,
1997, in connection with which BILC Acquisition Corp. was the surviving
corporation and changed its name to ILC Technology, Inc.;
WHEREAS, the Borrower, the Lenders and the Agent desire to enter into
this Agreement in order to amend and restate the remaining portion of the
Existing Credit Agreement not governing or evidencing the Bolle Obligations and
continue to make available to the Borrower hereunder credit facilities in the
maximum aggregate principal amount at any time outstanding of $70,000,000,
which shall include a Term Loan Facility in the principal amount of
$30,000,000, and a Revolving Credit Facility in the maximum aggregate principal
amount at any time outstanding of $40,000,000, including a letter of credit
subfacility of up to $5,000,000 (the "Facilities");
WHEREAS, the Lenders are willing to make all such facilities available
to the Borrower and amend and restate the remaining portion of the Existing
Credit Agreement not governing or evidencing the Bolle Obligations upon the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the terms, covenants, provisions
and conditions hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 AMENDMENT AND RESTATEMENT. The Borrower, the Agent and the
Lenders hereby agree that upon the effectiveness of this Agreement, the terms
and provisions of the Existing Credit Agreement, other than those relating to
the Bolle Obligations or otherwise amended and restated pursuant to the Bolle
Credit Agreement, shall be and hereby are amended and restated in their
entirety by the terms and provisions of this Agreement and such terms and
provisions of the Existing Credit Agreement shall be superseded by this
Agreement, except as expressly provided herein.
Notwithstanding the amendment and restatement of the Existing Credit
Agreement as described above by this Agreement, the Borrower shall continue to
be liable to the Agent and each Lender with respect to its agreements under the
Existing Credit Agreement to indemnify and hold harmless the Agent and each
Lender from and against all claims, demands, liabilities, damages, losses,
costs, charges and expenses to which the Agent or any Lender may be subject
arising in connection with the Existing Credit Agreement in accordance with the
terms thereof. Notwithstanding the amendment and restatement of the Existing
Credit Agreement by this Agreement, all of the indebtedness, liabilities and
obligations owing by the Borrower under the Existing Credit Agreement after
giving effect to the Assignment and Amendment (hereinafter in this Agreement
all references to the Existing Credit Agreement shall mean the Existing Credit
Agreement as amended by the
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Assignment and Amendment) shall continue to be secured as referred to in
Section 4(a) of the Assignment and Amendment and Borrower acknowledges and
agrees that its assets (other than the shares of Bolle) not transferred in
connection with the assignment to Bolle pursuant to the Xxxx of Sale which
constitute "Collateral" as defined in the Existing Credit Agreement remain
subject to a security interest in favor of the Agent for the ratable benefit of
the Lenders and to secure the liabilities of Borrower re-evidenced by this
Agreement and the other Loan Documents. This Agreement is given as a
substitution of, and not as a payment of, the obligations of Borrower under the
Existing Credit Agreement and is not intended to constitute a novation of the
Existing Credit Agreement. Upon the effectiveness of this Agreement, all
amounts owing by the Borrower and outstanding under the Existing Credit
Agreement after giving effect to the Assignment and Amendment shall constitute
Advances under the Revolving Credit Facility hereunder, in each case accruing
interest (a) with respect to Eurodollar Rate Loans under the Existing Credit
Agreement, at the Eurodollar Rate hereunder and (b) with respect to Base Rate
Loans under the Existing Credit Agreement, at the Base Rate hereunder. The
parties hereto agree that all Eurodollar Rate Loans outstanding under the
Existing Credit Agreement on the Closing Date after giving effect to the
Assignment and Amendment shall continue as Eurodollar Rate Loans hereunder
without the requirement that any compensation be paid to the Lenders pursuant
to Section 5.5 hereof. The parties hereto further agree that all Letters of
Credit issued under the Existing Credit Agreement, as described on Schedule 2
hereto, and outstanding on the Closing Date for which the Borrower has incurred
a reimbursement obligation under the Existing Credit Agreement which has not
been assumed by Bolle pursuant to the Assignment and Amendment shall continue
as Letters of Credit hereunder and shall constitute Letter of Credit
Outstandings hereunder.
Notwithstanding any other amendment and restatement of the Security
Instruments under the Existing Credit Agreement, the parties hereto agree that
each of the Security Instruments delivered in connection with the Existing
Credit Agreement are hereby amended so that each reference to the "Credit
Agreement" or the Loan Documents (as defined in the Existing Credit Agreement)
shall mean this Credit Agreement and the Loan Documents as defined hereunder.
SECTION 1.2 DEFINITIONS. For the purposes of this Agreement, in
addition to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"AAi Preferred Stock" means 100 shares of Series A Redeemable
Non-Voting Preferred Stock, par value $1.00 per share, of Xxxxxx Xxxxx
Holdings, Inc. owned by Bolle and any shares of capital stock into
which such stock may be converted;
"AAi Payment" means the cash payment or payments by Bolle of
up to $2,500,000 to the Borrower in connection with the Xxxx of Sale
and the AAi Preferred Stock;
"Acquisition" means the acquisition (i) of a controlling
equity interest in another Person (including the purchase of an
option, warrant or convertible or similar type security to acquire
such a controlling interest at the time it becomes exercisable by the
holder thereof), whether by purchase of such equity interest or upon
exercise of an option or warrant for, or conversion of securities
into, such equity interest, or (ii) in a single or series of related
transactions, of assets of another Person for which the Cost of
Acquisition equals or exceeds five percent (5%) of Consolidated Total
Assets determined as of the last day of the fiscal
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quarter of the Borrower immediately preceding the date of the
agreement related to such Acquisition;
"Advance" means (a) the advance of the Term Loan and (b) any
borrowing under the Revolving Credit Facility consisting of a Base
Rate Revolving Loan or a Eurodollar Rate Revolving Loan, as the case
may be;
"Affiliate" means a Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or
is under common control with, the Borrower; (ii) which beneficially
owns or holds 10% or more of any class of the outstanding voting stock
of the Borrower; or (iii) 10% or more of any class of the outstanding
voting stock (or in the case of a Person which is not a corporation,
10% or more of the equity interest) of which is beneficially owned or
held by the Borrower. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction
of the management and policies of such Person, whether through
ownership of voting stock, by contract or otherwise;
"Applicable Commitment Percentage" means, at any time for
each Lender with respect to the Total Credit Commitment (including its
Participations and its obligations hereunder to Issuing Bank to
acquire Participations), a fraction (expressed as a percentage), (A)
the numerator of which shall be the sum of such Lender's Revolving
Credit Commitment and Term Loan Commitment at such date of
determination (which as of the Closing Date are set forth on Exhibit A
attached hereto and incorporated herein by reference), and (B) the
denominator of which shall be the Total Credit Commitment at such date
of determination; provided that the Applicable Commitment Percentage
of each Lender shall be increased or decreased to reflect any
assignments to or by such Lender effected in accordance with Section
14.1 hereof;
"Applicable Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an
affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or an
affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrower by written notice in accordance with the
terms hereof as the office by which its Loans of such Type are to be
made and maintained;
"Applicable Margin," and "Applicable Unused Fee" means that
percent per annum set forth in the table below, which shall be (A)
determined as of each Determination Date based upon the computations
set forth in the compliance certificates delivered to the Agent
pursuant to Section 9.1(a)(ii) hereof, subject to review and approval
of such computations by the Agent, and delivered to the Agent not
later than the time set forth in Sections 9.1(a) and 9.1(b) hereof
(the "Compliance Date") and (B) applicable to all Loans made, renewed
or converted, Letters of Credit outstanding and any Unused Fee due and
payable, on or after the most recent Compliance Date to occur based
upon the Consolidated Leverage Ratio for the Four-Quarter-Period then
ended, as specified below:
4
Applicable Margin for
Eurodollar Rate
Loans and for Letter Applicable Margin Applicable
Consolidated of Credit for Base Unused
Leverage Ratio Fees Rate Loans Fee
-------------- --------------------- ----------------- ----------
Greater than 3.00 to 1.00 1.75% .250% .375%
Less than or equal to 3.00 to
1.00 but greater than 2.50 to
1.00 1.375% 0% .300%
Less than or equal to 2.50 to
1.00 but greater than 2.00 to
1.00 1.125% 0% .25%
Less than or equal to 2.00 to
1.00 .875% 0% .225%
; provided, however, the Consolidated Leverage Ratio shall be deemed
to be 2.75 to 1.00 for the purposes of calculating the Applicable
Margin and Applicable Unused Fee hereunder from the Closing Date to
the Compliance Date immediately following March 31, 1998.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit
executed by the Borrower from time to time and delivered to Issuing
Bank to support the issuance of Letters of Credit;
"Asset Disposition" means any voluntary disposition, whether
by sale, lease or transfer, other than as permitted under Section 10.4
hereof, of (a) any or all of the assets, excluding cash and cash
equivalents, of the Borrower or its Subsidiaries, and (b) any of the
capital stock, or securities or investments exchangeable, exercisable
or convertible for or into, or otherwise entitling the holder to
receive any of the capital stock, of any Subsidiary (other than a
disposition to a Guarantor);
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B attached hereto and incorporated
herein by reference (with blanks appropriately filled in) delivered to
the Agent in connection with an assignment of a Lender's interest
under this Agreement pursuant to Section 14.1;
"Assignment and Amendment" has the meaning given to such term
in the recitals hereto;
"Authorized Representative" means any of the Chairman,
President, Chief Executive Officer, Executive Vice Presidents, Senior
Vice Presidents or Vice Presidents of the
5
Borrower and, with respect to financial matters, the Chief Financial
Officer, Vice President-Finance or Controller of the Borrower or any
other person expressly designated by the Board of Directors of the
Borrower (or the appropriate committee thereof) as an Authorized
Representative of the Borrower, as set forth from time to time in a
certificate in the form attached hereto as Exhibit C and incorporated
herein by reference;
"Azusa Property" means that certain real property of ORC and
all improvements thereon located in Azusa, California;
"Base Rate" means the per annum rate of interest equal to the
sum of (a) the greater of (i) the Prime Rate or (ii) the Federal Funds
Rate plus one-half of one percent (0.5%) plus (b) the Applicable
Margin. Any change in the Base Rate due to a change in the Prime Rate
or the Federal Funds Rate shall be effective on the effective date of
such change in the Prime Rate or Federal Funds Rate;
"Base Rate Loan" means any Base Rate Revolving Loan and any
Base Rate Segment;
"Base Rate Revolving Loan" means any Revolving Loan for which
the rate of interest is determined by reference to the Base Rate;
"Base Rate Segment" means any Segment of the Term Loan for
which the rate of interest is determined by reference to the Base
Rate;
"Xxxx of Sale" means that certain Xxxx of Sale and Assignment
Agreement between the Borrower and BEC dated as of March 11, 1998 and
substantially in the Form attached to the Merger Agreement;
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body);
"Bolle" means Bolle Inc., a Delaware corporation;
"Bolle Credit Agreement" has the meaning given to such term
in Section 1.1 hereof;
"Bolle Obligations" has the meaning given to such term in
Section 1.1 hereof;
"Borrower's Account" means demand deposit account number
1295027966 with the Agent, or any successor account with the Agent,
which may be maintained at one or more offices of the Agent or an
agent of the Agent;
"Borrowing Notice" means the notice delivered by an
Authorized Representative in connection with the Advance of the Term
Loan or an Advance under the Revolving Credit Facility, in the form
attached hereto as Exhibit D and incorporated herein by reference;
6
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
State of New York or State of North Carolina are authorized or
obligated by law, executive order or governmental decree to be closed,
and (ii) with respect to any Eurodollar Rate Loan, any day which is a
Business Day, as described in clause (i) above, and on which the
relevant international financial markets are open for the transaction
of business contemplated by this Agreement in London, England, Xxx
Xxxx, Xxx Xxxx xxx Xxxxxxxxx, Xxxxx Xxxxxxxx;
"Capital Expenditures" means, with respect to the Borrower
and its Subsidiaries, for any period the sum of (without duplication)
(i) all expenditures (whether paid in cash or accrued as liabilities)
by the Borrower or any Subsidiary during such period for items that
would be classified as "property, plant or equipment" or comparable
items on the consolidated balance sheet of the Borrower and its
Subsidiaries, including without limitation all transactional costs
incurred in connection with such expenditures provided the same have
been capitalized, excluding, however, the amount of any Capital
Expenditures paid for with proceeds of casualty insurance as permitted
under the Loan Documents as evidenced in writing and submitted to the
Agent together with any compliance certificate delivered pursuant to
Section 9.1(a) or (b) hereof, and (ii) with respect to any Capital
Lease entered into by the Borrower or its Subsidiaries during such
period, the present value of the lease payments due under such Capital
Lease over the term of such Capital Lease applying a discount rate
equal to the interest rate provided in such lease (or in the absence
of a stated interest rate, that rate used in the preparation of the
financial statements described in Section 9.1(a) hereof), all the
foregoing in accordance with GAAP applied on a Consistent Basis;
"Capital Leases" means all leases which have been or should
be capitalized in accordance with GAAP, including Statement No. 13 of
the Financial Accounting Standards Board and any successor thereof,
applied on a Consistent Basis;
"Cash Collateral Account Agreement" means a Cash Collateral
Account Agreement in the form of Exhibit K-2 between the Borrower and
the Agent;
"Change in Consolidated Working Capital" means, with respect
to any determination thereof as at the end of any Fiscal Year of the
Borrower, the result obtained, expressed as a positive or negative
number as appropriate, by subtracting from Consolidated Working
Capital as at such date the amount of Consolidated Working Capital as
at the end of the immediately preceding Fiscal Year of the Borrower;
"Closing Date" means the date as of which this Agreement is
executed by the Borrower, the Lenders and the Agent and on which the
conditions set forth in Section 7.1 hereof have been satisfied or
waived;
"Code" means the Internal Revenue Code of 1986, as amended,
any successor provision or provisions and any regulations promulgated
thereunder;
"Collateral" means the collateral described in the Security
Instruments;
7
"Collateral Assignment of Stock Purchase Agreement" means
that certain Collateral Assignment of Stock Purchase and Option
Agreement dated as of the Closing Date by the Borrower in favor of the
Agent and acknowledged and consented to by Voltarc and its
shareholders, pursuant to which the Borrower has collaterally assigned
all of its rights and interests under that certain Stock Purchase and
Option Agreement dated as of October 1, 1997 by and among BEC Group,
Inc., ORC Technologies, Inc., Voltarc Technologies, Inc., X.X. Xxxxx,
Xxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxx;
"Commercial Letter of Credit" means an irrevocable
documentary letter of credit issued hereunder for the account of the
Borrower; provided that the expiry date of a Commercial Letter of
Credit shall not be later than six (6) months subsequent to the date
of issuance thereof;
"Common Stock" means the common stock, par value $.01 per
share, of the Borrower;
"Compliance Date" has the meaning assigned to such term in
the definition of "Applicable Margin" in this Section 1.2;
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the
preparation of the audited financial statements of the Borrower
referred to in Section 8.6(a) hereof;
"Consolidated Current Assets" means cash and all other assets
of the Borrower and its Subsidiaries which would be classified as a
current asset as determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis.
"Consolidated Current Liabilities" means all liabilities of
the Borrower and its Subsidiaries which would be classified as a
current liability as determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis.
"Consolidated EBITDA" means, with respect to the Borrower and
its Subsidiaries for any period of computation thereof, the sum of,
without duplication, (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) taxes on income, (iv) amortization and (v)
depreciation, less the sum of (a) the amount of any downward
adjustment in the value of the Borrower's investment in the Sterling
Note during the immediately preceding Fiscal Year resulting from the
evaluation as required by GAAP, (b) up to $4,500,000 in charges
related to the write-down of ILC's investment in PLI and Yumex, and
(c) up to $2,000,000 in charges related to movement of operations to
the Sunnyvale Property and consolidation of inventory in connection
with the Merger, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis;
"Consolidated Fixed Charge Ratio" means, with respect to the
Borrower and its Subsidiaries for the period of computation thereof,
the ratio of (i) Consolidated EBITDA for
8
such period less Capital Expenditures for such period to (ii)
Consolidated Fixed Charges for such period; provided, however that for
each of the first five fiscal quarters ending after the Closing Date,
the Consolidated Fixed Charge Ratio shall be calculated through the
end of and including such fiscal quarter on a pro forma basis giving
effect to the Merger for the entire Four-Quarter Period being
computed.
"Consolidated Fixed Charges" means, with respect to Borrower
and its Subsidiaries for any period of computation thereof, the sum
of, without duplication, (i) Consolidated Interest Expense, during
such period, (ii) the principal amount of Consolidated Funded
Indebtedness (other than the Subordinated Indebtedness) due and
payable during such period, (iii) all cash dividends and other cash
distributions (other than distributions in the form of any stock
(including without limitation capital stock of the Borrower),
security, note or other instrument) paid during such period
(regardless of when declared) on any shares of capital stock of the
Borrower then outstanding, including without limitation its Common
Stock and (iv) all payments under Capital Leases made during such
period, all determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis;
"Consolidated Funded Indebtedness" means, with respect to the
Borrower and its Subsidiaries, at any time as of which the amount
thereof is to be determined, the sum of (i) Indebtedness for Money
Borrowed of the Borrower and its Subsidiaries at such time and (ii)
the face amount of all outstanding letters of credit issued for the
account of the Borrower or any of its Subsidiaries and all obligations
(to the extent not duplicative) arising under such letters of credit,
all determined on a consolidated basis in accordance with GAAP applied
on a Consistent Basis;
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the
Borrower and its Subsidiaries, including without limitation (i) the
current amortized portion of debt discounts to the extent included in
gross interest expense, (ii) the current amortized portion of all fees
(including, without limitation, fees payable in respect of a Swap
Agreement) payable in connection with the incurrence of Indebtedness
to the extent included in gross interest expense and (iii) the portion
of any payments made in connection with Capital Leases allocable to
interest expense, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis;
"Consolidated Leverage Ratio" means, as of the date of
computation thereof, the ratio of (i) Consolidated Funded Indebtedness
(as determined as at such date) minus Subordinated Indebtedness (as
determined as at such date) to (ii) Consolidated EBITDA (for the
Four-Quarter Period ending on (or most recently prior to) such date);
provided, however that for each of the first five fiscal quarters
ending after the Closing Date, the Consolidated Leverage Ratio shall
be calculated through the end of and including such fiscal quarter on
a pro forma basis giving effect to the Merger for the entire
Four-Quarter Period being computed.
"Consolidated Net Income" means, for any period of
computation thereof, the gross revenues from operations of the
Borrower and its Subsidiaries (including payments received by the
Borrower and its Subsidiaries of (i) interest income, and (ii)
dividends and distributions
9
made in the ordinary course of their businesses by Persons in which
investment is permitted pursuant to this Agreement and not related to
an extraordinary event) less all operating and non-operating expenses
(not related to extraordinary events) of the Borrower and its
Subsidiaries including taxes on income, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis; but excluding (for all purposes other than (x) compliance with
Section 11.3 hereof and (y) the computation of Consolidated EBITDA
utilized to determine Excess Cash Flow) in such calculation (1) the
amount of any material net gains on the sale, conversion or other
disposition of capital assets, (2) the amount of any material net
gains on the acquisition, retirement, sale or other disposition of
capital stock and other securities of the Borrower or its
Subsidiaries, (3) the amount of any material net gains on the
collection of proceeds of life insurance policies, (4) any write-up of
any asset, and (5) any other net gain of an extraordinary nature, all
as determined in accordance with GAAP applied on a Consistent Basis
and, for purposes of determining Consolidated EBITDA with respect to
Section 11.2 hereof, including all Consolidated Net Income of any
Control Subsidiary that may be included in such determination pursuant
to Section 1.3(a) hereof;
"Consolidated Net Worth" means at any time as of which the
amount thereof is to be determined, the sum of the following in
respect of the Borrower and its Subsidiaries (determined on a
consolidated basis and excluding intercompany items among the Borrower
and its Subsidiaries and any upward adjustment after the Closing Date
due to revaluation of assets): (i) the amount of issued and
outstanding share capital, plus (ii) the amount of additional paid-in
capital and retained income (or, in the case of a deficit, minus the
amount of such deficit), plus (iii) the amount of any foreign currency
translation adjustment (if positive, or, if negative, minus the amount
of such translation adjustment), minus (iv) the amount of any treasury
stock, all as determined in accordance with GAAP applied on a
Consistent Basis;
"Consolidated Pretax Income" means, for any period of
computation thereof, Consolidated Net Income plus all taxes on income
of the Borrower and its Subsidiaries, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis;
"Consolidated Total Assets" means, as at any time of
calculation thereof, the net book value of all assets of the Borrower
and its Subsidiaries as determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis;
"Consolidated Working Capital" means, as of any date on which
the amount thereof is to be determined, the excess of Consolidated
Current Assets over Consolidated Current Liabilities;
"Contingent Obligation" of any Person means all contingent
liabilities (other than obligations of the Borrower and its
Subsidiaries with respect to the fulfillment of purchase orders issued
in the ordinary course of business) required (or which, upon the
creation or incurring thereof, would be required) to be included in
the consolidated financial statements (including footnotes) of such
Person in accordance with GAAP applied on a Consistent Basis,
including Statement No. 5 of the Financial Accounting Standards Board,
and except with
10
respect to the calculation of Contingent Obligations as required under
the definition of "Solvent," any obligation of such Person
guaranteeing or in effect guaranteeing any Indebtedness, dividend or
other obligation of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including obligations of such
Person however incurred:
(i) to purchase such Indebtedness or other
obligation or any property or assets constituting security
therefor;
(ii) to advance or supply funds in any manner (A)
for the purchase or payment of such Indebtedness or other
obligation, or (B) to maintain a minimum working capital, net
worth or other balance sheet condition or any income
statement condition of the primary obligor;
(iii) to grant or convey any Lien, security
interest, pledge, charge or other encumbrance on any property
or assets of such Person to secure payment of such
Indebtedness or other obligation;
(iv) to lease property or to purchase securities or
other property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(v) otherwise to assure the owner of the
Indebtedness or such obligation of the primary obligor
against loss in respect thereof.
; provided, however, "Contingent Obligation" shall not include any
obligation which might be required to be disclosed as a liability in
the financial statements (or footnotes thereto) of the Borrower
pursuant to Statement No. 123 or 107 of the Financial Accounting
Standards Board. With respect to Contingent Obligations, such
liabilities shall be computed at the amount which, in light of all the
facts and circumstances existing at the time, represent the present
value of the amount which can reasonably be expected to become an
actual or matured liability;
"Continue", "Continuation", and "Continued" shall refer to
the continuation pursuant to Sections 2.11 or 3.11 hereof of a
Eurodollar Rate Loan from one Interest Period to the next Interest
Period.
"Control Subsidiary" means any entity not constituting a
Subsidiary hereunder but which would otherwise be included as a
subsidiary of the Borrower for consolidated financial reporting
purposes in accordance with GAAP;
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 2.11 or 3.11 or Article V of one Type
of Loan into another Type of Loan.
11
"Core Business" means, with respect to the Borrower and its
Subsidiaries, the business of (i) manufacturing and distributing
lighting and related products for industrial, medical and cinematic
uses and specialized photo exposure systems and related products used
in the production of circuit boards, microcircuits, flexible circuits,
flat panel displays and other applications where microchips are used
and (ii) the manufacturing and distribution of electro-formed
products, glass optics and spectral coatings, whether within or
outside of the United States of America;
"Cost of Acquisition" means, with respect to any Acquisition,
as at the date of consummation of any such Acquisition, the sum of the
following (without duplication): (i) the value of the capital stock,
warrants or options to acquire capital stock of the Borrower or any
Subsidiary to be transferred in connection therewith, (ii) any cash or
other property (excluding property described in clause (i)) and the
unpaid principal amount of any debt instrument given as consideration,
(iii) any Indebtedness assumed by the Borrower or its Subsidiaries in
connection with such Acquisition, and (iv) out of pocket transaction
costs for the services and expenses of attorneys, accountants and
other consultants incurred in effecting such a transaction, and other
similar transaction costs so incurred (all such costs being included
as a "Cost of Acquisition" for such transaction). For purposes of
determining the Cost of Acquisition for any transaction, (A) the
capital stock of the Borrower shall be valued (I) at its market value
as reported on the New York Stock Exchange with respect to shares that
are freely tradeable, and (II) with respect to shares that are not
freely tradeable, as determined by the Board of Directors of the
Borrower and, if requested by the Agent, determined to be a reasonable
valuation by the independent public accountants referred to in Section
9.1(a) hereof, (B) the capital stock of any Subsidiary shall be valued
as determined by the Board of Directors of such Subsidiary and, if
requested by the Agent, determined to be a reasonable valuation by the
independent public accountants referred to in Section 9.1(a) hereof,
and (C) with respect to any Acquisition accomplished pursuant to the
exercise of options or warrants or the conversion of securities, the
Cost of Acquisition shall include both the cost of acquiring such
option, warrant or convertible security as well as the cost of
exercise or conversion;
"Deed of Trust" means, collectively (or individually as the
context may indicate), (i) the Deed of Trust, Leasehold Deed of Trust,
Security Agreement, Fixture Financing Statement, Assignment of Leases
and Rents and Financing Statement dated as of July 10, 1997 executed
by ORC in favor of the Agent relating to the Azusa Property, (ii) the
Deed of Trust, Leasehold Deed of Trust, Security Agreement, Fixture
Financing Statement, Assignment of Leases and Rents and Financing
Statement dated as of the Closing Date executed by ILC in favor of the
Agent relating to the Sunnyvale Property, (iii) the Deed of Trust,
Leasehold Deed of Trust, Security Agreement, Fixture Financing
Statement, Assignment of Leases and Rents and Financing Statement
dated as of the Closing Date executed by ILC in favor of the Agent
relating to the Santa Xxxxx Property and (iv) each Deed of Trust,
Leasehold Deed of Trust, Security Agreement, Fixture Financing
Statement, Assignment of Leases and Rents and Financing Statement or
mortgage or similar agreement executed by the Borrower or any
Subsidiary (whether of even date herewith or delivered after the
Closing Date pursuant to Article VI or Section 9.21 hereof) in favor
of the Agent in the
12
form of Exhibit H attached hereto and incorporated herein by
reference, each as from time to time amended, supplemented or
replaced;
"Deed of Trust Modification" means that certain First
Modification to the Deed of Trust dated as of the Closing Date
executed and delivered by ORC for the benefit of the Agent and the
Lenders relating to the Azusa Property, as from time to time amended,
supplemented or replaced;
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder;
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan, until the end of the Interest Period applicable thereto, a rate
of two percent (2%) above the Eurodollar Rate applicable to such Loan,
and thereafter at a rate of interest per annum which shall be two
percent (2%) above the Base Rate, (ii) with respect to Base Rate
Loans, at a rate of interest per annum which shall be two percent (2%)
above the Base Rate, and (iii) in any case, the maximum rate permitted
by law, if lower;
"Determination Date" means the last day of each fiscal
quarter of the Borrower;
"Direct Foreign Control Subsidiary" means any Foreign Control
Subsidiary whose outstanding Voting Stock is owned by the Borrower or
a Domestic Subsidiary;
"Direct Foreign Subsidiary" means any Foreign Subsidiary a
majority of a portion of whose outstanding Voting Stock is owned by
the Borrower or a Domestic Subsidiary;
"Dollars" and the symbol "$" mean dollars constituting legal
tender for the payment of public and private debts in the United
States;
"Domestic Control Subsidiary" means any Control Subsidiary
which is organized under the laws of one of the states comprising the
United States of America, any territory thereof or the District of
Columbia;
"Domestic Subsidiary" means any Subsidiary which is organized
under the laws of one of the states comprising the United States of
America, any territory thereof or the District of Columbia;
"Eligible Assignee" means (i) a Lender; (ii) an affiliate of
a Lender; and (iii) any other Person approved by the Agent and, unless
an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 12.1 hereof, the
Borrower, such approval not to be unreasonably withheld or delayed by
the Borrower and such approval to be deemed given by the Borrower
within five Business Days after written notice of such proposed
assignment has been provided by the assigning Lender to the Borrower;
provided, however, that (a) if such Person is a foreign entity, it
must have a zero rate of withholding and (b) neither the Borrower nor
an affiliate of the Borrower shall qualify as an Eligible Assignee;
13
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Agent:
(i) Government Securities;
(ii) obligations of any corporation organized under
the laws of any state of the United States or under the laws
of any other nation, payable in the United States, expressed
to mature not later than 90 days following the date of
issuance thereof and rated in an investment grade rating
category by S&P and Xxxxx'x;
(iii) interest bearing demand or time deposits
issued by any Lender or certificates of deposit, bankers
acceptances and other "money market instruments" maturing
within one hundred eighty (180) days from the date of
issuance thereof and issued by a bank or trust company
organized under the laws of the United States or of any state
thereof having capital surplus and undivided profits
aggregating at least $1,000,000;
(iv) prime commercial paper of the Agent, each
Lender or their respective affiliates, and prime commercial
paper rated P-1 by Moody's, or A-1 by S&P;
(v) Repurchase Agreements;
(vi) Municipal Obligations;
"Employee Benefit Plan" means any employee benefit plan
within the meaning of Section 3(3) of ERISA which (a) is maintained
for employees of the Borrower or is assumed by the Borrower in
connection with any Acquisition or any of its ERISA Affiliates or (b)
has at any time since October 16, 1992 been maintained for the
employees of the Borrower or any current or former ERISA Affiliate;
"Environmental Laws" means any federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct
concerning, any environmental matters or conditions, environmental
protection or conservation, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended; the Superfund Amendments and Reauthorization Act
of 1986, as amended; the Resource Conservation and Recovery Act, as
amended; the Toxic Substances Control Act, as amended; the Clean Air
Act, as amended; the Clean Water Act, as amended; together with all
regulations promulgated thereunder, and any other "Superfund" or
"Superlien" law;
"Equity Offering" means a public or private offering of
equity securities (including, without limitation, any security or
investment not constituting Indebtedness exchangeable, exercisable or
convertible for or into, or otherwise entitling the holder to receive,
equity securities) of the Borrower or any Subsidiary (other than
securities issued to the Borrower or another Subsidiary); provided,
however, the term "Equity Offering" shall not include
14
(i) any Equity Offering that does not result in any Net Proceeds to
the Borrower or any Subsidiary and (ii) any issuance of equity
securities in connection with the exercise of stock options granted
to, or purchase of restricted stock by, eligible participants under
the Stock Option Plans;
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder;
"ERISA Affiliate", as applied to the Borrower, means any
Person or trade or business which is a member of a group which is
under common control with the Borrower, who together with the
Borrower, is treated as a single employer within the meaning of
Section 414(b) and (c) of the Code;
"Eurodollar Rate" means the interest rate per annum
determined pursuant to the following formula:
Interbank Offered Rate Applicable
Eurodollar Rate = ------------------------- + Margin
1 - Reserve Requirement
"Eurodollar Rate Loan" means any Eurodollar Rate Revolving
Loan and any Eurodollar Rate Segment;
"Eurodollar Rate Revolving Loan" means any Revolving Loan
that bears interest at the Eurodollar Rate;
"Eurodollar Rate Segment" means a Segment of the Term Loan
bearing interest or to bear interest at the Eurodollar Rate.
"Event of Default" means any of the occurrences set forth as
such in Section 12.1 hereof;
"Existing Credit Agreement" has the meaning given to such
term in the recitals hereto;
"Facilities" means the Term Loan Facility, the Revolving
Credit Facility and the Letter of Credit Facility;
"Facility Termination Date" means such date as all of the
following shall have occurred: (a) the Borrower shall have permanently
terminated the Revolving Credit Facility by payment in full of all
Revolving Credit Outstandings and Letter of Credit Outstandings,
together with all accrued and unpaid interest thereon, except for such
issued and undrawn Letters of Credit as have been fully cash
collateralized in a manner consistent with the terms of Section
12.1(l)(B), (b) the Borrower shall have paid all Term Loan
Outstandings in full, together with all accrued and unpaid interest
thereon, (c) all Swap Agreements shall have been terminated, expired
or cash collateralized, (d) all Term Loan Commitments, Revolving
15
Credit Commitments and Letter of Credit Commitments shall have
terminated or expired and (e) the Borrower shall have fully, finally
and irrevocably paid and satisfied in full all Obligations (other than
Obligations consisting of continuing indemnities and other contingent
Obligations of the Borrower or any Guarantor that may be owing to the
Lenders pursuant to the Loan Documents and expressly survive
termination of this Agreement);
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day, provided that (a)
if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average
rate quoted to the Agent on such day on such transactions as
determined by the Agent in a commercially reasonable manner;
"Fiscal Year" means the twelve (12) month fiscal period of
the Borrower ended December 31 of each calendar year;
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan;
"Foreign Control Subsidiary" means any Control Subsidiary
organized under the laws of any jurisdiction other than one of the
states comprising the United States of America, any territory thereof
or the District of Columbia;
"Foreign Subsidiary" means any Subsidiary organized under the
laws of any jurisdiction other than one of the states comprising the
United States of America, any territory thereof or the District of
Columbia;
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrower taken together as one accounting
period;
"GAAP" means those generally accepted principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board, the Accounting Principles Board, the American
Institute of Certified Public Accountants or which have other
substantial authoritative support and are applicable in the
circumstances as of the date of a report, as such principles are from
time to time supplemented and amended, subject to compliance at all
times with Section 1.2 hereof;
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on which are
fully and unconditionally guaranteed by, the United States of America;
16
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, agency or instrumentality or political subdivision
thereof or any entity or officer exercising executive, legislative or
judicial, regulatory or administrative functions of or pertaining to
any government or any court, in each case whether a state of the
United States, the United States or foreign nation, state, province or
other governmental instrumentality;
"Guarantor" means ORC, ILC and any other now or hereafter
created or acquired Material Subsidiary;
"Guaranty" means, collectively (or individually as the
context may indicate), (i) the Second Amended and Restated Guaranty
Agreement executed and delivered by the Domestic Subsidiaries dated as
of the Closing Date and (ii) each other Guaranty Agreement executed by
any Guarantor (whether of even date herewith or delivered after the
Closing Date pursuant to Article VI or Section 9.21 hereof and whether
executed individually or jointly and severally with other
Subsidiaries) in favor of the Agent guaranteeing in whole or in part
the payment of the Obligations, substantially in the form of Exhibit E
attached hereto and incorporated herein by reference, as from time to
time amended, supplemented or replaced;
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste, substance or
material (including without limitation petroleum products,
asbestos-containing materials and lead), the generation, handling,
storage, transportation, disposal, treatment, release, discharge or
emission of which is subject to any Environmental Law;
"Hedging Obligations" means any and all obligations of the
Borrower, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor),
under (i) any and all agreements, devices or arrangements designed to
protect at least one of the parties thereto from the fluctuations of
interest rates, currency exchange rates or forward rates applicable to
such party's commodities, assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options, puts,
warrants and those commonly known as interest rate "swap" agreements,
and forward commodity price options, puts, warrants and those commonly
known as commodity "swap" agreements; and (ii) any and all
cancellations, buybacks, reversals, terminations or assignments of any
of the foregoing;
"ILC" means (a) with respect to any time prior to the
consummation of the Merger, ILC Technology, Inc., a California
corporation, and (b) with respect to any time following the
consummation of the Merger, ILC Technology, Inc., a Delaware
corporation and a wholly-owned Subsidiary of the Borrower;
17
"ILC Credit Facilities" means the credit facilities made
available to ILC by the Union Bank of California, N.A. pursuant to
that certain Amended and Restated Loan Agreement dated September 4,
1997;
"Indebtedness" of a Person shall mean, without duplication,
(i) all Indebtedness for Money Borrowed, (ii) obligations of such
Person arising under acceptance facilities, (iii) the undrawn face
amount of, and unpaid reimbursement obligations in respect of, all
letters of credit issued for the account of such Person, (iv) all
obligations of such Person upon which interest charges are customarily
paid, other than trade payables incurred in the ordinary course of
business, operating leases and taxes, (v) all obligations of such
Person under conditional sale or other title retention agreements
relating to property purchased by such Person (even though the rights
and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property), (vi)
all executory obligations of such Person in respect of Hedging
Obligations and (vii) all Contingent Obligations in respect of
Indebtedness of other Persons;
"Indebtedness for Money Borrowed" means for any Person all
indebtedness in respect of money borrowed, including without
limitation all Capital Leases and the deferred purchase price of any
property or asset, evidenced by a promissory note, bond, debenture or
similar written obligation for the payment of money, other than trade
payables incurred in the ordinary course of business (including, but
not limited to all conditional sales or similar title retention
agreements);
"Intellectual Property" has the meaning given to such term in
Section 8.13 hereof;
"Intellectual Property Assignments" means those certain
Second Amended and Restated Assignments of Patents, Trademarks,
Copyrights and Licenses in the form attached to the Intellectual
Property Security Agreement as Exhibit A, to be filed upon
acceleration of the Obligations hereunder, as from time to time
amended, supplemented or replaced;
"Intellectual Property Security Agreement" means,
collectively (or individually as the context may indicate), (i) the
Second Amended and Restated Intellectual Property Security Agreement
dated as of the Closing Date and executed by the Borrower and certain
of its Material Subsidiaries in favor of the Agent and (ii) each other
Intellectual Property Security Agreement executed by the Borrower or a
Material Subsidiary of the Borrower (whether of even date herewith or
delivered after the Closing Date pursuant to Article VI or Section
9.21 hereof and whether executed individually or jointly and severally
with other Subsidiaries) in favor of the Agent to collaterally secure
payment and performance of its respective obligations hereunder and
under the Guaranty, as applicable, substantially in the form of
Exhibit M attached hereto and incorporated herein by reference, as
from time to time amended, supplemented or replaced;
"Interbank Offered Rate" means the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m.
(London
18
time) two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any
reason such rate is not available, the term "Interbank Offered Rate"
shall mean, for any Eurodollar Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the
London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day
of such Interest period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates (rounded upwards, if necessary, to the nearest 1/100 of
1%);
"Interest Period" for each Eurodollar Rate Loan means a
period commencing on the date such Eurodollar Rate Loan is made or
converted and each subsequent period commencing on the last day of the
immediately preceding Interest Period for such Eurodollar Rate Loan,
and ending, at the Borrower's option, on the date one, two, three or
six months thereafter as notified to the Agent by the Authorized
Representative three (3) Business Days prior to the beginning of such
Interest Period; provided, that,
(A) if the Authorized Representative fails
to notify the Agent of the length of an Interest
Period three (3) Business Days prior to the first
day of such Interest Period, the Interest Period for
such Loan shall be deemed to be one month;
(B) if an Interest Period for a Eurodollar
Rate Loan would end on a day which is not a Business
Day such Interest Period shall be extended to the
next Business Day (unless such extension would cause
the applicable Interest Period to end in the
succeeding calendar month, in which case such
Interest Period shall end on the next preceding
Business Day);
(C) any Interest Period which 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;
(D) no Interest Period shall extend past
the Revolving Credit Termination Date or the Term
Loan Termination Date;
(E) on any day, with respect to all Loans,
there shall be not more than eight (8) Interest
Periods in effect;
"Interest Rate Selection Notice" means the notice delivered
by an Authorized Representative in connection with the election of a
subsequent interest period for any Eurodollar Rate Loan or the
conversion of any Eurodollar Rate Loan into a Base Rate Loan or the
conversion of any Base Rate Loan into a Eurodollar Rate Loan, in the
form of Exhibit F attached hereto and incorporated herein by
reference;
19
"Issuing Bank" means NationsBank, or any successor or
replacement bank, as issuer of Letters of Credit in accordance with
Article 4 hereof;
"Landlord Waivers" means, collectively, each of the Landlord
Waivers delivered by the landlord of each material facility leased by
the Borrower and any Guarantor listed on Schedule 1 hereto or arising
after the Closing Date and delivered by the Borrower and the
Guarantors, as applicable, pursuant to Article VI or Section 9.21
hereof, substantially in the form of Exhibit P hereto and incorporated
herein by reference;
"LC Account Agreement" means the LC Account Agreement dated
as of the date hereof between the Borrower and the Agent in the form
of Exhibit K-1 hereto, as amended, supplemented or replaced from time
to time;
"Letter of Credit" means any Standby Letter of Credit or
Commercial Letter of Credit issued by Issuing Bank for the account of
the Borrower as described in Article IV hereof;
"Letter of Credit Commitment" means with respect to each
Lender, the obligation of such Lender to acquire Participations up to
an aggregate stated amount at any one time outstanding equal to such
Lender's Applicable Commitment Percentage of the Total Letter of
Credit Commitment as the same may be increased or decreased from time
to time pursuant to this Agreement;
"Letter of Credit Facility" means the facilities described in
Article IV hereof providing for the issuance by Issuing Bank for the
account of the Borrower of Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding the Total Letter of
Credit Commitment;
"Letter of Credit Outstandings" means all undrawn amounts of
Letters of Credit plus Reimbursement Obligations;
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and its
Subsidiaries shall be deemed to be the owners of any property which
either of them have acquired or hold subject to a conditional sale
agreement, financing lease, or other arrangement pursuant to which
title to the property has been retained by or vested in some other
Person for security purposes;
"Loan" or "Loans" means any of the Revolving Loans or the
Term Loan;
"Loan Documents" means this Agreement, the Notes, the
Guaranty, the Security Instruments, and all other instruments and
documents now or hereafter executed or delivered to and in favor of
any Lender or the Agent in connection with the Loans or the Letters of
20
Credit made, issued or created under this Agreement, all as from time
to time amended, supplemented or replaced;
"Material Adverse Effect" means a material adverse effect on
the business, properties, operations or condition, financial or
otherwise, of the Borrower and its Subsidiaries on a consolidated
basis;
"Material Subsidiary" means any Domestic Subsidiary of the
Borrower which (i) has total assets equal to or greater than 5% of
Consolidated Total Assets (calculated as of the most recent fiscal
period with respect to which the Agent shall have received financial
statements required to be delivered pursuant to Sections 9.1(a) or (b)
(or if prior to delivery of any financial statements pursuant to such
Sections, then calculated with respect to the Fiscal Year end
financial statements referenced in Section 8.6 hereof) (the "Required
Financial Information")) or (ii) has pretax income equal to or greater
than 5% of Consolidated Pretax Income (each calculated for the most
recent period for which the Agent has received the Required Financial
Information); provided, however, that notwithstanding the foregoing,
the term "Material Subsidiaries" shall mean Domestic Subsidiaries of
the Borrower that together with the Borrower have assets equal to not
less than 95% of Consolidated Total Assets (calculated as described
above) and net income of not less than 95% of Consolidated Pretax
Income (calculated as described above); provided further that if more
than one combination of Domestic Subsidiaries satisfies such
threshold, then those Subsidiaries so determined to be "Material
Subsidiaries" shall be specified by the Borrower;
"Merger" means the merger of ILC with and into BILC
Acquisition Corp. pursuant to the Merger Agreement;
"Merger Agreement" means that certain Agreement and Plan of
Merger dated as of October 30, 1997 by and among BEC Group, Inc., BILC
Acquisition Corp. and ILC Technology, Inc., as amended and in effect
on the Closing Date;
"Moody's" means Xxxxx'x Investors Service, Inc.;
"Mortgaged Property" means the Azusa Property, the Santa
Xxxxx Property, the Sunnyvale Property and any other property in which
a lien, mortgage or security interest is conveyed to the Agent
pursuant to a Deed of Trust;
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) years;
"Municipal Obligations" means general obligations issued by,
and supported by the full taxing authority of, any state of the United
States of America or of any municipal corporation or other public body
organized under the laws of any such state which are rated,
21
in their capacity as issuer of general obligations, in the highest
investment rating category by both S&P and Moody's;
"Net Proceeds" (a) from any Equity Offering means cash
payments received by the Borrower therefrom as and when received, net
of all legal, accounting, banking and underwriting fees and expenses,
commissions, discounts and other issuance expenses incurred in
connection therewith and all taxes required to be paid or accrued as a
consequence of such issuance; and (b) from any Asset Disposition means
cash payments received by the Borrower therefrom (including any cash
payments received pursuant to any note or other debt security received
in connection with any Asset Disposition) as and when received, net of
(i) all legal fees and expenses and other fees and expenses paid to
third parties and incurred in connection therewith, (ii) all taxes
required to be paid or accrued as a consequence of such sale and (iii)
all amounts applied to repayment of Indebtedness (other than the
Obligations) secured by a Lien on the asset or property disposed;
"NMS" means NationsBanc Xxxxxxxxxx Securities LLC and its
successors;
"Notes" means, collectively, the Term Notes and the Revolving
Notes;
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) the
Reimbursement Obligations, (iii) all liabilities of Borrower to any
Lender which arise under a Swap Agreement, and (iv) the payment and
performance of all other obligations, liabilities and Indebtedness of
the Borrower to the Lenders or the Agent hereunder, under any one or
more of the other Loan Documents or otherwise with respect to the
Loans;
"Operating Documents" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership or other legally authorized incorporated or
unincorporated entity, the bylaws, operating agreement, partnership
agreement or limited partnership agreement of such entity;
"ORC" means ORC Technologies, Inc., a Delaware corporation;
"Organizational Documents" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership or other legally authorized
incorporated or unincorporated entity, the articles of incorporation,
certificate of incorporation, articles of organization or certificate
of limited partnership of such entity;
"Outstandings" means, at any time of determination, the sum
of the Term Loan Outstandings, the Revolving Credit Outstandings and
the Letter of Credit Outstandings;
"Participation" means, with respect to any Lender (other than
Issuing Bank), the extension of credit represented by the
participation of such Lender hereunder in the liability
22
of Issuing Bank in respect of a Letter of Credit issued by Issuing
Bank in accordance with the terms hereof;
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto;
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of
ERISA or Section 412 of the Code and which is, or was since October
16, 1992, maintained for employees of the Borrower or any ERISA
Affiliate;
"Permitted Acquisition" means (a) the acquisition of all or a
portion of the capital stock of Voltarc not owned by the Borrower on
the Closing Date on or prior to June 30, 1999 pursuant to the terms of
that certain Stock Purchase and Option Agreement dated as of October
1, 1997, as in effect on the date hereof, and (b) each other
Acquisition beyond the normal course of business effected with the
consent and approval of the board of directors or other applicable
governing body of the Person being acquired, and with the duly
obtained approval of such shareholders or other holders of equity
interest as such Person may be required to obtain, so long as (i)
immediately prior to and immediately after the consummation of such
Acquisition, no Default or Event of Default has occurred and is
continuing, (ii) substantially all of the sales and operating profits
generated by such Person (or assets) so acquired or invested are
derived from a line or lines of business that are part of the Core
Business or complimentary to the Core Business as then conducted by
the Borrower and its Subsidiaries, (iii) pro forma historical
financial statements as of the end of the most recent month for the
trailing twelve month period giving effect to such Acquisition are
delivered to the Agent not less than five (5) Business Days prior to
the consummation of such Acquisition, together with a certificate of
an Authorized Representative demonstrating compliance with Article XI
hereof after giving effect to such Acquisition, (iv) the aggregate
Cost of Acquisition (excluding the value of any capital stock of the
Borrower given as part of the Cost of Acquisition) with respect to any
Acquisitions consummated (A) during any Fiscal Year shall not exceed
$5,000,000, and (B) during the term of this Agreement shall not exceed
$10,000,000, (v) the aggregate Cost of Acquisition which consists in
whole or in part of the value of any capital stock of the Borrower
(including without limitation when combined with cash, debt or the
assumption of indebtedness for any specific Acquisition) with respect
to any Acquisition consummated after the Closing Date shall not exceed
$25,000,000, (vi) in the event the Person so acquired is not a
Subsidiary, the Borrower's strategic plan includes additional
permitted investment in such Person sufficient for it to become a
Subsidiary and (vii) any Advance to finance an Acquisition otherwise
qualifying as a Permitted Acquisition hereunder shall be in compliance
with Section 3.15 hereof;
"Permitted Indebtedness" has the meaning assigned to such
term in Section 10.1 hereof;
"Permitted Liens" has the meaning assigned to such term in
Section 10.2 hereof;
23
"Person" means an individual, partnership, corporation,
trust, unincorporated organization, association, joint venture or a
government or agency or political subdivision thereof;
"Pledged Stock" means (i) all of the capital stock and
related rights and interests owned by the Borrower of each direct and
indirect Domestic Subsidiary and Domestic Control Subsidiary, (ii) all
of the capital stock and related rights and interests of Voltarc owned
by the Borrower, (iii) 65% of the Voting Stock and 100% of the
nonvoting capital stock and related interests and rights directly or
indirectly owned by the Borrower of Q-Arc and each other Direct
Foreign Subsidiary or Direct Foreign Control Subsidiary and (iv) 100%
of the capital stock and related interests and rights directly or
indirectly owned by the Borrower of any Foreign Subsidiary or Foreign
Control Subsidiary to the extent such action would not result in any
material adverse tax impact on the Borrower, in each case now or
hereafter pledged by the Borrower and certain Subsidiaries pursuant to
the Stock Pledge Agreement;
"PLI" means Precision Lamp, Inc., a California corporation;
"Prime Rate" means the per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not
be the lowest rate of interest charged by NationsBank to its
customers;
"Principal Office" means the office of the Agent at
NationsBank, National Association, Xxxxxxxxxxxx Xxxxxx, 00xx Xxxxx,
XX0 000-00-00, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Agency
Services, or such other office and address as the Agent may from time
to time designate in writing;
"Q-Arc" means Q-Arc Ltd., a limited liability company
organized under the laws of England and Wales;
"Regulation D" means Regulation D of the Board as the same
may be amended or supplemented from time to time;
"Regulatory Change" means any change in, or the adoption or
making of new, United States Federal or state laws or regulations
(including Regulation D and capital adequacy regulations) or foreign
laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks,
which includes any of the Lenders, under any United States Federal or
state or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof or compliance by any
Lender with any request or directive regarding capital adequacy,
whether or not having the force of law, whether or not failure to
comply therewith would be unlawful;
"Reimbursement Obligation" shall mean at any time, the
obligation of the Borrower with respect to any Letter of Credit to
reimburse Issuing Bank and the Lenders to the extent
24
of their respective Participations (including by the receipt by
Issuing Bank of proceeds of Loans pursuant to Section 4.2 hereof) for
amounts theretofore paid by Issuing Bank pursuant to a drawing under
such Letter of Credit;
"Repurchase Agreement" means a repurchase agreement entered
into with (i) any financial institution whose debt obligations are
rated "A" by either of S&P or Xxxxx'x or whose commercial paper is
rated "A-1" by S&P or "P-1" by Xxxxx'x, or (ii) any Lender;
"Required Lenders" means, as of any date, Lenders on such
date having Credit Exposures (as defined below) aggregating in excess
of 50% of the aggregate Credit Exposures of all the Lenders on such
date. For purposes of the preceding sentence, the amount of the
"Credit Exposure" of each Lender shall be equal at all times (a) other
than following the occurrence and during the continuance of an Event
of Default, to the sum of its Revolving Credit Commitment and Term
Loan Commitment, and (b) following the occurrence and during the
continuance of an Event of Default, to the sum of (i) the amount of
such Lender's Applicable Commitment Percentage of Term Loan
Outstandings plus (ii) the aggregate principal amount of such Lender's
Applicable Commitment Percentage of Revolving Credit Outstandings plus
(iii) the amount of such Lender's Applicable Commitment Percentage of
Letter of Credit Outstandings; provided that, for the purpose of this
definition only, (x) if any Lender shall have failed to fund its
Applicable Commitment Percentage of any Advance, the Term Loan
Commitment or Revolving Credit Commitment, as applicable, of such
Lender shall be deemed reduced by the amount it so failed to fund for
so long as such failure shall continue and such Lender's Credit
Exposure attributable to such failure shall be deemed held by any
Lender making more than its Applicable Commitment Percentage of such
Advance to the extent it covers such failure, and if any Lender shall
have failed to pay to the Issuing Bank upon demand its Applicable
Commitment Percentage of any drawing under any Letter of Credit
resulting in an outstanding Reimbursement Obligation, such Lender's
Credit Exposure attributable to such Letter of Credit Outstandings
shall be deemed to be held by Issuing Bank;
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or any successor) by member banks of
the Federal Reserve System against, in the case of Eurodollar Rate
Loans, "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained
by such member banks with respect to (i) any category of liabilities
which includes deposits by reference to which any Eurodollar Rate is
to be determined or (ii) any category of extensions of credit or other
assets which include Eurodollar Rate Loans. Eurodollar Rate Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credit for proration, exceptions or offsets that may be available from
time to time to the Agent. Eurodollar Rate Loans shall be adjusted
automatically on and as of the effective date of any change in the
Reserve Requirement.
25
"Revolving Credit Commitment" means with respect to each
Lender, the obligation of such Lender to make Revolving Loans to the
Borrower and to purchase Participations up to an aggregate principal
amount at any time outstanding equal to the amount set forth opposite
each Lender's name on Exhibit A hereto as the same may be increased or
decreased from time to time pursuant to this Agreement;
"Revolving Credit Facility" means the facility described in
Article III hereof providing for Revolving Loans to the Borrower by
the Lenders in an aggregate principal amount equal to (i) the
Revolving Credit Commitment, less (ii) the aggregate principal amount
of Letter of Credit Outstandings;
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
then outstanding;
"Revolving Credit Termination Date" means the earliest to
occur of (i) March 12, 2003 or (ii) such earlier date of termination
of the Lenders' obligations pursuant to Section 12.1 hereof upon the
occurrence of an Event of Default, or (iii) such date as the Borrower
may permanently terminate the Revolving Credit Facility by payment in
full of all Obligations thereunder (including the discharge of all
obligations of the Issuing Bank and the Lenders with respect to
Letters of Credit and Participations) pursuant to Section 3.6 hereof;
"Revolving Loan" means a Loan made under the Revolving Credit
Facility pursuant to Section 3.1 hereof;
"Revolving Notes" means the amended and restated promissory
notes of the Borrower evidencing the Revolving Loans executed and
delivered to the Lenders as provided in Section 3.9 hereof
substantially in the form of Exhibit J hereto, as amended,
supplemented, or replaced from time to time;
"Santa Xxxxx Property" means those certain two parcels of
real property of ILC and all improvements thereon located in Santa
Clara, California;
"S&P" means Standard & Poor's Rating Group, a division of the
McGraw Hill Company, Inc.;
"Scheduled Maturity Date" means March 12, 2003
"Security Agreement" means, collectively (or individually as
the context may indicate), (i) the Second Amended and Restated
Security Agreement dated as of the date hereof by the Borrower and
each Guarantor to the Agent, and (ii) any additional Security
Agreement (whether of even date herewith or delivered after the
Closing Date pursuant to Article VI or Section 9.21 hereof and whether
executed individually or jointly and severally with other
Subsidiaries) delivered to the Agent, in each case, substantially in
the form attached hereto as Exhibit L, as such Security Agreement may
be amended, supplemented or replaced from time to time.
26
"Security Instruments" means the Security Agreement, the
Intellectual Property Security Agreement, the Stock Pledge Agreement,
the Deed of Trust, the Deed of Trust Modification, the Landlord
Waivers, the Intellectual Property Assignments, the Subordination
Agreement, the Collateral Assignment of Stock Purchase Agreement and
all other documents and agreements executed and delivered in
connection herewith granting to the Lenders Liens on any assets of the
Borrower or any Guarantor collaterally to secure payment and
performance of the Obligations and obligations under the Guaranty;
"Segment" means a portion of the Term Loan with respect to
which a particular interest rate is (or is proposed to be) applicable;
"Share Mortgage" means that certain Mortgage Over Shares
delivered by ILC and dated as of the Closing Date with respect to
certain shares of capital stock of Q-Arc, as such Share Mortgage may
be amended, supplemented or replaced from time to time;
"Single Employer Plan" means any employee pension benefit
plan covered by Title IV of ERISA in respect of which the Borrower or
any Subsidiary is an "employer" as described in Section 4001(b) of
ERISA and which is not a Multi-employer Plan;
"Solvent" means, when used with respect to any Person, that
at the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including, without limitation, Contingent Obligations; and
(ii) it is then able and expects to be able to pay
its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted;
"Spin-Off" means the spin-off of Bolle and distribution of
its shares by the Borrower pursuant to the transactions described on
the Form S-1 of Bolle, and all amendments thereto, effective as of
February 13, 1998, Registration No. 333-40279 and that certain Xxxx of
Sale substantially in the form attached to the Merger Agreement and
certain other documents and agreements related thereto, including the
exchange of the Series A Preferred Stock of the Borrower for the
Series B Preferred Stock of Bolle;
"Standby Letter of Credit" means an irrevocable standby
letter of credit issued hereunder for the account of the Borrower or
any of its Subsidiaries, provided that the expiry date of a Standby
Letter of Credit shall not be later than twelve (12) months subsequent
to the date of issuance thereof;
27
"Sterling Note" means the Convertible Callable Subordinated
Debenture due September 15, 2015 issued by Sterling Vision, Inc.
("Sterling") having a book value of approximately $1,800,000 which is
convertible into shares of common stock of Sterling;
"Stock Option Plans" means, collectively, the BEC Group, Inc.
1996 Stock Incentive Plan and the BEC Group, Inc. 1996 Employee Stock
Purchase Plan;
"Stock Pledge Agreement" means, collectively (or individually
as the context may indicate), (i) that certain Second Amended and
Restated Stock Pledge Agreement dated as of the date hereof between
the Borrower, certain Guarantors and the Agent for the benefit of the
Agent and the Lenders, (ii) the Share Mortgage and (iii) any
additional Stock Pledge Agreement delivered to the Agent (whether of
even date herewith or delivered after the Closing Date pursuant to
Article VI or Section 9.21 hereof and whether executed individually or
jointly and severally with other Subsidiaries), substantially in the
form attached hereto as Exhibit G, as each such Stock Pledge Agreement
may be amended, supplemented or replaced from time to time;
"Subordination Agreement" means that certain Subordination
Agreement dated as of the date hereof between the Agent, the Borrower
and certain Subsidiaries now or hereafter a party thereto,
substantially in the form attached hereto as Exhibit Q, as such
Subordination Agreement may be amended, supplemented or replaced from
time to time;
"Subordinated Indebtedness" means all Indebtedness evidenced
by the 8% Convertible Subordinated Notes due 2002 issued by the
Borrower;
"Subsidiary" means any corporation or other entity in which
more than 50% of its outstanding stock having ordinary voting power or
more than 50% of all equity interests is owned or controlled directly
or indirectly by the Borrower or by one or more of the Borrower's
Subsidiaries, in each case, at or after the Closing Date; provided,
however, that, subject to Section 1.3(a) hereof, the term "Subsidiary"
shall not include any Control Subsidiary;
"Sunnyvale Property" means those certain two parcels of real
property of ILC and all improvements thereon located in Sunnyvale,
California;
"Swap Agreement" means one or more agreements between the
Borrower and a Lender, on terms mutually acceptable to such Borrower
and such Lender with respect to Indebtedness evidenced by the Notes,
which agreements create Hedging Obligations;
"Term Loan" means the loan made pursuant to the Term Loan
Facility in accordance with Article II hereof;
"Term Loan Commitment" means, with respect to each Lender,
the obligation of such Lender as set forth in Section 2.1 hereof to
make the Term Loan to the Borrower in a
28
principal amount equal to such Lender's Applicable Commitment
Percentage of the Total Term Loan Commitment as set forth on Exhibit A
hereto;
"Term Loan Facility" means the facility described in Article
II providing for a Term Loan to the Borrower by the Lenders in the
aggregate principal amount of the Total Term Loan Commitment;
"Term Loan Outstandings" means, as of any date of
determination, the principal amount of the Term Loan then outstanding;
"Term Loan Termination Date" means (i) March 12, 2003 or (ii)
such earlier date of termination of Lenders' obligations pursuant to
Section 12.1 upon the occurrence of an Event of Default, or (iii) such
date as the Borrower may voluntarily or by mandatory prepayment
permanently terminate the Term Loan Facility by payment in full of all
Obligations incurred in connection with the Term Loan pursuant to
Sections 2.5 or 2.6 hereof;
"Term Notes" means, collectively, the amended and restated
promissory notes of the Borrower evidencing the Term Loan executed and
delivered to the Lenders as provided in Section 2.8 hereof
substantially in the form of Exhibit I hereto, as amended,
supplemented or, replaced from time to time;
"Termination Event" means: (a) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder; or (b)
the withdrawal of the Borrower or any ERISA Affiliate from a Pension
Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA or was deemed such under
Section 4068(f) of ERISA; or (c) the termination of a Pension Plan,
the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section
4041 of ERISA; or (d) the institution of proceedings to terminate a
Pension Plan by the PBGC; or (e) any other event or condition which
would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any
Pension Plan; or (f) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan; or (g) the
imposition of a Lien pursuant to Section 412 of the Code or Section
302 of ERISA; or (h) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Section
4241 or Section 4245 of ERISA, respectively; or (i) any event or
condition which results in the termination of a Multiemployer Plan
under Section 4041A of ERISA or the institution by the PBGC of
proceedings to terminate a Multiemployer Plan under Section 4042 of
ERISA;
"Total Credit Commitment" means the sum of the Total Term
Loan Commitment, and the Total Revolving Credit Commitment;
"Total Letter of Credit Commitment" means $5,000,000;
"Total Revolving Credit Commitment" means $40,000,000, as
reduced from time to time in accordance with Sections 3.6 and 3.7
hereof;
29
"Total Term Loan Commitment" means, with respect to the
Lenders as a whole, a principal amount equal to $30,000,000 available
in Dollars;
"Type" shall mean any type of Loan or Segment bearing
interest at a specified rate (i.e., Base Rate Loan or Eurodollar Rate
Loan);
"UCC" means the Uniform Commercial Code of the State of New
York, as amended or supplemented from time to time.
"Unused Fee" has the meaning assigned to such term in Section
3.13(a) hereof;
"Voltarc" means Voltarc Technologies, Inc., a Delaware
corporation;
"Voting Stock" means shares of capital stock issued by a
corporation, or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been
suspended by the happening of such a contingency;
"Yumex" means Yumex Co. Ltd., a corporation existing under
the laws of Japan, which is a party to a joint venture in which ILC is
a partner.
SECTION 1.3 Rules of Interpretation.
(a) All accounting terms not specifically defined herein
shall have the meanings assigned to such terms and shall be
interpreted in accordance with GAAP applied on a Consistent Basis;
provided, however, that to the extent any term defined in this Article
I refers to "Subsidiaries" and contains a calculation to be made in
accordance with GAAP, the term "Subsidiaries" shall be deemed to
include Control Subsidiaries for the purpose of the calculation
contained within such definition;
(b) Each term defined in Article 1 or 9 of the UCC shall have
the meaning given therein unless otherwise defined herein, except to
the extent that the Uniform Commercial Code of another jurisdiction is
controlling, in which case such terms shall have the meaning given in
the Uniform Commercial Code of the applicable jurisdiction;
(c) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of
reference and shall not constitute a part of any such document or
affect the meaning, construction or effect of any provision thereof;
(d) Except as otherwise expressly provided, references herein
to articles, sections, paragraphs, clauses, annexes, appendices,
exhibits and schedules are references to articles, sections,
paragraphs, clauses, annexes, appendices, exhibits and schedules in or
to this Agreement;
30
(e) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of
such defined term, and all references to the masculine gender shall
include reference to the feminine or neuter gender, and vice versa, as
the context may require;
(f) When used herein or in any other Loan Document, words
such as "hereunder", "hereto", "hereof" and "herein" and other words
of like import shall, unless the context clearly indicates to the
contrary, refer to the whole of the applicable document and not to any
particular article, section, subsection, paragraph or clause thereof;
(g) References to "including" means including without
limiting the generality of any description preceding such term;
(h) All dates and times of day specified herein shall refer
to such dates and times at Charlotte, North Carolina.
ARTICLE II
THE TERM LOAN
SECTION 2.1 TERM LOAN. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make an Advance of the Term Loan as
early as practicable on the Closing Date on a pro rata basis determined by the
Term Loan Commitment of each Lender by wire transfer to the Agent. Such wire
transfer shall be directed to the Agent at the Principal Office and shall be in
the form of immediately available Dollars . The amount so received by the Agent
shall, subject to the terms and conditions of this Agreement, be made available
to the Borrower by delivery of the proceeds thereof to the Borrower's Account
or otherwise as shall be directed by the Authorized Representative and
reasonably acceptable to the Agent. The Term Loan shall be available in a
single draw in Dollars at Closing. The principal amount of each Segment
outstanding hereunder from time to time shall bear interest, at the Borrower's
election, at an interest rate per annum equal to the Base Rate or the
Eurodollar Rate; provided, however, that (i) no Eurodollar Rate Segment shall
have an Interest Period that extends beyond the Term Loan Termination Date,
(ii) each Eurodollar Rate Segment shall be in the minimum amount of $500,000
and, if greater, an integral multiple of $50,000 and (iii) the principal amount
of each Eurodollar Rate Segment may, subject to the provisions of Sections 2.2,
2.5 and 2.6 hereof, be repaid only on the last day of the Interest Period with
respect thereto. No amount of the Term Loan repaid or prepaid by the Borrower
may be reborrowed hereunder, and no Advance of the Term Loan shall be made by
any Lender after the Closing Date.
SECTION 2.2 Payment of Principal. Subject to mandatory and optional
prepayments provided for in Sections 2.5 and 2.6 hereof, the principal amount
of the Term Loan shall be repaid quarterly, commencing with the quarter ending
December 31, 1998, in the Dollar amounts and on the dates set forth below, and
the entire amount of Term Loan Outstandings shall be due and payable in full on
the Term Loan Termination Date:
31
Quarterly
Schedule
Date Payment
---- -------
December 31, 1998 $1,500,000
March 31, 1999 $1,500,000
June 30, 1999 $1,500,000
September 30, 1999 $1,500,000
December 31, 1999 $1,500,000
March 31, 2000 $1,500,000
June 30, 2000 $1,500,000
September 30, 2000 $1,500,000
December 31, 2000 $1,500,000
March 31, 2001 $1,500,000
June 30, 2001 $1,500,000
September 30, 2001 $1,500,000
December 31, 2001 $1,500,000
March 31, 2002 $2,625,000
June 30, 2002 $2,625,000
September 30, 2002 $2,625,000
December 31, 2002 $2,625,000
March 12, 2003 All principal
remaining
outstanding
SECTION 2.3 PAYMENT OF INTEREST.
(a) The Borrower shall pay interest to the Agent for the
account of each Lender on the outstanding and unpaid principal amount
of the Term Loan made by such Lender for the period commencing on the
date of the advance of the Term Loan or the commencement of any
Interest Period with respect to any Segment until (but not including)
the end of the applicable Interest Period or the date any Segment
shall be Continued or be otherwise due at the then applicable Base
Rate for Base Rate Segments or applicable Eurodollar Rate for
Eurodollar Rate Segments, as elected by the Borrower in the applicable
Borrowing Notice or Interest Rate Selection Notice or as deemed
elected by the Borrower or otherwise applicable to such Loan as
provided herein; provided, however, that if any amount shall not be
paid when due (at maturity, by acceleration or otherwise) or if any
other Event of Default shall have occurred and be continuing
hereunder, all amounts outstanding hereunder shall bear interest
thereafter at the Default Rate from the date such Event of Default
occurred until the date such Event of Default is cured or waived.
(b) Interest on the outstanding principal balance of the Term
Loan shall be computed on the basis of a year of 360 days and
calculated for the actual number of days
32
elapsed. Interest on the Term Loan shall be paid (i) quarterly in
arrears on the last Business Day of each March, June, September and
December commencing March 1998, with respect to each Base Rate
Segment, (ii) on the last day of the applicable Interest Period for
each Eurodollar Rate Segment and, for any Eurodollar Rate Segment
having an Interest Period extending beyond three (3) months, also on
the date occurring every three (3) months after the commencement of
such Interest Period, and (iii) on the Term Loan Termination Date.
SECTION 2.4 Manner of Payment.
(a) Each payment of principal (including any mandatory or
optional prepayment), interest and fees, and any other amount required
to be paid to the Lenders with respect to the Term Loan, shall be made
to the Agent at the Principal Office for the account of each Lender in
Dollars in immediately available funds without setoff, deduction or
counterclaim on or before 2:30 P.M. on the date such payment is due.
The Agent may, but shall not be obligated to, debit the amount of any
such payment which is not made by such time from any one or more
ordinary deposit accounts of the Borrower with the Agent.
(b) The Agent shall deem any payment made by or on behalf of
the Borrower that is not made (i) in Dollars, (ii) in immediately
available funds and (iii) prior to 2:30 P.M. on the date such payment
is due to be a non-conforming payment. Any such non-conforming payment
shall not be deemed to be received by the Agent until the time such
funds are paid in Dollars and become available funds. Any
non-conforming payment which conforms to clauses (i) and (ii) above
shall be deemed received by the Agent on the next Business Day. Any
non-conforming payment may constitute or become a Default or Event of
Default. The Agent shall give prompt written notice to the Authorized
Representative and each of the Lenders (confirmed in writing) if any
payment (other than a prepayment) is non-conforming. Interest shall
continue to accrue on any principal as to which a non-conforming
payment is made until such funds become available funds (but in no
event less than the period from the date of such payment to the next
succeeding Business Day) at the Default Rate (other than with respect
to non-conforming prepayments, with respect to which interest shall
continue to accrue on any principal as to which such non-conforming
payment is made until such funds become available funds at the Base
Rate or the Eurodollar Rate, as applicable) from the date such amount
was due and payable until the date such amount is paid in full.
(c) In the event that any payment hereunder or under the Term
Notes becomes due and payable on a day other than a Business Day, then
such due date shall be extended to the next succeeding Business Day
unless provided otherwise under clause (B) of the definition of
"Interest Period"; provided, however, that interest shall continue to
accrue during the period of any such extension; and provided further,
however, that in no event shall any such due date be extended beyond
the Term Loan Termination Date.
SECTION 2.5 OPTIONAL PREPAYMENTS. The Borrower may prepay the Term
Loan in whole or in part from time to time on any Business Day, without penalty
or premium, upon not less than three (3) Business Days' prior written notice
(effective upon receipt) to the Agent, which notice shall be irrevocable. Any
prepayment, whether of a Base Rate Segment or a Eurodollar Rate
33
Segment, shall be made at a prepayment price equal to (i) the amount of
principal to be prepaid, plus (ii) all accrued and unpaid interest on the
amount so prepaid, to the date of prepayment. All prepayments under this
Section 2.5 shall be made in the minimum principal amount of $500,000 or any
integral multiple of $50,000 in excess thereof (or in the entire remaining
principal balance of the Term Loan), and all such prepayments of principal
shall be applied to installments of principal in order of their maturity. No
such prepayment shall result in the payment of any Eurodollar Rate Segment
other than on the last day of the Interest Period of such Segment unless such
prepayment is accompanied by amounts due, if any, under Section 5.5 hereof.
SECTION 2.6 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. In
addition to the required payments of principal of the Term Loan set forth in
Section 2.2 hereof and any optional payments of principal of the Term Loan
effected under Section 2.5 hereof, the Borrower shall make the following
required prepayments, each such payment to be made to the Agent for the benefit
of the Lenders within the time period specified below:
(a) Asset Dispositions. The Borrower shall make, or shall
cause each applicable Subsidiary to make, a prepayment from the Net
Proceeds of any Asset Disposition resulting in Net Proceeds which (i)
exceed $200,000 for any single or series of related transactions or
(ii) when aggregated with all other Net Proceeds from Asset
Dispositions received during any Fiscal Year exceed $400,000, in each
case, in an amount equal to one hundred percent (100%) of such Net
Proceeds in excess of such threshold amounts. Each such prepayment
shall be made within five (5) Business Days of receipt of such Net
Proceeds and upon not less than three (3) Business Days' written
notice to the Agent, which notice shall include a certificate of an
Authorized Representative setting forth in reasonable detail the
calculations utilized in computing the amount of Net Proceeds;
(b) Equity Offerings. In the event that the Consolidated
Leverage Ratio exceeds 2.50 to 1.00 for the most recently ended
Four-Quarter Period preceding any Equity Offering, the Borrower shall
make a prepayment from the Net Proceeds of such Equity Offering in an
amount equal to the lesser of (i) 100% of such Net Proceeds or (ii)
the amount of such Net Proceeds which would result in a Consolidated
Leverage Ratio equal to 2.50 to 1.00 after giving pro forma effect to
such prepayment for such Four-Quarter Period. Each such prepayment
shall be made within five (5) Business Days of receipt of such Net
Proceeds and upon not less than three (3) Business Days' written
notice to the Agent, which notice shall include a certificate of an
Authorized Representative setting forth in reasonable detail the
calculations utilized in computing the amount of Net Proceeds;
(c) AAi Payment. In the event that the Borrower shall receive
any AAi Payment, the Borrower shall make a prepayment in an amount
equal to 100% of such AAi Payment.
All mandatory prepayments made on or prior to March 31, 1999 pursuant to
Section 2.6 (a), (b) or (c) hereof shall be applied first to the next two
scheduled quarterly installments of principal and then pro rata to the
scheduled installments of principal remaining outstanding under the Term Loan
pursuant to Section 2.2 hereof (as adjusted to give effect to any prior
payments or prepayments of principal). All mandatory prepayments made after
March 31, 1999 pursuant to
34
Section 2.6 (a), (b) or (c) hereof shall be applied pro rata to the scheduled
installments of principal remaining outstanding under the Term Loan pursuant to
Section 2.2 hereof (as adjusted to give effect to any prior payments or
prepayments of principal). If as a result of the making of any payment required
to be made pursuant to this Section 2.6 the Borrower would incur costs pursuant
to Section 5.5 hereof in excess of $5,000, it may deposit the amount of such
payment with the Agent, for the benefit of the Lenders, in a cash collateral
account with and in the name of the Agent established for such purpose pursuant
to the terms of a Cash Collateral Account Agreement, as to which the Agent
shall have exclusive control, until the end of the applicable Interest Period
at which time such payment shall automatically be made. Any prepayment of a
Eurodollar Rate Loan pursuant to this Section 2.6 other than on the last day of
an Interest Period which is not subject to escrow pursuant to the immediately
preceding sentence shall be accompanied by the additional payment, if any,
required by Section 5.5 hereof.
SECTION 2.7 BORROWER'S ACCOUNT. The Borrower shall, until the Term
Loan Termination Date, continuously maintain the Borrower's Account for the
purposes herein contemplated.
SECTION 2.8 TERM NOTES. The Term Loan shall be evidenced by the Term
Notes payable to the order of each Lender in the respective amount of its Term
Loan Commitment, which Term Notes shall be dated the Closing Date or a later
date pursuant to an Assignment and Acceptance and shall be duly completed,
executed and delivered by the Borrower.
SECTION 2.9 INTEREST PERIODS. The Term Loan shall be, at the option of
the Borrower specified in the applicable Borrowing Notice or an Interest Rate
Selection Notice, comprised of either Eurodollar Rate Segments or Base Rate
Segments. Eurodollar Rate Segments and Base Rate Segments may be outstanding at
the same time, provided, however, there shall not be outstanding at any one
time Eurodollar Rate Revolving Loans and Eurodollar Rate Segments having more
than eight (8) different Interest Periods. If the Agent does not receive an
Interest Rate Selection Notice giving notice of election of the duration of an
Interest Period or of conversion of any Segment to or Continuation of a Segment
as a Eurodollar Rate Segment by the time prescribed by Section 2.10 hereof, the
Borrower shall be deemed to have elected with respect to any Segment, to
convert such Segment to (or Continue such Segment as) a Base Rate Segment until
the Borrower notifies the Agent in accordance with Section 2.10 hereof.
SECTION 2.10 CONVERSIONS AND ELECTIONS OF SUBSEQUENT INTEREST PERIODS.
(a) Upon irrevocable telephonic request, confirmed by
same-day delivery of a properly completed Interest Rate Selection
Notice by telefacsimile transmission to the Agent (or by execution and
return of a confirmatory writing prepared by the Agent), on or before
10:30 A.M. on any Business Day, the Borrower may convert any
Eurodollar Rate Segment to a Base Rate Segment on the last day of the
Interest Period for such Eurodollar Rate Segment; and
(b) Provided that no Default or Event of Default shall have
occurred and be continuing and subject to the limitations set forth
below, the Borrower may upon irrevocable
35
telephonic request, confirmed by same-day delivery of a properly
completed Interest Rate Selection Notice by telefacsimile transmission
to the Agent (or by execution and return of a confirmatory writing
prepared by the Agent), on or before 10:30 A.M. on the date that is
three (3) Business Days prior to the date of such conversion:
(i) elect a subsequent Interest Period for any
Eurodollar Rate Segment to begin on the last day of the then
current Interest Period for such Eurodollar Rate Segment; and
(ii) convert any Base Rate Segment of the Term Loan
to a Eurodollar Rate Segment on any Business Day.
Each election and conversion pursuant to this Section 2.10 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in Sections 2.1 and 2.9 and Article V hereof.
All such Continuations or Conversions of Segments shall be effected pro rata
based on the Applicable Commitment Percentages of the Lenders. The failure of
the Borrower to provide written confirmation of any telephonic notice of
election or conversion hereunder shall not affect the validity of such
telephonic notice.
SECTION 2.11 PRO RATA PAYMENTS. Except as otherwise provided herein,
(a) each payment on account of the principal of and interest on the Term Loan
shall be made to the Agent for the account of the Lenders pro rata based on
their Applicable Commitment Percentages of the Total Term Loan Commitment, (b)
all payments to be made by the Borrower for the account of each of the Lenders
on account of principal, interest and fees, shall be made without diminution,
set-off, recoupment or counterclaim, and (c) the Agent will promptly distribute
to the Lenders in immediately available funds payments received in fully
collected, immediately available funds from the Borrower.
SECTION 2.12 USE OF PROCEEDS. The proceeds of the Term Loan hereunder
shall be used by the Borrower (i) to refinance certain existing indebtedness
outstanding and owing by the Borrower, (ii) for working capital, (iii) to
finance capital expenditures and Permitted Acquisitions, (iv) for other lawful
corporate purposes, and (v) to finance the acquisition of the shares of capital
stock of Voltarc not currently owned by the Borrower.
ARTICLE III
REVOLVING LOANS
36
SECTION 3.1 REVOLVING LOANS.
(a) Commitment. Subject to availability and the terms and
conditions of this Agreement, each Lender severally agrees to make
Advances of Revolving Loans in Dollars to the Borrower under the
Revolving Credit Facility from time to time from the Closing Date
until the Revolving Credit Termination Date on a pro rata basis as to
the total borrowing requested by the Borrower on any day determined by
such Lender's Applicable Commitment Percentage up to but not exceeding
the Revolving Credit Commitment of such Lender; provided, however,
that the Lenders will not be required and shall have no obligation to
make any Advance under the Revolving Credit Facility (i) so long as
any condition set forth in Section 7.2 hereof is not satisfied or (ii)
if the Agent has accelerated the maturity of any of the Notes as a
result of an Event of Default; provided, further, however, that
immediately after giving effect to each such Advance, (A) the amount
of all Revolving Credit Outstandings plus all Letter of Credit
Outstandings shall not exceed the Total Revolving Credit Commitment,
and (B) the amount of all Outstandings shall not exceed the Total
Credit Commitment. Within such limits, the Borrower may borrow, repay
and reborrow hereunder, on a Business Day, from the Closing Date
until, but (as to borrowings and reborrowings) not including, the
Revolving Credit Termination Date; provided, however, that (y) no
Eurodollar Rate Revolving Loan shall be made which has an Interest
Period that extends beyond the Revolving Credit Termination Date and
(z) each Eurodollar Rate Revolving Loan may, subject to the provisions
of Section 5.5, be repaid only on the last day of the Interest Period
with respect thereto.
(b) Amounts. Each Revolving Loan made, Converted or
Continued, unless made in accordance with Section 3.2(e) hereof, shall
be in a principal amount of at least $500,000, and, if greater than
$500,000, an integral multiple of $50,000.
SECTION 3.2 ADVANCES AND RATE SELECTION.
(a) An Authorized Representative shall give the Agent (a)
irrevocable telephonic notice of each Eurodollar Rate Revolving Loan,
whether representing an additional Advance hereunder or the conversion
of borrowings hereunder from Base Rate Revolving Loans to Eurodollar
Rate Revolving Loans or the election of a subsequent Interest Period
for any Eurodollar Rate Revolving Loan, prior to 10:30 A.M. at least
three (3) Business Days prior to the day such Advance is to be made or
such Loan is to be Converted or Continued; and (b) irrevocable
telephonic notice of each Base Rate Revolving Loan representing an
additional Advance hereunder or the conversion of borrowings hereunder
from Eurodollar Rate Revolving Loans to Base Rate Loans prior to 10:30
A.M. on the day such Advance is to be made or such Loan is to be
converted. Each such notice, which shall be effective upon receipt by
the Agent, shall specify the amount of the Advance, the type of Loan
(Base Rate or Eurodollar Rate), the date of the Advance and, if a
Eurodollar Rate Revolving Loan, the Interest Period to be used in the
computation of interest. The Authorized Representative shall provide
the Agent written confirmation of each such telephonic notice no later
than 12:00 noon on the same day received by telefacsimile transmission
in the form of a Borrowing Notice for additional Advances, or in the
form of an Interest Rate Selection Notice (or
37
execution and return of a confirmatory writing prepared by the Agent)
for the selection or conversion of interest rates for outstanding
Revolving Loans, in each case with appropriate insertions, but failure
to provide such confirmation shall not affect the validity of such
telephonic notice.
(b) Notice of receipt of such Borrowing Notice or Interest
Rate Selection Notice, as the case may be, together with the amount of
each Lender's portion of an Advance requested thereunder, shall be
provided by the Agent to each Lender by telefacsimile transmission
with reasonable promptness, but (provided the Agent shall have
received such notice by 10:30 A.M.) not later than 12:00 noon on the
same day as the Agent's receipt of such notice.
(c) Not later than 2:00 P.M. on the date specified for each
borrowing under this Section 3.2, each Lender shall, pursuant to the
terms and subject to the conditions of this Agreement, make the amount
of the Advance or Advances to be made by it on such day available by
wire transfer to the Agent in the amount of its pro rata share,
determined according to such Lender's Applicable Commitment Percentage
of each Revolving Loan to be made on such day. Such wire transfer
shall be directed to the Agent at the Principal Office and shall be in
Dollars constituting immediately available funds. The amount so
received by the Agent shall, subject to the terms and conditions of
this Agreement, be made available to the Borrower by delivery of the
proceeds thereof to the Borrower's Account or otherwise as shall be
directed in the applicable Borrowing Notice by the Authorized
Representative and reasonably acceptable to the Agent.
(d) The Borrower shall have the option to elect the duration
of the initial and any subsequent Interest Periods and to convert the
Revolving Loans in accordance with Section 3.11 hereof. Eurodollar
Rate Revolving Loans and Base Rate Revolving Loans may be outstanding
at the same time, provided, however, there shall not be outstanding at
any one time Eurodollar Rate Revolving Loans and Eurodollar Rate
Segments having more than eight (8) Interest Periods. If the Agent
does not receive a notice of election of duration of an Interest
Period or to convert by the time prescribed hereby and by Section 3.11
hereof, the Borrower shall be deemed to have elected (i) with respect
to any Revolving Loan, to Convert to or Continue such Revolving Loan
as a Base Rate Loan until the Borrower otherwise notifies the Agent in
accordance herewith and with Section 3.11 hereof.
(e) Notwithstanding the foregoing, if a drawing is made under
any Letter of Credit prior to the Revolving Credit Termination Date,
notice of such drawing and resulting Reimbursement Obligation shall be
provided promptly by Issuing Bank to the Agent and the Agent shall
provide notice to each Lender and the Borrower by telephone. If such
notice to the Lenders of a drawing under any Letter of Credit is given
by the Agent at or before 1:00 p.m. on any Business Day, the Borrower
shall be deemed to have requested, and each Lender shall, pursuant to
the conditions of this Agreement, make an Advance in Dollars as a Base
Rate Loan under the Revolving Credit Facility in the amount of such
Lender's Applicable Commitment Percentage of such Reimbursement
Obligation and shall pay such amount to the Agent for the account of
Issuing Bank at the Principal Office in Dollars and in immediately
38
available funds before 2:30 P.M. on the same Business Day. If notice
to the Lenders is given by the Agent after 1:00 P.M. on any Business
Day, the Borrower shall be deemed to have requested, and each Lender
shall, pursuant to the terms and subject to the conditions of this
Agreement, make an Advance in Dollars as a Base Rate Loan under the
Revolving Credit Facility in the amount of such Lender's Applicable
Commitment Percentage of such Reimbursement Obligation and shall pay
such amount to the Agent for the account of Issuing Bank at the
Principal Office in Dollars and in immediately available funds before
12:00 noon on the next following Business Day. Such Base Rate Loan
shall continue unless and until the Borrower converts such Base Rate
Loan in accordance with the terms of Section 3.11 hereof.
SECTION 3.3 PAYMENT OF INTEREST.
(a) The Borrower shall pay interest to the Agent for the
account of each Lender on the outstanding and unpaid principal amount
of each Revolving Loan made by such Lender for the period commencing
on the date of such Revolving Loan until (but not including) the end
of the applicable Interest Period or the date such Revolving Loan
shall be due at the Eurodollar Rate or the Base Rate, as elected by
the Borrower in the applicable Borrowing Notice of Interest Rate
Selection notice or as deemed elected by the Borrower or otherwise
applicable to such Revolving Loan as provided herein; provided,
however, that if any amount shall not be paid when due (at maturity,
by acceleration or otherwise) or if any other Event of Default shall
have occurred and be continuing hereunder, all amounts outstanding
hereunder shall bear interest thereafter at the Default Rate from the
date such Event of Default occurred until the date such Event of
Default is cured or waived.
(b) Interest on the outstanding principal balance of each
Revolving Loan shall be computed on the basis of a year of 360 days
and calculated for the actual number of days elapsed. Interest on each
Revolving Loan shall be paid (i) with respect to Base Rate Revolving
Loans, quarterly in arrears on the last Business Day of each March,
June, September and December commencing March 1998, (ii) with respect
to Eurodollar Rate Revolving Loans, on the last day of the applicable
Interest Period for each Eurodollar Rate Revolving Loan and for any
Eurodollar Rate Revolving Loan having an Interest Period extending
beyond three (3) months, also on the date occurring every three (3)
months after the commencement of such Interest Period, and (iii) upon
payment in full of the principal amount of such Revolving Loan.
SECTION 3.4 PAYMENT OF PRINCIPAL.
(a) The principal amount of all Revolving Loans shall be due
and payable to the Agent for the benefit of each Lender in full on the
Revolving Credit Termination Date, or as otherwise expressly provided
herein. The principal amount of Base Rate Revolving Loans may be
prepaid in whole or in part at any time without premium or penalty.
The principal amount of Eurodollar Rate Revolving Loans may only be
prepaid at the end of the applicable Interest Period, unless the
Borrower shall pay to the Agent for the account of the Lenders the
amount, if any, required under Section 5.5 hereof.
39
(b) In the event any payment of principal is made prior to
the Revolving Credit Termination Date, an Authorized Representative
shall give the Agent irrevocable telephonic notice of any payment of a
Eurodollar Rate Revolving Loan prior to 10:30 A.M. at least three (3)
Business Days prior to the date such payment is to be made and of any
payment of a Base Rate Revolving Loan prior to 10:30 A.M. on the day
such payment is to be made. Written confirmation of each notice shall
be provided to the Agent in accordance with the terms therefor set
forth in Section 3.2(a) hereof with respect to Advances and the
selection of interest rates. Such notice shall specify (a) the date
the payment will be made, (B) the amount of such repayment and (C) the
Loan to which such payment relates. All prepayments made by the
Borrower shall be in the minimum amount of $500,000 or an integral
multiple of $50,000 in excess thereof, or such other amount as
necessary to comply with this Section 3.4 or with the covenants set
forth in Article XI hereof or the remaining principal amount
outstanding, if less than such amounts.
SECTION 3.5 MANNER OF PAYMENT.
(a) Each payment of principal (including any mandatory or
optional prepayment), interest and fees, and other amounts required to
be paid to the Lenders with respect to the Revolving Loans, shall be
made to the Agent at the Principal Office, for the account of each
Lender's applicable Lending Office, in Dollars, in immediately
available funds without setoff, deduction or counterclaim before 2:30
P.M. on the date such payment is due. The Agent may, but shall not be
obligated to, debit the amount of any such payment which is not made
by such time from any one or more ordinary deposit accounts, if any,
of the Borrower with the Agent.
(b) The Agent shall deem any payment by or on behalf of the
Borrower hereunder that is not made (i) in Dollars, (ii) in
immediately available funds and (iii) prior to 2:30 P.M. on the date
payment is due to be a non-conforming payment. Any such non-conforming
payment shall not be deemed to be received by the Agent until the time
such funds are paid in Dollars and become available funds. Any
non-conforming payment which conforms to clauses (i) and (ii) above
shall be deemed received by the Agent on the next Business Day. Any
non-conforming payment may constitute or become a Default or Event of
Default. The Agent shall give prompt notice to the Authorized
Representative and each of the Lenders (confirmed in writing) if any
payment (other than a prepayment) is non-conforming. Interest shall
continue to accrue on any principal as to which a non-conforming
payment is made until such funds become available funds (but in no
event less than the period from the date of such payment to the next
succeeding Business Day) at the Default Rate after the occurrence and
during the continuance of an Event of Default (other than with respect
to non-conforming prepayments, with respect to which interest shall
continue to accrue on any principal as to which such non-conforming
payment is made until such funds become available funds at the Base
Rate or the Eurodollar Rate, as applicable) from the date such amount
was due and payable until the date such amount is paid in full.
(c) In the event that any payment hereunder or under the
Revolving Notes becomes due and payable on a day other than a Business
Day, then such due date shall be
40
extended to the next succeeding Business Day unless provided otherwise
under clause (B) of the definition of "Interest Period;" provided that
interest shall continue to accrue during the period of any such
extension; and provided further, however, that in no event shall any
such due date be extended beyond the Revolving Credit Termination
Date.
SECTION 3.6 OPTIONAL PREPAYMENTS AND COMMITMENT REDUCTIONS. The
Borrower shall have the right from time to time (but not more frequently than
once during any fiscal quarter of the Borrower), upon not less than five (5)
Business Days written notice from an Authorized Representative to the Agent, to
reduce the Revolving Credit Commitment. The Agent shall give each Lender,
within one (1) Business Day, telephonic notice (confirmed in writing) of any
such reduction. Each such reduction shall be in the amount of $2,000,000 or an
integral multiple of $500,000 in excess thereof and shall permanently reduce
the Total Revolving Credit Commitment and the Revolving Credit Commitment of
each Lender pro rata. No such reduction shall be permitted that results in the
payment of any Eurodollar Rate Revolving Loan other than on the last day of the
Interest Period of such Loan unless such prepayment is accompanied by amounts
due, if any, under Section 5.5 hereof. Each reduction of the Revolving Credit
Commitment shall be accompanied by payment of the principal amount of the
Revolving Credit Outstandings to be so reduced pursuant to the notice delivered
in accordance with this Section 3.6 to the extent that the sum of all Revolving
Credit Outstandings and Letter of Credit Outstandings exceeds the Total
Revolving Credit Commitment after giving effect to such reduction, together
with accrued and unpaid interest on the amounts prepaid. A reduction of the
Total Revolving Credit Commitment to zero and payment by the Borrower of all
Obligations (including the payment of all Term Loan Outstandings and the
discharge of all obligations of Issuing Bank and the Lenders with respect to
Letters of Credit and Participations) shall, subject to the terms and
conditions of Section 15.7 hereof, be deemed a cancellation and termination of
this Agreement (other than with respect to Sections 4.2(g), 9.14, 13.7, 15.4
and 15.8 hereof, which shall survive any such termination).
SECTION 3.7 INCREASE AND DECREASE IN AMOUNTS. The amount of the
Revolving Credit Commitment which shall be available to the Borrower shall be
reduced by the aggregate amount of all Revolving Credit Outstandings and Letter
of Credit Outstandings and shall be reinstated (subject to Sections 3.4 and 3.6
hereof) as such Revolving Credit Outstandings and Letter of Credit Outstandings
are reduced.
SECTION 3.8 BORROWER'S ACCOUNT. The Borrower shall continuously
maintain the Borrower's Account until the Revolving Credit Termination Date.
SECTION 3.9 REVOLVING NOTES. Revolving Loans made by each Lender shall
be evidenced by a Revolving Note payable to the order of such Lender in the
amount of its Applicable Commitment Percentage of the Total Revolving Credit
Commitment, which Revolving Notes shall be dated the Closing Date or such later
date pursuant to an Assignment and Acceptance and shall be duly completed,
executed and delivered by the Borrower.
SECTION 3.10 PRO RATA PAYMENTS. Except as otherwise provided herein,
each payment and prepayment on account of the principal of and interest on the
Revolving Loans and the fees described in Section 3.12 hereof shall be made to
the Agent for the account of the Lenders in the
41
aggregate amount payable to the Lenders pro rata based on their Applicable
Commitment Percentages. All payments to be made by the Borrower for the account
of each of the Lenders on account of principal, interest and fees shall be made
without set-off or counterclaim. The Agent will promptly distribute such
payments received to the Lenders as provided for herein.
SECTION 3.11 CONVERSIONS AND ELECTIONS OF SUBSEQUENT INTEREST PERIODS.
(a) Upon irrevocable telephonic request, confirmed by
same-day delivery of a properly completed Interest Rate Selection
Notice by telefacsimile transmission to the Agent (or by execution and
return of a confirmatory writing prepared by the Agent), on or before
10:30 A.M. on any Business Day, the Borrower may convert all or a part
of Eurodollar Rate Revolving Loans to Base Rate Revolving Loans on the
last day of the Interest Period for such Eurodollar Rate Revolving
Loans; and
(b) Provided that no Default or Event of Default shall have
occurred and be continuing, the Borrower may upon irrevocable
telephonic request, confirmed by same-day delivery of a properly
completed Interest Rate Selection Notice by telefacsimile transmission
to the Agent (or by execution and return of a confirmatory writing
prepared by the Agent), on or before 10:30 A.M. on the date that is
three (3) Business Days prior to the date of a conversion:
(i) elect a subsequent Interest Period for all or a
portion of Eurodollar Rate Revolving Loans to begin on the
last day of the current Interest Period for such Eurodollar
Rate Revolving Loans; or
(ii) convert Base Rate Revolving Loans to Eurodollar
Rate Revolving Loans on any Business Day.
Each election and conversion pursuant to this Section 3.11 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in Sections 3.1, 3.2 and Article V hereof. All
such Continuations or Conversions of Loans shall be effected pro rata based on
the Applicable Commitment Percentages of the Lenders. The failure of the
Borrower to provide written confirmation of any telephonic notice of election
or conversion hereunder shall not affect the validity of such telephonic
notice.
SECTION 3.12 UNUSED FEE. For the period beginning on the Closing Date
and ending on the Revolving Credit Termination Date, the Borrower agrees to pay
to the Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a quarterly unused fee (the "Unused Fee") equal in
amount to the product of the Applicable Unused Fee multiplied by the average
daily amount by which Total Revolving Credit Commitment exceeds the sum of all
Revolving Credit Outstandings and all Letter of Credit Outstandings for such
period. Payments of the Unused Fee shall be due in arrears on the last Business
Day of each March, June, September and December for the three month period then
ended beginning March 1998 to and on the Revolving Credit Termination Date.
Notwithstanding the foregoing, so long as any Lender fails to make available
any portion of its Revolving Credit Commitment when requested, such Lender
shall not be entitled to
42
receive payment of its pro rata share of the Unused Fee until such Lender shall
make available such portion. The Unused Fee shall be calculated on the basis of
a year of 360 days for the actual number of days elapsed.
SECTION 3.13 ADDITIONAL FEES. In addition to any fees described above,
the Borrower agrees to pay to the Agent and Issuing Bank such other fees as may
be agreed to in a separate writing or writings.
SECTION 3.14 DEFICIENCY ADVANCES. No Lender shall be responsible for
any default of any other Lender (a "defaulting Lender") in respect of such
other Lender's obligation to make any Loan hereunder nor shall the Revolving
Credit Commitment of any Lender hereunder be increased as a result of such
default of any other Lender. Without limiting the generality of the foregoing,
in the event any Lender shall fail to advance funds to the Borrower as herein
provided, any other Lender (an "advancing Lender") may in its discretion, but
shall not be obligated to, advance under its Revolving Credit Commitment all or
any portion of such amount or amounts (each, a "deficiency advance") and shall
thereafter be entitled to payments of principal of and interest on such
deficiency advance in the same manner and at the same interest rate or rates to
which such defaulting Lender would have been entitled had it made such advance
under its applicable Revolving Credit Commitment; provided that, upon payment
to the advancing Lender from the defaulting Lender of the entire outstanding
amount of each such deficiency advance, together with accrued and unpaid
interest thereon, from the most recent date or dates interest was paid to the
advancing Lender by the Borrower on each Loan comprising the deficiency advance
at the interest rate per annum for overnight borrowing by the advancing Lender
from the Federal Reserve Bank, then such payment shall be credited against the
applicable Revolving Credit Commitment of the advancing Lender in full payment
of such deficiency advance and the Borrower shall be deemed to have borrowed
the amount of such deficiency advance from the defaulting Lender as of the most
recent date or dates, as the case may be, upon which any payments of interest
were made by the Borrower thereon.
SECTION 3.15 USE OF PROCEEDS. The Revolving Credit Facility shall be
used by the Borrower (i) to refinance certain existing indebtedness outstanding
and owing by the Borrower, (ii) for working capital, (iii) to finance capital
expenditures and acquisitions permitted hereunder, (iv) for other lawful
corporate purposes, and (v) to finance the acquisition of the shares of capital
stock of Voltarc not currently owned by the Borrower.
ARTICLE IV
LETTERS OF CREDIT
43
SECTION 4.1 LETTERS OF CREDIT. Issuing Bank agrees, subject to the
terms and conditions of this Agreement, upon request and for the account of
Borrower, to issue from time to time Letters of Credit upon delivery to Issuing
Bank of an Application and Agreement for Letter of Credit in form and content
reasonably acceptable to Issuing Bank; provided, that the Letter of Credit
Outstandings shall not exceed the Total Letter of Credit Commitment. No Letter
of Credit shall be issued by Issuing Bank with an expiry date or payment date
occurring subsequent to the fifth Business Day preceding the Revolving Credit
Termination Date. Issuing Bank shall not be required to issue any Letter of
Credit if, immediately after giving effect thereto, the sum of all Revolving
Credit Outstandings and Letter of Credit Outstandings would exceed the Total
Revolving Credit Commitment; provided that the Letters of Credit previously
issued may remain outstanding until their respective expiry dates.
SECTION 4.2 REIMBURSEMENT.
(a) The Borrower hereby unconditionally agrees immediately to
pay to Issuing Bank on demand at the Principal Office all amounts
required to pay all drafts drawn and honored under Letters of Credit
and all reasonable expenses incurred by Issuing Bank in connection
with Letters of Credit and in any event and without demand to place in
possession of Issuing Bank sufficient funds to pay all debts and
liabilities arising under any Letter of Credit; provided that to the
extent permitted by Section 3.2(e) hereof, such amounts shall be paid
pursuant to Advances under the Revolving Credit Facility. The
Borrower's obligation to pay Issuing Bank under this Section 4.2, and
Issuing Bank's right to receive such payment, shall be absolute and
unconditional and shall not be affected by any circumstance
whatsoever, including without limitation the unavailability of any
Advance under the Revolving Credit Facility. Issuing Bank shall give
the Borrower prompt written notice of any request for a draw under a
Letter of Credit. In the event an Advance under the Revolving Credit
Facility is not available, Issuing Bank may charge any account the
Borrower may have with it for any and all amounts Issuing Bank pays
under a Letter of Credit, plus charges and reasonable expenses as from
time to time agreed to by Issuing Bank and the Borrower. The Borrower
agrees to pay Issuing Bank interest on any amounts paid by the Issuing
Bank in connection with drafts drawn and honored under Letters of
Credit when due hereunder, and which is not paid pursuant to Advances
under the Revolving Credit Facility, or otherwise paid, as herein
contemplated, at the Default Rate from the date of such drawing to the
date such amount is paid in full.
(b) In accordance with the provisions of Section 3.2 hereof,
Issuing Bank shall notify the Agent and the Borrower of any drawing
under any Letter of Credit as promptly as practicable following the
receipt by Issuing Bank of such drawing.
(c) Each Lender (other than Issuing Bank) shall automatically
acquire on the date of issuance thereof a Participation in the
liability of Issuing Bank in respect of each Letter of Credit in an
amount equal to such Lender's Applicable Commitment Percentage of such
liability, and to the extent that the Borrower is obligated to pay
Issuing Bank under Section 4.2(a) hereof, each Lender (other than
Issuing Bank) thereby shall, as hereinafter described, absolutely,
unconditionally and irrevocably assume, and shall be unconditionally
obligated to
44
pay to Issuing Bank, its Applicable Commitment Percentage of the liability of
Issuing Bank under such Letter of Credit.
(i) Prior to the Revolving Credit Termination Date,
each Lender (other than Issuing Bank) shall, subject to the
terms and conditions of Article III, make a Revolving Loan
bearing interest at the Base Rate to the Borrower by paying
to the Agent for the account of Issuing Bank at the Principal
Office in Dollars and in immediately available funds an
amount equal to its Applicable Commitment Percentage of any
Reimbursement Obligation, all as described in and pursuant to
Section 3.2(e).
(ii) With respect to drawings under any Letter of
Credit for which a Revolving Loan is not made as set forth in
clause (i) above, each Lender (other than Issuing Bank) upon
receipt from the Agent of notice of a drawing in the manner
described in Section 3.2(e), shall promptly pay to the Agent
for the account of Issuing Bank, prior to the applicable time
set forth in Section 3.2(e) for the making of an Advance by
such Lender, its Applicable Commitment Percentage of such
drawing. Simultaneously with the making of each such payment
by a Lender to the Agent for the account of Issuing Bank,
such Lender shall, automatically and without any further
action on the part of Issuing Bank or such Lender, acquire a
Participation in an amount equal to such payment (excluding
the portion thereof constituting interest) in the related
Reimbursement Obligation of the Borrower.
(iii) Each Lender's obligation to make payment to
the Agent for the account of Issuing Bank pursuant to this
Section 4.2(c), and the right of Issuing Bank to receive the
same, shall be made without any offset, abatement,
withholding or reduction whatsoever. If any Lender is
obligated to pay but does not pay amounts to the Agent for
the account of the Issuing Bank in full upon such request as
required by this Section 4.2(c), such Lender shall, on
demand, pay to the Agent for the account of Issuing Bank
interest on the unpaid amount for each day during the period
commencing on the date of notice given to such Lender
pursuant to Section 4.2(c) hereof until such Lender pays such
amount to the Agent for the account of Issuing Bank in full
at the interest rate per annum for overnight borrowings by
Issuing Bank from the Federal Reserve Bank.
(iv) In the event the Lenders have purchased
Participations in any Reimbursement Obligation as set forth
in clause (ii) above, then at any time payment of such
Reimbursement Obligation, in whole or in part, is received by
Issuing Bank from the Borrower, Issuing Bank shall pay to
each Lender an amount equal to its Applicable Commitment
Percentage of such payment from the Borrower.
(d) Promptly following the end of each calendar month,
Issuing Bank shall deliver to the Agent, and the Agent shall deliver
to each Lender, a notice describing the aggregate undrawn amount of
all Letters of Credit at the end of such month. Upon the request of
any Lender from time to time, Issuing Bank shall deliver to the Agent,
and the Agent shall deliver
45
to such Lender, any other information reasonably requested by such
Lender with respect to Letter of Credit Outstandings.
(e) The issuance by Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in Section
7.2 hereof, be subject to the conditions that such Letter of Credit be
in such form and contain such terms as shall be reasonably
satisfactory to Issuing Bank consistent with the then current
practices and procedures of Issuing Bank with respect to similar
letters of credit, and the Borrower shall have executed and delivered
such other instruments and agreements relating to such Letters of
Credit as Issuing Bank shall have reasonably requested consistent with
such practices and procedures. All Letters of Credit shall be issued
pursuant to and subject to the Uniform Customs and Practice for
Documentary Credits, 1993 revision, International Chamber of Commerce
Publication No. 500 and all subsequent amendments and revisions
thereto.
(f) The Borrower agrees that Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter
of Credit, any drafts or other documents otherwise in order which may
be signed or issued by an administrator, executor, trustee in
bankruptcy, debtor in possession, assignee for the benefit of
creditors, liquidator, receiver, attorney in fact or other legal
representative of a party who is authorized under such Letter of
Credit to draw or issue any drafts or other documents.
(g) Without duplication of Section 15.8 hereof, the Borrower
hereby agrees to defend, indemnify and hold harmless Issuing Bank,
each other Lender and the Agent from and against any and all claims
and damages, losses, liabilities, reasonable costs and expenses which
Issuing Bank, such other Lender or the Agent may incur (or which may
be claimed against Issuing Bank, such other Lender or the Agent) by
any Person by reason of or in connection with the issuance or transfer
of or payment or failure to pay under any Letter of Credit; provided
that the Borrower shall not be required to indemnify Issuing Bank, any
other Lender or the Agent for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent,
caused by the willful misconduct or gross negligence of the party to
be indemnified. The provisions of this Section 4.2(g) shall survive
the Facility Termination Date.
(h) Without limiting Borrower's rights as set forth in
Section 4.2(g) above, the obligation of the Borrower to immediately
reimburse the Agent for drawings made under Letters of Credit shall be
absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement and such
Letters of Credit and the related Applications and Agreements for
Letters of Credit, notwithstanding the following circumstances:
(i) any lack of validity or enforceability of the
Letter of Credit, the obligation supported by the Letter of
Credit or any other agreement or instrument relating thereto
(collectively, the "Related Documents");
(ii) any amendment or waiver of or any consent to or
departure from all or any of the Related Documents;
46
(iii) the existence of any claim, setoff, defense or
other rights which the Borrower may have at any time against
any beneficiary or any transferee of a Letter of Credit (or
any Persons for whom any such beneficiary or any such
transferee may be acting), Agent, Lenders or any other
Person, whether in connection with the Loan Documents, the
Related Documents or any unrelated transaction;
(iv) any breach of contract or other dispute between
the Borrower and any beneficiary or any transferee of a
Letter of Credit (or any persons or entities for whom such
beneficiary or any such transferee may be acting), Agent,
Lenders or any other Person;
(v) any draft, statement or any other document
presented under the Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever; or
(vi) any delay, extension of time, renewal,
compromise or other indulgence or modification granted or
agreed to by Agent, with or without notice to or approval by
the Borrower in respect of any of Borrower's Obligations
under this Agreement.
SECTION 4.3 LETTER OF CREDIT FEE. The Borrower agrees to pay to the
Agent, (a) for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, quarterly in arrears on the last Business Day of each
March, June, September and December, beginning March 1998 a fee (i) for each
Standby Letter of Credit, equal to the product of the average daily amount
available to be drawn on such Letter of Credit during such three month period
multiplied by the Applicable Margin and (ii) for each Commercial Letter of
Credit, equal to the product of the stated amount of such Commercial Letter of
Credit outstanding during any portion of such three month period multiplied by
the Applicable Margin, and (b) for the Issuing Bank, .125% per annum based on
the aggregate amount available to be drawn on each outstanding Letter of
Credit. Such fees shall be calculated on the basis of a year of 360 days for
the actual number of days during which Letters of Credit are outstanding.
SECTION 4.4 ADMINISTRATIVE FEES. The Borrower shall pay to Issuing
Bank such administrative fee and other fees, if any, in connection with the
Letters of Credit in such amounts and at such times as Issuing Bank and the
Borrower shall agree from time to time.
ARTICLE V
CHANGE IN CIRCUMSTANCES
47
SECTION 5.1 INCREASED COST AND REDUCED RETURN.
(a) If, after the date hereof, any Lender shall have determined in
good faith that the adoption of any applicable law, rule, or regulation, or any
change in any applicable law, rule, or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank, or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office) with
any request or directive (whether or not having the force of law) of any such
Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with respect to any
Loan, its Note, or its obligation to make Loans, or change the basis
of taxation of any amounts payable to such Lender (or its Applicable
Lending Office) under this Agreement or its Note in respect of any
Loan (other than franchise taxes and taxes imposed on the overall
income of such Lender by the jurisdiction in which such Lender has its
principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment or similar requirement (other
than the Reserve Requirement utilized in the determination of the
Eurodollar Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Revolving
Credit Commitment and Term Loan Commitment of such Lender hereunder;
or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or on the London interbank market any other condition
affecting this Agreement or its Note or any of such extensions of
credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Loan or to reduce any sum received or receivable by such Lender
(or its Applicable Lending Office) under this Agreement or its Note with
respect to any Loan, then the Borrower shall pay to such Lender on demand such
amount or amounts as will compensate such Lender for such increased cost or
reduction. If any Lender requests compensation by the Borrower under this
Section 5.1(a) the Borrower may, by notice to such Lender (with a copy to the
Agent), suspend the obligation of such Lender to make or Continue Loans of the
Type with respect to which such compensation is requested, or to Convert Loans
of any other Type into Loans of such Type, until the event or condition giving
rise to such request ceases to be in effect (in which case the provisions of
Section 5.4 shall be applicable); provided that such suspension shall not
affect the right of such Lender to receive the compensation so requested.
(b) If, after the date hereof, any Lender shall have determined that
the adoption of any applicable law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any Governmental Authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such Governmental Authority,
48
central bank, or comparable agency, has or would have the effect of reducing
the rate of return on the capital of such Lender or any corporation controlling
such Lender as a consequence of such Lender's obligations hereunder to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change, request, or directive (taking into consideration its
policies with respect to capital adequacy), then from time to time upon demand
the Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender on an after-tax basis for such reduction.
(c) Each Lender shall promptly notify the Borrower and the Agent in
writing of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Lender to compensation pursuant to this Section
5.1 and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise disadvantageous to
it. Any Lender claiming compensation under this Section 5.1 shall furnish to
the Borrower and the Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
SECTION 5.2 LIMITATION ON TYPES OF LOANS. If on or prior to the first
day of any Interest Period for any Eurodollar Rate Loan:
(a) the Agent reasonably determines (which determination
shall be conclusive) that by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the Interbank Offered Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall
be conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding such
Eurodollar Rate Loans for such Interest Period;
then the Agent shall give the Borrower prompt written notice thereof specifying
the relevant Type of Loans and the relevant amounts or periods, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Loans of such Type, Continue Loans of such Type, or to Convert
Loans of any other Type into Loans of such Type and the Borrower shall, on the
last day of the then current Interest Period for each outstanding Loan of the
affected Type, either prepay such Loan or Convert such Loan into another Type
of Loan in accordance with the terms of this Agreement.
SECTION 5.3 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund any Eurodollar Rate Loans
hereunder, then such Lender shall promptly notify the Borrower thereof and such
Lender's obligation to make or Continue Eurodollar Rate Loans and to Convert
other Types of Loans into Eurodollar Rate Loans shall be terminated until such
time as such Lender may again make, maintain, and fund Eurodollar Rate Loans
(in which case the provisions of Section 5.4 shall be applicable).
49
SECTION 5.4 TREATMENT OF AFFECTED LOANS. If the obligation of any
Lender to make a Eurodollar Rate Loan or to Continue, or to Convert Loans of
any other Type into, Eurodollar Rate Loans shall be suspended pursuant to
Section 5.1 or 5.3 hereof (Loans of such Type being herein called "Affected
Loans" and such Type being herein called the "Affected Type"), such Lender's
Affected Loans shall be automatically Converted into Base Rate Loans on the
last day(s) of the then current Interest Period(s) for Affected Loans (or, in
the case of a Conversion required by Section 5.3 hereof, on such earlier date
as such Lender may specify in writing to the Borrower with a copy to the Agent)
and, unless and until such Lender gives written notice as provided below that
the circumstances specified in Section 5.1 or 5.3 hereof that gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Lender as Loans of the Affected Type shall be made or Continued
instead as Base Rate Loans, and all Loans of such Lender that would
otherwise be Converted into Loans of the Affected Type shall be
Converted instead into (or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 5.1 or 5.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 5.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Revolving
Credit Commitments.
SECTION 5.5 COMPENSATION. Upon the request of any Lender, the Borrower
shall pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar
Rate Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 12.1) on a date other
than the last day of the Interest Period for such Loan; or
(b) any failure by a Borrower for any reason (including,
without limitation, the failure of any condition precedent specified
in Article VII to be satisfied) to borrow, Convert, Continue, or
prepay a Eurodollar Rate Loan on the date for such borrowing,
Conversion, Continuation, or prepayment specified in the relevant
notice of borrowing, prepayment, Continuation, or Conversion under
this Agreement.
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SECTION 5.6 TAXES. (a) Any and all payments by the Borrower to or for
the account of any Lender or the Agent hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender (or its
Applicable Lending Office) or the Agent (as the case may be) is organized or
any political subdivision thereof, other than to the extent such income or
franchise tax is imposed solely as a result of the activities of the Agent or a
Lender pursuant to or in respect of this Agreement or any of the other Loan
Documents (all such non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"Taxes"). If a Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable under this Agreement or any other Loan Document to
any Lender or the Agent, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 5.6) such Lender or the Agent
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Borrower shall make such deductions, (iii) such
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law, and (iv) such Borrower
shall furnish to the Agent, at its address referred to in Section 15.1, the
original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this
Agreement or any other Loan Document or from the execution or delivery of, or
otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 5.6) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and
on or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the
Borrower or the Agent (but only so long as such Lender remains lawfully able to
do so), shall provide the Borrower and the Agent with (i) Internal Revenue
Service Form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender is entitled to
benefits under an income tax treaty to which the United States is a party which
eliminates withholding tax on payments of interest or certifying that the
income receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States, (ii) Internal Revenue
Service Form W-8 or W-9, as appropriate, or any successor form prescribed by
the Internal Revenue Service, and (iii) any other form or certificate required
by any taxing authority (including any certificate required by Sections 871(h)
and 881(c) of the Internal Revenue Code), certifying that such Lender
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is entitled to an exemption from tax on payments pursuant to this Agreement or
any of the other Loan Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Agent with the appropriate form pursuant to
Section 5.6(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under Section 5.6(a) or 5.6(b) with respect to Taxes imposed by the United
States; provided, however, that should a Lender, which is otherwise exempt from
or subject to a reduced rate of withholding tax, become subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower shall
take such steps as such Lender shall reasonably request to assist such Lender
to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 5.6, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes,
the applicable Borrower shall furnish to the Agent the original or a certified
copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 5.6 shall survive the Facility Termination Date.
ARTICLE VI
SECURITY
SECTION 6.1 Security Interest. As security for the full and timely
payment and performance of all Obligations, and as a continuation of the
security interests and rights granted by the Borrower and its Material
Subsidiaries under the Existing Credit Agreement and the Security Instruments
(as defined therein), the Borrower shall, and shall cause each Domestic
Subsidiary to, on or before the Closing Date deliver to the Agent, in form and
substance reasonably acceptable to the Agent, the Security Agreement, the
Intellectual Property Security Agreement, the Deed of Trust, the Deed of Trust
Modification, the Landlord Waivers, the Intellectual Property Assignments and
such duly executed and filed Uniform Commercial Code financing statements
sufficient to grant to the Agent a valid, duly perfected security interest in
the Collateral described therein, subject to no prior Liens other than
Permitted Liens, and do all things necessary in the opinion of the Agent and
its counsel to grant to and continue with the Agent for the benefit of the
Lenders a first priority security interest, duly perfected with respect to
Collateral governed by the UCC, in all Collateral subject to no prior Lien or
other encumbrance or restriction on transfer (other than restrictions on
transfer imposed by applicable securities laws and Permitted Liens).
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The foregoing security shall continue to ratably secure the Facilities
and all Swap Agreements, subject to certain restrictions contained herein.
SECTION 6.2 STOCK PLEDGE. As security for the full and timely payment
and performance of all Obligations now existing or hereafter arising, and
certain Guarantors' obligations under the Guaranty and as a continuation of the
security interests and rights granted under the Existing Credit Agreement and
the Stock Pledge Agreement (as defined therein), the Borrower and each Domestic
Subsidiary owning any Pledged Stock shall on or before the Closing Date deliver
to the Agent, in form and substance reasonably acceptable to the Agent, the
Stock Pledge Agreement together with certificates representing such Pledged
Stock and such stock powers duly executed in blank as may be required by the
Agent in accordance with the terms hereof and thereof. In addition to any Stock
Pledge Agreement required to be delivered pursuant to Section 9.21 hereof, the
Borrower and each Subsidiary hereby agree to pledge to the Agent for the
benefit of the Lenders (i) 100% of the capital stock and related interests and
rights directly or indirectly owned by the Borrower of any Domestic Subsidiary
or Domestic Control Subsidiary hereafter acquired or created, (ii) 65% of the
Voting Stock and 100% of the non-voting common stock and related interests and
rights directly or indirectly owned by the Borrower of any Direct Foreign
Subsidiary or Direct Foreign Control Subsidiary hereafter acquired or created
and (iii) 100% of the capital stock and related interests and rights directly
or indirectly owned by the Borrower of any Foreign Subsidiary or Foreign
Control Subsidiary of the Borrower to the extent such action would not result
in any material adverse tax impact on the Borrower and, in each case, to
deliver to the Agent a Stock Pledge Agreement substantially in the form of
Exhibit G hereto within thirty (30) days of the acquisition or creation of such
Subsidiary.
The foregoing security shall continue to ratably secure the Facilities
and all Swap Agreements, subject to certain restrictions contained herein.
SECTION 6.3 GUARANTY. To guarantee the full and timely payment and
performance of all Obligations now existing or hereafter arising, the Borrower
shall cause the Guaranty to be delivered by each Material Subsidiary, in form
and substance reasonably acceptable to the Agent, on or before the Closing
Date. The Borrower hereby agrees to cause a Guaranty to be delivered by any
hereafter acquired, created or arising (i) Material Subsidiary and (ii) Foreign
Subsidiary to the extent such Foreign Subsidiary would be a Material Subsidiary
but for the fact that it is a Foreign Subsidiary and such action would not
result in any material adverse tax impact on the Borrower.
SECTION 6.4 DEED OF TRUST. As security for the full and timely payment
and performance of all Obligations now existing or hereafter arising, the
Borrower shall cause the Deed of Trust and the Deed of Trust Modification to be
delivered to the Agent on the Closing Date and thereafter the Borrower shall
cause to be delivered to the Agent Deeds of Trust with respect to any material
real property that is acquired by the Borrower or any Material Subsidiary, in
form and substance reasonably acceptable to the Agent. With respect to any Deed
of Trust (other than the Deed of Trust for the Azusa Property), the Agent and
the Lenders hereby acknowledge and agree that such Deeds of Trust will not be
filed with any Governmental Authority for the purpose of establishing the
priority of the Liens evidenced thereby unless the Consolidated Leverage Ratio
as set
53
forth in the compliance certificate most recently delivered pursuant to Section
9.1(a) or (b) hereof shall be .25 to 1.00 less than the ratio required under
Section 11.3 hereof and the Agent elects to file such Deed of Trust (a "Filing
Election"). Upon the occurrence of a Filing Election, the Borrower shall
deliver to the Agent all environmental reports, title insurance, appraisals,
surveys, legal opinions and other certificates and documents reasonably
requested by the Agent, including any amendments to the Deed of Trust required
to conform such document to the agreement intended by the parties and shall pay
all fees and expenses associated with the recording of the Deed of Trust with
the appropriate governmental authority.
SECTION 6.5 INTELLECTUAL PROPERTY. As security for the full and timely
payment and performance of all Obligations now existing or hereafter arising,
the Borrower and each Domestic Subsidiary owning any material patents, patent
applications, trademarks, trademark registrations and applications therefor,
copyrights, copyright registrations and applications therefore or any other
material intellectual property, shall deliver to the Agent for the benefit of
the Lenders the Intellectual Property Security Agreements and the Intellectual
Property Assignments and opinions of counsel to the Borrower and such Domestic
Subsidiary in any appropriate jurisdiction designated by the Agent as to the
validity and enforceability of such agreements and such other legal matters as
the Agent reasonably requests, in form and substance reasonably acceptable to
the Agent and the Lenders. In addition to any Intellectual Property Security
Agreement required to be delivered pursuant to Section 9.21 hereof, the
Borrower hereby agrees to pledge, or cause to be pledged, all intellectual
property interests and licenses hereafter acquired or created and owned by the
Borrower or any Domestic Subsidiary within thirty (30) days of the acquisition
or creation of such intellectual property or license.
SECTION 6.6 INFORMATION REGARDING COLLATERAL. THE BORROWER REPRESENTS,
WARRANTS AND COVENANTS THAT (A) THE CHIEF EXECUTIVE OFFICE OF THE BORROWER AND
EACH GUARANTOR AT THE CLOSING DATE IS LOCATED AT THE ADDRESS OR ADDRESSES
SPECIFIED ON SCHEDULE 6.6, AND (B) SCHEDULE 6.6 CONTAINS A TRUE AND COMPLETE
LIST OF (I) THE LEGAL NAME AND ADDRESS OF THE BORROWER AND EACH GUARANTOR AND
OF EACH OTHER PERSON THAT HAS EFFECTED ANY MERGER OR CONSOLIDATION WITH THE
BORROWER OR A GUARANTOR OR CONTRIBUTED OR TRANSFERRED TO THE BORROWER OR A
GUARANTOR ANY SIGNIFICANT PORTION OF ITS ASSETS CONSTITUTING COLLATERAL AT ANY
TIME SINCE JANUARY 1, 1993 (EXCLUDING PERSONS MAKING SALES IN THE ORDINARY
COURSE OF THEIR BUSINESSES TO THE BORROWER OR A GUARANTOR OF PROPERTY
CONSTITUTING INVENTORY IN THE HANDS OF SUCH SELLER), (II) EACH LOCATION AT
WHICH GOODS CONSTITUTING COLLATERAL ARE NOW LOCATED (TOGETHER WITH THE NAME OF
EACH OWNER OF THE PROPERTY LOCATED AT SUCH ADDRESS IF NOT THE BORROWER OR THE
APPLICABLE GUARANTOR, AND A SUMMARY DESCRIPTION OF THE RELATIONSHIP BETWEEN THE
APPLICABLE GUARANTOR AND SUCH PERSON), AND (III) EACH CURRENTLY USED TRADE
STYLE AND EACH TRADE NAME USED BY THE BORROWER OR ANY GUARANTOR SINCE JANUARY
1, 1993 AND THE PURPOSES FOR WHICH IT WAS USED. BORROWER SHALL NOT CHANGE, AND
SHALL NOT PERMIT ANY OTHER GUARANTOR TO CHANGE, THE LOCATION OF ITS CHIEF
EXECUTIVE OFFICE OR ANY LOCATION SPECIFIED IN CLAUSE (II) OF THE IMMEDIATELY
PRECEDING SENTENCE, OR USE OR PERMIT ANY GUARANTOR TO USE, ANY ADDITIONAL TRADE
STYLE, EXCEPT UPON GIVING NOT LESS THAN THIRTY (30) DAYS' PRIOR WRITTEN NOTICE
TO THE AGENT AND TAKING OR CAUSING TO BE TAKEN ALL SUCH ACTION AT BORROWER'S OR
SUCH OTHER GUARANTOR'S EXPENSE AS MAY BE REASONABLY REQUESTED BY THE AGENT TO
PERFECT OR MAINTAIN THE PERFECTION OF THE LIEN OF THE AGENT IN COLLATERAL.
54
SECTION 6.7 FURTHER ASSURANCES. At the request of the Agent, the
Borrower will, and will cause each Subsidiary to, execute by its duly
authorized officers, alone or with the Agent, any certificate, instrument,
statement or document and will procure any such certificate, instrument,
statement or document (and pay all connected costs) which the Agent reasonably
deems necessary to create or preserve the Liens (and the perfection and
priority thereof) of the Agent for the benefit of the Lenders contemplated
hereby and by the other Loan Documents and specifically including all
Collateral acquired by the Borrower or any Guarantor after the Closing Date.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1 EFFECTIVENESS; CONDITIONS TO ADVANCES AND ISSUANCE OF
LETTERS OF CREDIT. The effectiveness of this Agreement and the obligation of
the Lenders to make the Term Loan and to make further Advances of the Revolving
Loans and of Issuing Bank to continue to issue Letters of Credit is subject to
the satisfaction of the following conditions:
(a) the Agent shall have received on or before the Closing
Date, in form and substance satisfactory to the Agent and Lenders, the
following:
(i) executed originals of this Agreement and each of
the other Loan Documents, together with all schedules and
exhibits thereto;
(ii) favorable written opinions of counsel to the
Borrower and each Material Domestic Subsidiary granting any
security interest or Lien to the Agent for the benefit of the
Lenders in any Collateral (including opinions of local U.S.
counsel and local counsel in the United Kingdom (with respect
to the Share Mortgage)) dated the Closing Date, addressed to
the Agent and the Lenders and reasonably satisfactory to
Xxxxx Xxxxx Mulliss & Xxxxx, L.L.P., special counsel to the
Agent, substantially in the forms set forth in Exhibit N
attached hereto and incorporated herein by reference;
(iii) resolutions of the board of directors or other
appropriate governing body (or of the appropriate committee
thereof) of the Borrower, certified by its vice president,
secretary or assistant secretary or other appropriate officer
as of the Closing Date, appointing the initial Authorized
Representative and approving and adopting the Loan Documents
to be executed by such Person, and authorizing the execution,
delivery and performance thereof;
(iv) resolutions of the board of directors or other
appropriate governing body (or of the appropriate committee
thereof) of each Guarantor, certified by its secretary,
assistant secretary, vice president or other appropriate
officer as of the Closing Date approving and adopting the
Loan Documents to be executed on behalf of such Guarantor and
authorizing the execution, delivery and performance thereof;
55
(v) specimen signatures of officers of the Borrower
executing the Loan Documents on behalf of the Borrower,
certified by the secretary, assistant secretary, vice
president or other appropriate officer of the Borrower;
(vi) specimen signatures of officers of each
Guarantor executing the Loan Documents on behalf of such
Guarantor, certified by the secretary, assistant secretary,
vice president or other appropriate officer of such
Guarantor;
(vii) certificate of the Borrower and each Guarantor
as to the effectiveness of the Organizational Documents and
Operating Documents of the Borrower and each Guarantor;
(viii) with respect to the Borrower and each
Guarantor, certificates issued as of a recent date by the
Secretary of State or other appropriate Governmental
Authority of its jurisdiction of incorporation as to its due
existence and good standing therein;
(ix) with respect to the Borrower and each
Guarantor, appropriate certificates of qualification to do
business, good standing and, where appropriate, authority to
conduct business under assumed name, issued as of a recent
date by the Secretary of State or other appropriate
Governmental Authority of each jurisdiction in which the
failure to be qualified to do business or authorized so to
conduct business would reasonably be expected to result in a
Material Adverse Effect;
(x) stock certificates representing all of the
shares of Pledged Stock with undated stock powers executed in
blank for each certificate;
(xi) notice of appointment of the initial Authorized
Representative of the Borrower in the form of Exhibit C
hereto;
(xii) certificate of an Authorized Representative
dated the Closing Date demonstrating compliance with the
financial covenants contained in Article XI hereof, all as of
the immediately preceding Determination Date, substantially
in the form of Exhibit O attached hereto;
(xiii) evidence of insurance required by the Loan
Documents other than policies for director and officer
indemnification insurance and immaterial policies issued to
Subsidiaries;
(xiv) Owner's Affidavits from ILC with respect to
the Sunnyvale Property and the Santa Xxxxx Property;
(xv) environmental and title information with
respect to the Sunnyvale Property and the Santa Xxxxx
Property, as reasonably requested by the Agent;
56
(xvi) Landlord Waivers for each of the Borrower's or
any Subsidiary's leased facilities;
(xvii) financial statements of the Borrower and its
Subsidiaries required to be delivered pursuant to Section 8.6
hereof, historical pro forma financial statements as at and
for the fiscal year ended December 31, 1997 of the Borrower
and its Subsidiaries on a consolidated basis giving effect to
the Merger and the transactions contemplated thereby and pro
forma financial statements and projections of the Borrower
and its Subsidiaries on a consolidated basis for the first
Four-Quarter Period of the Borrower following the Closing
Date and completion of the Merger;
(xviii) financial statements of ILC for the fiscal
year 1997 and the three month period ended December 31, 1997,
including balance sheets, income and cash flow statements
prepared in conformity with GAAP and, with respect to the
financial statements for fiscal year 1997, certified by
independent public accountants of recognized national
standing with an unqualified opinion;
(xix) the latest two federal income tax returns of
ILC;
(xx) a Borrowing Notice or Interest Rate Selection
Notice;
(xxi) all fees payable by the Borrower on the
Closing Date to the Agent, Issuing Bank and the Lenders;
(xxii) UCC-1 Financing Statements, duly executed by
the Borrower and each of the Guarantors and in proper form
for filing, for all locations required by applicable law to
perfect the lien of the Agent and the Lenders under the
Security Agreement as a first priority lien as to items of
Collateral in which a security interest may be perfected by
the filing of financing statements;
(xxiii) a certificate of an Authorized
Representative of the Borrower reasonably satisfactory to the
Agent and the Lenders as to the matters set forth in Section
7.1(b)(ii) through (iv), 7.1(c)(i) and (vi) and 7.1(d)(i)
through (iv) below;
(xxiv) pay off letter or other evidence satisfactory
to the Agent of the payment of all amounts outstanding under,
release of any Liens or security interests granted in
connection with the termination of the existing ILC Credit
Facilities.
(xxv) such other documents, instruments,
certificates and opinions as the Agent or any Lender may
reasonably request on or prior to the Closing Date in
connection with the consummation of the transactions
contemplated hereby.
(b) Each of the following shall have occurred or be true:
57
(i) The Agent and NMS shall have completed all due
diligence with respect to the Borrower and its Subsidiaries,
ILC and its subsidiaries and the Merger in scope and
determination satisfactory to the Agent and NMS in their sole
discretion;
(ii) There shall not be any action, suit,
investigation or proceeding pending or threatened in any
court or before any arbitrator or governmental
instrumentality that (a) purports to affect the transactions
contemplated hereby (including the Merger or the Spin-Off),
(b) would reasonably be expected to have a material adverse
effect on the financings or any other transactions
contemplated hereby (including the Merger or the Spin-Off),
on the Borrower or its Subsidiaries, or on ILC or its
subsidiaries or (c) would reasonably be expected to have a
material adverse effect on the ability of the parties hereto
and thereto to perform their obligations hereunder or under
the Merger Agreement ;
(iii) The Borrower shall be in compliance with all
existing financial and material contractual obligations
before and immediately after giving effect to the financings
and other transactions contemplated hereby;
(iv) The Borrower, its Domestic Subsidiaries and
each Direct Foreign Subsidiary shall have received all
government, shareholder and third-party approvals, consents
and waivers, and shall have made or given all necessary
filings and notices, as shall be required to consummate the
transactions contemplated hereby without the occurrence of
any default under, conflict with or violation of (A) any
applicable law, rule, regulation, order or decree of any
court or other Governmental Authority or arbitral authority,
(B) any Organizational Document or Operating Agreements of
the Borrower or any Subsidiary or (C) any agreement, document
or instrument to which any of the Borrower or any Domestic
Subsidiary or any Direct Foreign Subsidiary is a party or by
which any of them or their properties is bound, if such
default, conflict or violation would reasonably be expected
to result in a Material Adverse Effect; and all applicable
waiting periods shall have expired without any action being
taken or threatened in writing by any authority that could
restrain, prevent or impose any material adverse conditions
on the making of the Term Loan or the Revolving Loans, or
other transactions contemplated hereby, and no law or
regulation shall be applicable which would reasonably be
expected to have a Material Adverse Effect;
(c) In the good faith judgment of the Agent and the Lenders:
(i) There shall not have occurred a material adverse
change in the business, assets, revenues, operations, or
condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole since December 31, 1996 or in
the assumptions, facts or information contained in the
financial statements, budgets, projections or pro forma
balance sheets most recently delivered to the Agent by the
Borrower;
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(ii) There shall not have occurred and be continuing
a material adverse change in the market for syndicated credit
facilities similar in nature to the Facilities or a material
disruption of, or a material adverse change in, financial,
banking or capital market conditions, in each case as
determined by the Agent in its reasonable discretion;
(iii) All financial reports received by the Agent
with respect to the Borrower and the reasonableness and
accuracy of all financial projections shall be reasonably
satisfactory;
(iv) The terms and conditions of all shares of
Series A Preferred Stock not exchanged by the holders
thereof, the 8% Convertible Subordinated Notes due 2002 of
the Borrower (the "Convertible Notes") not converted by the
holders thereof, and all other preferred stock and senior or
subordinated debt constituting the capital structure of the
Borrower, including without limitation any issued with
respect to the Merger, shall be in form and substance
satisfactory to NMS, the Agent and Lenders;
(v) There not having occurred and being continuing
since the date hereof a material adverse change in
governmental regulation or policy affecting NationsBank, NMS,
the Borrower, ILC or the Merger, and no litigation or other
action is pending or threatened seeking an injunction,
damages or relief relating to the Facilities or the related
transactions contemplated in conjunction with the Merger; and
(vi) The Spin-Off shall have been consummated upon
terms satisfactory to the Agent and the Lenders.
(d) With respect to the Merger:
(i) the total consideration paid to the
shareholders of ILC in connection with the Merger shall only
be shares of common stock of the Borrower (other than cash
paid in lieu of issuance of fractional shares);
(ii) there shall not have occurred since September
30, 1997 any change in the business, assets, condition
(financial or otherwise) or income or cash flow of ILC or in
the facts and information relating to ILC that would
reasonably be expected to have a material adverse effect on
the business, properties, operations or condition, financial
or otherwise, of ILC;
(iii) the Merger shall not have a Material Adverse
Effect on the Borrower and its Subsidiaries;
(iv) all conditions precedent of BEC Group, Inc. to
the consummation of the Merger as set forth in the Merger
Agreement have been satisfied or waived with the reasonable
approval of the Agent and the certificates of merger for
California and
59
Delaware have been filed on or before the Closing Date, after
which the Merger will be effective;
(v) the Agent shall have received favorable written
opinions of counsel to the Borrower or ILC as to the due
organization and valid existence of ILC, that all corporate
actions have been taken and all approvals obtained by ILC
authorizing the execution and performance of the Merger
Agreement, that the Merger Agreement has been duly executed
and is binding upon and enforceable against ILC, and such
other matters relating to the Merger as may be reasonably
requested by the Agent dated the Closing Date, addressed to
the Agent and the Lenders and reasonably satisfactory to
Xxxxx Xxxxx Mulliss & Xxxxx, L.L.P., special counsel to the
Agent.;
(vi) the Agent shall have received a copy of the
fully executed Merger Agreement and all other related
documents, instruments and agreements requested by the Agent
certified as true and complete by an Authorized
Representative and the Merger Agreement and all related
documents, instruments and agreements shall not have been
amended in form or substance not acceptable to the Agent and
the Lenders;
(vii) the Agent and NMS shall have completed all due
diligence deemed necessary with respect to the business,
operations, financial conditions and prospects of ILC.
SECTION 7.2 CONDITIONS OF ALL ADVANCES AND ISSUANCES OF LETTERS OF
CREDIT AFTER THE CLOSING DATE. The obligations of the Lenders to make any
Advance or to Convert or Continue the interest rates thereof pursuant to
Sections 2.9 or 3.11 (other than any Conversion required by Sections 5.1, 5.2
or 5.3 hereof), and of Issuing Bank to issue Letters of Credit hereunder, on or
subsequent to the Closing Date are subject to the satisfaction of the following
conditions:
(a) the Agent shall have received a notice of such borrowing
or request as required by Section 3.1 hereof;
(b) the representations and warranties of the Borrower set
forth in Article VIII hereof and in each of the other Loan Documents
shall be true and correct in all material respects on and as of the
date of such Advance, Conversion, Continuation or issuance of such
Letters of Credit, as the case may be, with the same effect as though
such representations and warranties had been made on and as of such
date, except (i) to the extent that such representations and
warranties expressly relate to an earlier date, (ii) that the
representations and warranties set forth in Section 8.4 and 8.5 shall
be deemed to include and take into account any merger or consolidation
permitted under Section 10.4 hereof or otherwise permitted in
accordance with the terms hereof, and (iii) that the financial
statements referred to in Section 8.6(a) shall be deemed to be those
financial statements most recently delivered to the Agent and the
Lenders pursuant to Section 9.1 hereof;
(c) in the case of the issuance of a Letter of Credit,
Borrower shall have executed and delivered to Issuing Bank an
Application and Agreement for Letter of Credit in form and
60
content reasonably acceptable to Issuing Bank together with such other
instruments and documents as it shall reasonably request;
(d) at the time of each such Advance, Conversion,
Continuation or issuance of each Letter of Credit, as the case may be,
no Default or Event of Default shall have occurred and be continuing
or result therefrom;
(e) immediately after issuing any Letter of Credit, the
aggregate Letter of Credit Outstandings shall not exceed the Total
Letter of Credit Commitment; and
(f) immediately after giving effect to any Revolving Loan or
Letter of Credit, the sum of all Revolving Credit Outstandings and all
Letter of Credit Outstandings shall not exceed the Total Revolving
Credit Commitment.
(g) in addition to the requirements of Section 10.3 hereof,
in the event the proceeds of such Advance under the Revolving Credit
Facility are to be used to finance any part of the Cost of Acquisition
of an Acquisition, the Agent and each Lender shall have received not
less than fifteen (15) Business Days prior to the date such Advance is
to be made:
(i) historical audited financial statements of the
Person to be acquired (or, if audited statements of such
Person have not been prepared prior to such Acquisition in
its normal course of business, the financial statements of
such Person that have been prepared) for its two (2) most
recently completed fiscal years, including consolidated
balance sheets as of the end of each such year and related
consolidated statements of operations, and, if available,
cash flows and shareholders' equity for each such year;
provided, however, that in the case of certain asset
acquisitions for which there are no corresponding financial
statements, this clause (i) will not apply;
(ii) a consolidated pro forma balance sheet of the
Borrower and its Subsidiaries and related pro forma
consolidated statement of operations, in each case giving
effect to such Acquisition, as of the end of the most
recently completed Fiscal Year and in form and substance
reasonably acceptable to the Agent;
(iii) consolidated financial projections on a pro
forma basis for the Borrower and its Subsidiaries giving
effect to such Acquisition for the three-year period
immediately following the consummation of such Acquisition,
in form and substance reasonably acceptable to the Agent;
provided, however, that in no event shall delivery of such
projections constitute a representation or warranty of the
Borrower that its consolidated financial results for, and
consolidated financial condition at the end of, the period
for which such projections were prepared shall meet or exceed
such projections; and
(iv) a certificate of an Authorized Representative
as to the absence of any Default or Event of Default and
demonstrating compliance with Article IX of this
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Agreement, in each case for the most recently ended fiscal
quarter after giving effect to such Acquisition on a pro
forma basis;
and in the event the Required Lenders shall fail to give written
notice to the Borrower of any objection to the form or substance of
such financial statements and certificate within ten (10) Business
Days following receipt thereof, the same shall be deemed acceptable to
the Agent and the Lenders. In addition, the Agent and the Lenders
shall receive copies of the principal documents relating to such
Acquisition, to the extent the same are available, together with the
financial information described in clauses (i) through (iv) above or
as soon thereafter as practicable.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
All Subsidiaries acquired in connection with the Merger and as to
which the representations and warranties referenced in Section 8.20 hereof are
applicable shall be deemed excluded from the meaning of the terms "Subsidiary"
and "Subsidiaries" for the purposes of making the representations and
warranties contained in this Article VIII (other than Section 8.20 hereof) on
the Closing Date only. Such Subsidiaries shall be included in the meanings of
such terms at all times after the Closing Date that the representations and
warranties contained in this Article VIII are given.
The Borrower represents and warrants (which representations and
warranties shall survive the delivery of the documents mentioned herein and the
making of Loans and issuance of Letters of Credit) with respect to itself and
to its Subsidiaries as follows:
SECTION 8.1 ORGANIZATION AND AUTHORITY.
(a) The Borrower and each Subsidiary is a corporation duly
organized and validly existing under the laws of the jurisdiction of
its incorporation;
(b) the Borrower and each Subsidiary (i) has the requisite
power and authority to own its properties and assets and to carry on
its business as now being conducted and as contemplated in the Loan
Documents, and (ii) is qualified to do business in every jurisdiction
in which it conducts business except where the failure so to qualify
would not have a Material Adverse Effect;
(c) the Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party;
(d) each Guarantor has the power and authority to execute,
deliver and perform the Guaranty and the Security Agreement and to
execute, deliver and perform each of the other Loan Documents to which
it is a party; and
62
(e) when executed and delivered, and, with respect to the
Intellectual Property Assignments, upon filing and satisfaction of the
express conditions to effectiveness therein, each of the Loan
Documents to which the Borrower or any Guarantor is a party will be
the legal, valid and binding obligation or agreement, as the case may
be, of the Borrower and such Guarantor, as applicable, enforceable
against it in accordance with its respective terms, subject to the
effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general principles of
equity which may limit the availability of remedies (whether in a
proceeding at law or in equity);
SECTION 8.2 LOAN DOCUMENTS. The execution, delivery and performance by
the Borrower and each Guarantor of each of the Loan Documents to which it is a
party:
(a) have been duly authorized by all requisite corporate
action (including any required shareholder action) of the Borrower or
such Guarantor, as applicable, required for the lawful execution,
delivery and performance thereof;
(b) do not violate any provisions of (i) any law, rule or
regulation applicable to the Borrower or such Guarantor which
violation would reasonably be expected to have a Material Adverse
Effect, (ii) any order of any court or other agency of government
binding on the Borrower or such Guarantor, or their respective
properties, or (iii) the charter documents, documents of organization
or governance or bylaws of the Borrower or such Guarantor;
(c) will not be in conflict with, result in a breach of or
constitute an event of default, or an event which, with notice or
lapse of time, or both, would constitute an event of default, under
any material indenture, agreement or other instrument to which the
Borrower or such Guarantor is a party or by which any of its material
properties or assets are bound; and
(d) will not result in the creation or imposition of any
Lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Borrower or such Guarantor except
Permitted Liens and any Liens in favor of the Agent and the Lenders
created by the Loan Documents;
SECTION 8.3 SOLVENCY. The Borrower and each Guarantor are Solvent
after giving effect to the transactions contemplated by this Agreement and the
other Loan Documents;
SECTION 8.4 SUBSIDIARIES AND STOCKHOLDERS. Borrower has no
Subsidiaries other than those Persons listed as Subsidiaries in Schedule 8.4
hereto, as the same may be hereafter amended; Schedule 8.4, as the same may be
hereafter amended, states the authorized and issued capitalization of each
Subsidiary listed thereon, the number of shares of each class of capital stock
issued and outstanding of each such Subsidiary and the number and/or percentage
of outstanding shares (including options, warrants and other rights to acquire
any interest) of each such class of capital
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stock owned by the Borrower or by any such Subsidiary; the outstanding shares
of each such Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable; and the Borrower and each such Subsidiary owns
beneficially and of record all the shares it is listed as owning in Schedule
8.4, free and clear of any Lien other than Permitted Liens;
SECTION 8.5 OWNERSHIP INTERESTS. The Borrower owns no interest in any
other Person (excluding Subsidiaries) other than the Persons listed in Schedule
8.5 hereto, as the same may be hereafter amended;
SECTION 8.6 FINANCIAL CONDITION.
(a) The Borrower has heretofore furnished to the Agent (i)
the audited consolidated and unaudited consolidating balance sheets of
the Borrower and its Subsidiaries as at December 31, 1996, and the
notes thereto and the related audited consolidated and unaudited
consolidating statements of operations, cash flows, and shareholders'
equity for the Fiscal Year then ended as examined and certified by
Price Waterhouse, L.L.P. and (ii) unaudited interim consolidated
financial statements of the Borrower and its Subsidiaries consisting
of a consolidated balance sheet and related consolidated statement of
operations and cash flows, without notes, for and as of the nine month
period ended September 30, 1997. Except as set forth therein, such
financial statements (including the notes thereto) present fairly the
consolidated financial condition of the Borrower and its Subsidiaries,
as of the end of such Fiscal Year and nine month period and results of
their operations and the changes in shareholders' equity for such
Fiscal Year and nine month period, all in conformity with GAAP applied
on a Consistent Basis;
(b) Since December 31, 1996, there has not occurred any event
which has had or would reasonably be expected to have a Material
Adverse Effect, and the businesses, properties and operations of the
Borrower and its Subsidiaries, considered as a whole, have not been
materially adversely affected as a result of any fire, explosion,
earthquake, accident, strike, lockout, combination of workers, flood,
embargo or act of God;
(c) Since December 31, 1996, except as set forth in Schedule
8.6 or Schedule 8.10 attached hereto, or as permitted under Section
10.1 hereof, neither the Borrower nor any Subsidiary has incurred,
other than in the ordinary course of business, any material
Indebtedness or material Contingent Obligations that remain
outstanding or unsatisfied other than Outstandings hereunder;
SECTION 8.7 TITLE TO PROPERTIES. The Borrower and its Material
Subsidiaries have title to all their respective owned real and personal
properties, subject to no transfer restrictions or Liens of any kind, except
for (i) the transfer restrictions and Liens described in Schedule 8.7 attached
hereto, (ii) Permitted Liens, (iii) with respect to any personal property that
constitutes a security, transfer restrictions imposed under Federal and state
securities laws and regulations, and (iv) the lack of title (other than for the
Azusa Property) that could not reasonably be expected to have a Material
Adverse Effect;
64
SECTION 8.8 TAXES. The Borrower and its Subsidiaries have filed or
caused to be filed all Federal, state, local and foreign tax returns which are
required to be filed by them, other than those returns the failure of which to
file could not reasonably be expected to have a Material Adverse Effect and,
except for those tax matters set forth on Schedule 8.8 hereto and for taxes and
assessments being contested in good faith by appropriate proceedings diligently
conducted and against which reserves satisfactory to the Borrower's independent
certified public accountants have been established, have paid or caused to be
paid all taxes as shown on said returns or on any assessment received by them,
to the extent that such taxes have become due unless the failure to pay the
same could not reasonably be expected to have a Material Adverse Effect;
SECTION 8.9 OTHER AGREEMENTS. Neither the Borrower nor any Subsidiary
is:
(a) a party to any judgment, order or decree or subject to
restrictions which would reasonably be expected to have a Material
Adverse Effect; or
(b) in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument to which the Borrower or any Subsidiary is a
party, which default has, or if not remedied within any applicable
grace period would reasonably be expected to have, a Material Adverse
Effect;
SECTION 8.10 LITIGATION. Except as set forth on Schedule 8.10, there
is no action, suit or proceeding at law or in equity or by or before any
governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of the Borrower, threatened by or against the Borrower or any
Subsidiary or affecting the Borrower or any Subsidiary or any properties or
rights of the Borrower or any Subsidiary, which would reasonably be expected to
have a Material Adverse Effect;
SECTION 8.11 MARGIN STOCK. Neither the Borrower nor any Subsidiary
owns any "margin stock" as such term is defined in Regulation U, as amended (12
C.F.R. Part 221), of the Board. The proceeds of the borrowings made pursuant to
Articles 2 and 3 hereof will be used by the Borrower and its Subsidiaries only
for the purposes set forth in Sections 2.13 and 3.15 hereof. None of such
proceeds will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin stock or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry margin stock or
for any other purpose which might constitute any of the Loans under this
Agreement a "purpose credit" within the meaning of said Regulation U or
Regulation X (12 C.F.R. Part 224) of the Board. Neither the Borrower nor any
agent acting on its behalf has taken or will take any action which might cause
this Agreement or any of the documents or instruments delivered pursuant hereto
to violate any regulation of the Board or to violate the Securities Exchange
Act of 1934, as amended, or the Securities Act of 1933, as amended, or any
state securities laws, in each case as in effect on the date hereof;
SECTION 8.12 INVESTMENT COMPANY. Neither the Borrower nor any
Subsidiary is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C.
ss. 80a-1, et seq.). The application of the proceeds of the Loans and repayment
thereof by the Borrower and the performance by the Borrower of the transactions
contemplated by
65
this Agreement will not violate any provision of said Act, or any rule,
regulation or order issued by the Securities and Exchange Commission
thereunder, in each case as in effect on the date hereof;
SECTION 8.13 INTELLECTUAL PROPERTY. The Borrower and its Subsidiaries
own or have the right to use, under valid license agreements or otherwise, all
material patents, licenses, franchises, trademarks, trademark rights, trade
names, trade name rights, trade secrets and copyrights, and all applications
for any of the foregoing, necessary to the conduct of their businesses as now
conducted (the "Intellectual Property"), all such Intellectual Property being
identified on the schedules to the Intellectual Property Security Agreement
and, except as set forth on Schedule 8.13 hereto, without known conflict with
any patent, license, franchise, trademark, trade secrets and confidential
commercial or proprietary information, trade name, copyright, rights to trade
secrets or other proprietary rights of any other Person. Each Subsidiary owning
any Collateral as defined in the Intellectual Property Security Agreement is a
party to the Intellectual Property Security Agreement.
SECTION 8.14 NO UNTRUE STATEMENT. Neither this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of the Borrower or any Guarantor in accordance with or pursuant to any Loan
Document contains any misrepresentation or untrue statement of material fact or
omits to state a material fact necessary, in light of the circumstances under
which such representation or statement was made, in order to make any such
representation or statement contained herein or therein not misleading in any
material respect;
SECTION 8.15 NO CONSENTS, ETC. Neither the respective businesses or
properties of the Borrower or any Subsidiary, nor any relationship between the
Borrower or any Subsidiary and any other Person, nor the execution, delivery
and performance of the Loan Documents and the transactions contemplated hereby
is such as to require a consent, approval or authorization of, or filing,
registration or qualification with, any Governmental Authority or other
authority or any other Person on the part of the Borrower or any Subsidiary as
a condition to the execution, delivery and performance of, or consummation of
the transactions contemplated by, this Agreement or the other Loan Documents,
including, without limitation, the Bolle Acquisition, or if so, such consent,
approval, authorization, filing, registration or qualification has been
obtained or effected, or shall have been obtained or effected prior to the
Closing Date, as the case may be, or as set forth in Schedule 8.15 hereto;
SECTION 8.16 EMPLOYEE BENEFIT PLANS. Except as set forth in Schedule
8.16 hereof:
(a) Neither the Borrower nor any ERISA Affiliate maintains or
contributes to, or has any obligation under, any Employee Benefit
Plans other than those identified on Schedule 8.16 attached hereto;
(b) The Borrower and each ERISA Affiliate is in compliance
with all applicable provisions of ERISA and the regulations and
published interpretations thereunder and in compliance with all
Foreign Benefit Laws with respect to all Employee Benefit Plans except
where failure to comply would not result in a Material Adverse Effect
and except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet
expired. Each Employee Benefit Plan that is intended to be qualified
66
under Section 401(a) of the Code has been determined by the Internal
Revenue Service to be so qualified, and each trust related to such
plan has been determined to be exempt under Section 501(a) of the
Code. No material liability has been incurred by the Borrower or any
ERISA Affiliate which remains unsatisfied for any taxes or penalties
with respect to any Employee Benefit Plan or any Multiemployer Plan;
(c) No Pension Plan has been terminated, nor has any
accumulated funding deficiency (as defined in Section 412 of the Code)
been incurred (without regard to any waiver granted under Section 412
of the Code), nor has any funding waiver from the IRS been received or
requested with respect to any Pension Plan, nor has the Borrower or
any ERISA Affiliate failed to make any contributions or to pay any
amounts due and owing as required by Section 412 of the Code, Section
302 of ERISA or the terms of any Pension Plan prior to the due dates
of such contributions under Section 412 of the Code or Section 302 of
ERISA, nor has there been any event requiring any disclosure under
Section 4041(c)(3)(C), 4063(a) or 4068(f) of ERISA with respect to any
Pension Plan;
(d) Neither the Borrower nor any ERISA Affiliate has: (A)
engaged in a nonexempt prohibited transaction described in Section 406
of ERISA or Section 4975 of the Code, (B) incurred any liability to
the PBGC which remains outstanding other than the payment of premiums
and there are no premium payments which are due and unpaid, (C) failed
to make a required contribution or payment to a Multiemployer Plan or
(D) failed to make a required installment or other required payment
under Section 412 of the Code;
(e) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan; and
(f) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of the Borrower after
due inquiry, is threatened concerning or involving any Employee
Benefit Plan.
SECTION 8.17 NO DEFAULT. As of the date hereof, there does not exist
any Default or Event of Default hereunder.
SECTION 8.18 ENVIRONMENTAL MATTERS. Except as listed on Schedule 8.18,
the Borrower and each Subsidiary is in compliance in all material respects with
all applicable Environmental Laws and has been issued and currently maintains
all required federal, state and local permits, licenses, certificates and
approvals. Neither the Borrower nor any Subsidiary has been notified of any
pending or threatened action, suit, proceeding or investigation, and neither
the Borrower nor any Subsidiary is aware of any facts, which (a) calls into
question, or would reasonably be expected to call into question, compliance by
the Borrower or any Subsidiary with any Environmental Laws, (b) seeks, or would
reasonably be expected to form the basis of a meritorious proceeding to seek,
to suspend, revoke or terminate any license, permit or approval necessary for
the operation of the Borrower's or any Subsidiary's business or facilities, or
(c) seeks to cause, or would reasonably be expected to form the basis of a
meritorious proceeding to cause, any property of the Borrower or any Subsidiary
to be subject to any restrictions on ownership, use, occupancy or
67
transferability under any Environmental Law, any of which would reasonably be
expected to have a Material Adverse Effect.
SECTION 8.19 EMPLOYMENT MATTERS. Except as set forth on Schedule 8.19,
the Borrower and all Subsidiaries are in compliance with all applicable laws,
rules and regulations pertaining to labor or employment matters, including
without limitation those pertaining to wages, hours, occupational safety and
taxation, except where noncompliance could not reasonably be expected to have a
Material Adverse Effect, and there is neither pending nor, to the knowledge of
the Borrower, any threatened litigation, administrative proceeding or
investigation in respect of such matters an adverse ruling or determination in
which would reasonably be expected to have a Material Adverse Effect.
SECTION 8.20 MERGER DOCUMENTS. On the Closing Date, each of the
representations and warranties contained in Articles II and III of the Merger
Agreement, including all Exhibits referenced therein and all definitions of
defined terms referenced therein, are incorporated herein by reference and
given by the Borrower as of the Closing Date.
ARTICLE IX
AFFIRMATIVE COVENANTS
Until the occurrence of the Facility Termination Date, unless the
Required Lenders shall otherwise consent in writing, the Borrower will and will
cause each Guarantor, as applicable, to:
SECTION 9.1 FINANCIAL REPORTS, ETC.
(a) As soon as practical and in any event within 105 days
after the end of each Fiscal Year after the Closing Date, deliver or
cause to be delivered to the Agent and each Lender (i) the audited
consolidated and unaudited consolidating balance sheets of the
Borrower and its Subsidiaries, with the notes thereto, and the related
audited consolidated and unaudited consolidating statements of
earnings, cash flow, and shareholders' equity and the notes thereto,
for such Fiscal Year, setting forth in the case of the consolidated
statements comparative financial statements for the preceding Fiscal
Year, all prepared in accordance with GAAP applied on a Consistent
Basis and containing, with respect to the audited consolidated
financial reports, opinions of Price Waterhouse, or other such
independent certified public accountants selected by the Borrower and
approved by the Agent, which approval shall not be unreasonably
withheld, which are unqualified and without an exception not
acceptable to the Agent; and (ii) a certificate of an Authorized
Representative as to the absence of any Default or Event of Default
and demonstrating compliance with Article XI of this Agreement, which
certificate shall be in the form attached hereto as Exhibit O and
incorporated herein by reference;
(b) as soon as practical and in any event within 60 days
after the end of each fiscal quarter beginning with the fiscal quarter
ended March 31, 1998, deliver to the Agent and each
68
Lender (i) the consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the end of such fiscal quarter,
and the related consolidated and consolidating statements of earnings,
cash flow, and shareholders' equity for such fiscal quarter and for
the period from the beginning of the Fiscal Year through the end of
such fiscal quarter, accompanied by a certificate of an Authorized
Representative to the effect that such financial statements present
fairly the financial position of the Borrower and its Subsidiaries as
of the end of such fiscal quarter and the results of their operations
and the changes in shareholders equity for such fiscal quarter, in
conformity with the standards set forth in Section 8.6(a) with respect
to interim financials, and (ii) a certificate of an Authorized
Representative as to the absence of any Default or Event of Default
and containing computations for such quarter comparable to that
required pursuant to Section 9.1(a)(ii);
(c) upon the request of the Required Lenders and at the
expense of the Lenders unless an Event of Default has occurred and is
continuing, deliver to the Agent and each Lender a letter from the
Borrower's accountants specified in Section 9.1(a)(i) hereof stating
that, in performing the audit necessary to render an opinion on the
financial statements delivered under Section 9.1(a)(i), they obtained
no knowledge of any Default or Event of Default by the Borrower in the
fulfillment of the terms and provisions of this Agreement insofar as
they relate to financial matters (which at the date of such statement
remains uncured); and if the accountants have obtained knowledge of
such Default or Event of Default, a statement specifying the nature
and period of existence thereof;
(d) not later than the last Business Day of each Fiscal Year,
deliver to the Agent and each Lender consolidated financial
projections for the Borrower and its Subsidiaries for the period from
the beginning of the next Fiscal Year to the Scheduled Maturity Date,
prepared on an annual basis and in accordance with GAAP applied on a
Consistent Basis; provided, however, that projections for the Fiscal
Year immediately following delivery of such projections shall be
prepared on a quarterly basis; provided further, however, that in no
event shall delivery of such projections constitute a representation
or warranty of the Borrower that its consolidated financial results
for, and consolidated financial condition at the end of, the period
for which such projections were prepared shall meet or exceed such
projections;
(e) promptly upon their becoming available to the Borrower,
the Borrower shall deliver to the Agent and each Lender a copy of (i)
all regular or special reports or effective registration statements
which the Borrower or any Subsidiary shall file from and after the
date hereof with the Securities and Exchange Commission (or any
successor thereto) or any securities exchange, (ii) any proxy
statement distributed by the Borrower to its shareholders, bondholders
or the financial community in general, and (iii) any management letter
or other report submitted to the Borrower or any of its Subsidiaries
by independent accountants in connection with any annual, interim or
special audit of the Borrower or any of its Subsidiaries; and
(f) promptly, from time to time, deliver or cause to be
delivered to the Agent and each Lender such other information
regarding Borrower's and each Subsidiary's operations, business
affairs and financial condition as the Agent or such Lender may
reasonably request.
69
The Agent and the Lenders are hereby authorized to deliver a copy of
any such financial information delivered hereunder to the Lenders (or any
affiliate of any Lender) or to the Agent to any regulatory authority having
jurisdiction over any of the Lenders pursuant to any written request therefor,
or, subject to Article XIV hereof, to any other Person who shall acquire or
consider the acquisition of a participation interest in or assignment of any
Loan or Letter of Credit permitted by this Agreement.
SECTION 9.2 MAINTAIN PROPERTIES. Maintain all properties necessary to
its operations in good working order and condition (ordinary wear and tear
excepted) and make all needed repairs, replacements and renewals as are
necessary to conduct its business in accordance with customary business
practices.
SECTION 9.3 EXISTENCE, QUALIFICATION, ETC. Do or cause to be done all
things necessary to preserve and keep in full force and effect its existence
and all material rights and franchises, trade names, trademarks and permits,
except to the extent conveyed in connection with a transaction permitted under
Section 10.4 hereof, and maintain its license or qualification to do business
as a foreign corporation and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary and in which failure to maintain such license,
qualification and good standing would reasonably be expected to result in a
Material Adverse Effect.
SECTION 9.4 REGULATIONS AND TAXES. Comply with all statutes and
governmental regulations if noncompliance therewith would reasonably be
expected to have a Material Adverse Effect and pay all taxes, assessments,
governmental charges, claims for labor, supplies, rent and any other obligation
which, if unpaid, might become a Lien against any of its properties that
constitute Collateral or a Lien on any other property, except Permitted Liens
and any of the foregoing being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves have been
established.
SECTION 9.5 INSURANCE. (a) Keep all of its insurable properties
adequately insured at all times with responsible insurance carriers against
loss or damage by fire and other hazards as are customarily insured against by
similar businesses owning such properties similarly situated, (b) maintain
general public liability insurance at all times with responsible insurance
carriers against liability on account of damage to persons and property having
such limits, deductibles, exclusions and co-insurance and other provisions
providing no less coverage than that specified in Schedule 9.5 attached hereto,
such insurance policies to be in form reasonably satisfactory to the Agent, (c)
maintain insurance under all applicable workers' compensation laws (or in the
alternative, maintain required reserves if self-insured for workers'
compensation purposes) and against business interruption and (d) maintain all
insurance required under the Security Instruments. Each of the policies of
insurance described in this Section 9.5 shall provide that the insurer shall
give the Agent not less than thirty (30) days' prior written notice before any
such policy shall lapse or be terminated, canceled or materially amended.
70
SECTION 9.6 TRUE BOOKS. Keep true books of record and account in which
full, true and correct entries shall be made of all of its dealings and
transactions in accordance with customary business practices, and set up on its
books such reserves as may be required by GAAP with respect to doubtful
accounts and all taxes, assessments, charges, levies and claims and with
respect to its business in general, and include such reserves in interim as
well as year-end financial statements.
SECTION 9.7 RIGHT OF INSPECTION. Permit any Person designated by any
Lender or the Agent, at the Borrower's expense with respect to any Person
designated by the Agent if there has occurred and continues to exist a Default
or an Event of Default, and at the requesting Lender's expense in all other
circumstances, to visit and inspect any of the properties, corporate books and
financial reports of the Borrower and its Subsidiaries, and to discuss their
respective affairs, finances and accounts with their principal officers and
independent certified public accountants, all at reasonable times, at
reasonable intervals and with reasonable prior notice.
SECTION 9.8 OBSERVE ALL LAWS. Conform to and duly observe in all
material respects all laws, rules and regulations and all other valid
requirements of any Governmental Authority the non-observance of which or
non-compliance with which would reasonably be expected to have a Material
Adverse Effect and obtain and maintain all material licenses, permits,
certifications and approvals, as are required for the conduct of the business
of the Borrower or any Material Subsidiary.
SECTION 9.9 COVENANTS EXTENDING TO SUBSIDIARIES. Without duplication,
cause each of its Subsidiaries to do with respect to itself, its business and
its assets, each of the things required of the Borrower in Sections 9.2 through
9.8, inclusive.
SECTION 9.10 OFFICER'S KNOWLEDGE OF DEFAULT. Upon any Authorized
Representative or executive officer of the Borrower obtaining knowledge of any
Default or Event of Default hereunder or under any other obligation of the
Borrower or any Subsidiary, promptly deliver to the Agent written notice
thereof, the period of existence thereof, and what action the Borrower proposes
to take with respect thereto.
SECTION 9.11 SUITS OR OTHER PROCEEDINGS. Upon any Authorized
Representative or executive officer of the Borrower obtaining knowledge of any
litigation or other proceedings being instituted against the Borrower or any
Subsidiary, or any attachment, levy, execution or other process being
instituted against any assets of the Borrower or any Subsidiary, in an
aggregate amount in respect of all such proceedings and processes greater than
$500,000 not otherwise covered by insurance, promptly deliver to the Agent
written notice thereof stating the nature and status of such litigation,
dispute, proceeding, levy, execution or other process.
SECTION 9.12 NOTICE OF DISCHARGE OF HAZARDOUS MATERIAL OR
ENVIRONMENTAL COMPLAINT. Promptly provide to the Agent true, accurate and
complete copies of any and all letters, notices, complaints, orders,
directives, claims, or citations received by the Borrower or any Subsidiary
relating to any (a) violation or alleged violation by the Borrower or any
Subsidiary of any applicable Environmental Laws; (b) release or threatened
release into the environment by the Borrower or any Subsidiary, or by any
Person handling, transporting or disposing of any Hazardous Material on behalf
of the Borrower or any Subsidiary, or at any facility or property owned or
leased or operated by the
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Borrower or a Subsidiary, of any Hazardous Material, except where occurring
legally; or (c) liability or alleged liability of the Borrower or any
Subsidiary for the costs of cleaning up, removing, remediating or responding to
a release of Hazardous Materials.
SECTION 9.13 ENVIRONMENTAL COMPLIANCE. If the Borrower or any
Subsidiary shall receive any letter, notice, complaint, order, directive, claim
or citation alleging that the Borrower or any Subsidiary has violated any
Environmental Law or is liable for the costs of cleaning up, removing,
remediating or responding to a release of Hazardous Materials, the Borrower
shall, within the time period permitted and to the extent required by the
applicable Environmental Law or the Governmental Authority responsible for
enforcing such Environmental Law, remove or remedy, or cause the applicable
Subsidiary to remove or remedy, such violation or release or satisfy such
liability unless, and only during the period that, the applicability of the
Environmental Law, the fact of such violation or liability or what is required
to remove or remedy such violation is being contested by the Borrower or the
applicable Subsidiary by appropriate proceedings diligently conducted and all
reserves with respect thereto as may be required under GAAP, if any, have been
made.
SECTION 9.14 INDEMNIFICATION. The Borrower hereby agrees to defend,
indemnify and hold the Agent and the Lenders, and their respective officers,
directors, employees and agents, harmless from and against any and all claims,
losses, penalties, liabilities, damages and expenses (including, without
limitation, assessment and cleanup costs and reasonable attorneys',
consultants' and other experts' fees and disbursements) arising directly or
indirectly from, out of or by reason of (a) the violation of any Environmental
Law by the Borrower or any Subsidiary or with respect to any property owned,
operated or leased by the Borrower or any Subsidiary or (b) the handling,
storage, treatment, emission or disposal of any Hazardous Material by or on
behalf of the Borrower or any Subsidiary on or with respect to property owned
or leased or operated by the Borrower or any Subsidiary. The provisions of this
Section 9.14 shall survive repayment of the Obligations, the occurrence of the
Facility Termination Date and expiration or termination of this Agreement.
SECTION 9.15 FURTHER ASSURANCES. At the Borrower's cost and expense
upon request of the Agent, or at the Lenders' cost and expense upon request of
the Required Lenders, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents, certificates,
agreements, financing and continuation statements, and do and cause to be done
such further acts that may be reasonably necessary or advisable in the
reasonable opinion of the Agent to carry out more effectively the provisions
and purposes of this Agreement and the other Loan Documents.
SECTION 9.16 EMPLOYEE BENEFIT PLANS. With reasonable promptness, and
in any event within thirty (30) days, the Borrower will give notice of and/or
deliver to Agent copies of (a) the establishment of any new Employee Benefit
Plan, the commencement of contributions to any plan to which the Borrower or
any of its ERISA Affiliates was not previously contributing or any increase in
the benefits of any existing Employee Benefit Plan, (B) each funding waiver
request filed with respect to any Employee Benefit Plan and all communications
received or sent by the Borrower or any ERISA Affiliate with respect to such
request and (C) the failure of the Borrower or any ERISA Affiliate to make a
required installment or payment under Section 302 of ERISA or Section 412 of
the Code by the due date.
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SECTION 9.17 TERMINATION EVENTS. Promptly and in any event within ten
(10) days of becoming aware of the occurrence of or forthcoming occurrence of
any (a) Termination Event or (b) "prohibited transaction," as such term is
defined in Section 406 of ERISA or Section 4975 of the Code, in connection with
any Pension Plan or any trust created thereunder, the Borrower will deliver to
Agent a notice specifying the nature thereof, what action the Borrower has
taken, is taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto.
SECTION 9.18 ERISA NOTICES. With reasonable promptness but in any
event within ten (10) days for purposes of clauses (a), (b) and (c), the
Borrower will deliver to the Agent copies of (a) any favorable or unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of an Employee Benefit Plan under Section 401(a) of the Code, (b)
all notices received by the Borrower or any ERISA Affiliate of the PBGC's
intent to terminate any Pension Plan or to have a trustee appointed to
administer any Pension Plan, (c) each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) filed by the Borrower or any ERISA Affiliate
with the Internal Revenue Service with respect to each Pension Plan and (d) all
notices received by the Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA. The Borrower will notify the Agent in
writing within two (2) Business Days of the Borrower obtaining knowledge or
reason to know that the Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA.
SECTION 9.19 CONTINUED OPERATIONS. Continue at all times (a) to
conduct its business and engage principally in the Core Business or a line or
lines of business complimentary to the Core Business and (b) to preserve,
protect and maintain free from Liens (other than Permitted Liens) its material
patents, copyrights, licenses, trademarks, trademark rights, trade names, trade
name rights, trade secrets and know-how necessary or useful in the conduct of
its operations.
SECTION 9.20 USE OF PROCEEDS. Use the proceeds of the Loans solely for
the purposes specified in Section 2.12 or 3.15 hereof.
SECTION 9.21 NEW SUBSIDIARIES.
(a) In the event of the acquisition or creation of any
Subsidiary or Control Subsidiary (a "New Subsidiary"), cause to be
delivered to the Agent for the benefit of the Lenders a Stock Pledge
Agreement with respect to the capital stock of such New Subsidiary
owned by the Borrower or any Subsidiary substantially in the form of
Exhibit G hereto within twenty (20) Business Days of the acquisition
or creation of a Subsidiary; provided, however, that if such New
Subsidiary is a Foreign Subsidiary, such pledge of capital stock shall
only be required if it is a Direct Foreign Subsidiary or a Direct
Foreign Control Subsidiary or if there would not result therefrom a
material adverse tax impact on the Borrower;
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(b) In the event of the acquisition or creation of any
Material Subsidiary or any Subsidiary which would be a Material
Subsidiary except for the fact that it is a Foreign Subsidiary or upon
any previously existing Person becoming a Material Subsidiary, cause
to be delivered to the Agent for the benefit of the Lenders each of
the following indicated to be delivered by such Subsidiary within
twenty (20) Business Days of the acquisition or creation of such
Subsidiary or, with respect to an existing Person becoming a Material
Subsidiary, within twenty (20) Business Days of delivery of financial
statements pursuant to Section 9.1(a) or (b) hereof with respect to
the fiscal quarter of the Borrower during which such Person acquired
such assets or achieved such net income as to become a Material
Subsidiary:
(i) a Guaranty executed by such Subsidiary,
substantially in the form of Exhibit E attached hereto;
provided, however, that such Guaranty shall only be required
if such Subsidiary is a Material Subsidiary or such action
would not have a material adverse tax impact on the Borrower
and is not otherwise prohibited by applicable laws of any
foreign jurisdiction;
(ii) a Security Agreement executed by such
Subsidiary, substantially in the form of Exhibit L attached
hereto; provided, however, that such Security Agreement shall
only be required if such Subsidiary is a Domestic Subsidiary
or if there would not result therefrom a material adverse tax
impact on the Borrower and is not otherwise prohibited by
applicable laws of any foreign jurisdiction;
(iii) if such Subsidiary has any material leased
locations or Intellectual Property, a Landlord Waiver or an
Intellectual Property Security Agreement, as applicable,
executed by such Subsidiary, substantially in the forms of
such documents attached hereto as exhibits; provided,
however, that each of the foregoing shall be required only if
such Subsidiary is a Domestic Subsidiary or such action would
not have a material adverse tax impact on the Borrower and is
not otherwise prohibited by applicable laws of any foreign
jurisdiction;
(c) In the event of the acquisition or creation of any
Subsidiary subject to the provisions of clauses (a) or (b) above,
cause to be delivered to the Agent for the benefit of the Lenders each
of the following within the time periods indicated therein:
(i) an opinion of counsel to such Subsidiary dated
as of the date of delivery of the other documents required to
be delivered pursuant to this Section 9.21 and addressed to
the Agent and the Lenders, in form and substance identical to
the opinion of counsel delivered pursuant to Section 7.1
hereof on the Closing Date with respect to any Guarantor and
the Pledged Stock; and
(ii) current copies of the Organizational Documents
and Operating Documents of such Subsidiary, minutes of duly
called and conducted meetings (or duly effected consent
actions) of the Board of Directors, or appropriate committees
thereof (and, if required by such Organizational Documents or
Operating Documents or by applicable laws, of the
shareholders), of such Subsidiary authorizing the actions
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and the execution and delivery and performance of such
Guaranty, Security Agreement, Stock Pledge Agreement,
Intellectual Property Security Agreement or other agreement
required under this Section 9.21 and evidence satisfactory to
the Agent (confirmation of the receipt of which will be
provided by the Agent to the Lenders) that such Subsidiary is
Solvent as of such date after giving effect to such Guaranty,
Security Agreement, Stock Pledge Agreement, and, if
applicable, Intellectual Property Security Agreement.
SECTION 9.22 HEDGING OBLIGATIONS. Enter into Swap Agreements in an
aggregate notional amount reasonably agreed to by the Borrower and the Agent
provided that such Swap Agreements are available on terms and conditions
reasonably acceptable to the Borrower.
SECTION 9.23 RECIPROCAL EASEMENT AGREEMENT. Enter into a reciprocal
easement agreement with respect to certain real property owned by ORC and
leased to The Monsanto Company, as contemplated by and in accordance with that
certain Post-Closing Agreement dated as of July 10, 1997 between the Borrower
and the Agent, as amended or extended from time to time with the consent of the
Agent.
ARTICLE X
NEGATIVE COVENANTS
Until the occurrence of the Facility Termination Date, unless the
Required Lenders shall otherwise consent in writing, the Borrower will not, nor
will it permit any Subsidiary to:
SECTION 10.1 INDEBTEDNESS. Incur, create, assume or permit to exist
any Indebtedness of the Borrower and its Subsidiaries determined on a
consolidated basis, howsoever evidenced, except the following (collectively,
the "Permitted Indebtedness"):
(a) Indebtedness set forth in Schedule 10.1 attached hereto
and incorporated herein by reference and any extension, renewal or
refinancing thereof that does not increase the principal amount
thereof or (except as restricted below) interest rate payable thereon
from that existing immediately prior to such extension, renewal or
refinancing; provided, none of the instruments and agreements
evidencing or governing such Indebtedness shall be amended, modified
or supplemented after the Closing Date to change any terms of
subordination, repayment or rights of conversion, put, exchange or
other rights from such terms and rights as in effect on the Closing
Date; provided however, that, notwithstanding the foregoing, the rate
of interest payable thereon may change but in no event shall be
greater than the interest rate generally available at the date of such
amendment, modification or supplement from money center or regional
commercial banks to companies of creditworthiness similar to that of
the Borrower;
(b) Indebtedness owing to the Agent or any Lender in
connection with this Agreement, any Note or other Loan Document;
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(c) Indebtedness consisting of Hedging Obligations permitted
under Section 10.9 hereof;
(d) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(e) (i) purchase money Indebtedness and (ii) Indebtedness
incurred with respect to financing of Capital Expenditures,
collectively under both clause (i) and (ii) not to exceed an aggregate
outstanding amount at any time of $3,000,000;
(f) Indebtedness of any Guarantor owing to the Borrower or
another Guarantor and Indebtedness of the Borrower owing to any
Guarantor;
(g) Indebtedness of Subsidiaries acquired after the Closing
Date, provided that (i) such Indebtedness (A) is recorded in the
financial books and records of such Subsidiary prior to such
Acquisition, (B) was not incurred by such Subsidiary in anticipation
of such Acquisition, (C) is non-recourse to the Borrower and each
Guarantor and not subsequently assumed by the Borrower or any
Guarantor, and (D) is incurred upon terms determined by the Borrower
in its good faith business judgment to be more economically
advantageous to the Borrower than the terms of an Advance hereunder
or, if not so determined by the Borrower to be more economically
advantageous, replaced by an Advance hereunder within
30 days of such Acquisition, and (ii) immediately after such
acquisition, no Default or Event of Default has occurred or is
continuing; and
(h) additional unsecured Indebtedness incurred during any
Fiscal Year in an aggregate outstanding principal amount not to exceed
$2,000,000; provided, however, any such permitted additional
Indebtedness not incurred during any Fiscal Year may not be incurred
during any subsequent Fiscal Year.
SECTION 10.2 LIENS. Incur, create or permit to exist any pledge, Lien,
charge or other encumbrance of any nature whatsoever with respect to any
property or assets now owned or hereafter acquired by the Borrower or any of
its Subsidiaries, including without limitation any capital stock of the
Borrower or any of its Subsidiaries, other than any of the following
(collectively, the "Permitted Liens"):
(a) Liens existing as of the date hereof and as set forth in
Schedule 8.7 attached hereto, provided, however, that any such Lien
that is released after the date hereof may not thereafter re-attach or
otherwise become permitted by this Section 10.2(a);
(b) Liens imposed by law for taxes, assessments or charges of
any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP;
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(c) Liens in respect of purchase money Indebtedness permitted
to be incurred pursuant to Section 10.1(e)(i) hereof in connection
with the acquisition of certain tangible property; provided that (a)
the original principal balance of the Indebtedness secured by such
Lien constitutes not less than 80% nor more than 100% of the purchase
price of the property acquired and (B) such Lien extends only to the
property acquired with the proceeds of the Indebtedness so secured;
(d) statutory Liens of landlords who are not subject to a
Landlord Waiver and Liens of carriers, warehousemen, mechanics,
materialmen and other Liens imposed by law or created in the ordinary
course of business and in existence less than 90 days from the date of
creation thereof for amounts not yet due or which are being contested
in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP;
(e) Liens incurred or deposits made in the ordinary course of
business (including, without limitation, surety bonds and appeal
bonds) in connection with workers' compensation, unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, leases, contracts (other than for the
repayment of Indebtedness), statutory obligations and other similar
obligations or arising as a result of progress payments under
government contracts;
(f) easements (including, without limitation, reciprocal
easement agreements and utility agreements), rights-of-way, covenants,
consents, reservations, encroachments, variations and zoning and other
restrictions, charges or encumbrances (whether or not recorded), which
do not interfere with the ordinary conduct of the business of the
Borrower or any Subsidiary and do not impair the use of the property
to which they attach to the extent that such interference or
impairment would reasonably be expected to have a Material Adverse
Effect; and
(g) Liens on real property securing Indebtedness permitted
under Section 10.1(a), (b), (e) or (g) hereof (subject to compliance
with subsection (c) above in connection with purchase money
Indebtedness).
Notwithstanding the foregoing, none of the Liens described in clauses (c) or
(g) shall be permitted to attach or relate to the Mortgaged Property and such
Liens, to the extent they arise, shall not constitute "Permitted Liens"
hereunder.
SECTION 10.3 INVESTMENTS; ACQUISITIONS. Make any Acquisition or
otherwise purchase, own, invest in or otherwise acquire, directly or
indirectly, any stock or other securities, or make or permit to exist any
interest whatsoever in any other Person or permit to exist any loans or
advances to any Person, except that Borrower and its Subsidiaries may:
(a) invest in Eligible Securities;
77
(b) maintain investments existing as of the date hereof and
as set forth in Schedules 8.4 and 8.5 attached hereto;
(c) accept and maintain accounts receivable arising and trade
credit granted in the ordinary course of business and retain any
securities received in satisfaction or partial satisfaction thereof in
connection with accounts of financially troubled Persons to the extent
reasonably necessary in order to prevent or limit loss;
(d) make and maintain loans and advances to and investments
in Subsidiaries which are Guarantors;
(e) consummate Permitted Acquisitions and Mergers permitted
under Section 10.4(a) hereof;
(f) make and maintain other loans, advances and investments
in an aggregate principal amount at any time outstanding not to exceed
$1,000,000.
SECTION 10.4 MERGER OR TRANSFER OF ASSETS. (a) Consolidate with or
merge into any other Person, or permit any other Person to merge into it;
provided, however, (i) any Subsidiary may merge or transfer all or any part of
its assets into or consolidate with the Borrower or any Domestic Subsidiary, in
each case, provided the requirements of Article VI and Section 9.21 hereof are
complied with as of the effective date of the consummation of such merger, (ii)
any Subsidiary may merge into another Person that is not a Subsidiary prior to
such merger whereby such other Person is the surviving corporation provided the
requirements of Article VI and Section 9.21 hereof are complied with and such
other Person becomes a Subsidiary as of the effective date of the consummation
of such merger and that such merger would be a Permitted Acquisition but for
the Subsidiary not being the surviving corporation, (iii) any Direct Foreign
Subsidiary may merge with or into any other Direct Foreign Subsidiary provided
the requirements of Article VI and Section 9.21 hereof are complied with as of
the effective date of the consummation of such merger, (iv) any Foreign
Subsidiary which is not a Direct Foreign Subsidiary may merge with or into any
other Foreign Subsidiary provided the requirements of Article VI and Section
9.21 hereof are complied with as of the effective date of the consummation of
such merger and (v) the Borrower or any Subsidiary may make a Permitted
Acquisition.
(b) Sell, lease, transfer or otherwise dispose of any assets other
than (i) dispositions of inventory in the ordinary course of business, (ii)
dispositions of equipment which, in the aggregate during any Fiscal Year, have
a fair market value or book value, whichever is less, of $250,000 or less which
is not replaced by equipment having at least equivalent value, (iii)
dispositions of equipment which is replaced with equipment of like kind,
function and value, provided the replacement equipment shall be acquired prior
to or substantially contemporaneously with any disposition of the Equipment
that is to be replaced, and the replacement equipment shall be free and clear
of Liens other than Permitted Liens, (iv) dispositions of other assets which,
in the aggregate during any fiscal year, have a fair market value or book
value, whichever is less, of $250,000 or less, and (v) any Equity Offering of
authorized but unissued equity securities the Net Proceeds of which are subject
to the terms of Section 2.6(b) hereof except as otherwise provided therein.
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SECTION 10.5 TRANSACTIONS WITH AFFILIATES. Other than transactions
permitted under Sections 10.3 and 10.4 hereof or set forth on Schedule 10.5
hereto, enter into any transaction after the Closing Date, including, without
limitation, the purchase, sale, lease or exchange of property, real or
personal, or the rendering of any service, with any Affiliate of the Borrower,
except (a) that such Persons may render services to the Borrower or its
Subsidiaries for compensation at the same rates generally paid by Persons
engaged in the same or similar businesses for the same or similar services, (b)
that the Borrower or any Subsidiary may render services to such Persons for
compensation at the same rates generally charged by the Borrower or such
Subsidiary and (c) in the ordinary course of and pursuant to the reasonable
requirements of the Borrower's (or any Subsidiary's) business consistent with
past practice of the Borrower and its Subsidiaries and upon fair and reasonable
terms no less favorable to the Borrower (or any Subsidiary) than would be
obtained in a comparable arm's-length transaction with a Person not an
Affiliate.
SECTION 10.6 COMPLIANCE WITH ERISA. With respect to any Pension Plan,
Employee Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which
would result in a liability to the Borrower or any ERISA Affiliate in
excess of $500,000;
(b) permit the present value of all benefit liabilities under
all Pension Plans (except as provided below) to exceed the current
value of the assets of such Pension Plans allocable to such benefit
liabilities (the "Excess Liabilities Value") by more than $500,000;
(c) permit any accumulated funding deficiency in excess of
$500,000 (as defined in Section 302 of ERISA and Section 412 of the
Code) with respect to any Pension Plan, whether or not waived;
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto which results in or is likely to
result in a liability in excess of $500,000; or
(e) engage, or permit any Borrower or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to
Section 502(i) of ERISA or a tax pursuant to Section 4975 of the Code
in excess of $500,000 may be imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrower or any ERISA Affiliate or increase the
obligation of the Borrower or any ERISA Affiliate to a Multiemployer
Plan which liability or increase, individually or together with all
similar liabilities and increases, is in excess of $500,000; or
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(g) fail, or permit the Borrower or any ERISA Affiliate to
fail, to establish, maintain and operate each Employee Benefit Plan in
compliance in all material respects with the provisions of ERISA, the
Code, all applicable Foreign Benefit Law and all other applicable laws
and the regulations and interpretations thereof.
SECTION 10.7 FISCAL YEAR. Change the Borrower's Fiscal Year.
SECTION 10.8 DISSOLUTION, ETC. Wind up, liquidate or dissolve
(voluntarily or involuntarily) or commence or suffer any proceedings seeking
any such winding up, liquidation or dissolution, except in connection with the
merger or consolidation of Subsidiaries into each other or into a Borrower
permitted pursuant to Section 10.4 hereof.
SECTION 10.9 HEDGING OBLIGATIONS. Incur any Hedging Obligations or
enter into any agreements, arrangements, devices or instruments relating to
Hedging Obligations, except for Hedging Obligations (a) related to protection
against fluctuations in currency exchange rates in an aggregate notional amount
to be agreed upon by the Agent and the Borrower and (b) arising under Swap
Agreements agreed to in accordance with Section 9.22 hereof; provided, however,
in no event shall Hedging Obligations be incurred for speculative or investment
purposes.
SECTION 10.10 DIVIDENDS, REDEMPTIONS AND OTHER PAYMENTS. (a) Declare
or pay any cash dividends or make any other payment or distribution on account
of its capital stock (other than dividends payable in the ordinary course of
business solely in Common Stock) on any shares of stock of any class of the
Borrower, now or hereafter outstanding, or (b) purchase, redeem (whether
mandatory or optional redemption) or otherwise retire any such shares or
interests in consideration of cash or any debt instrument (whether or not
subordinated) ("Restricted Debt") or shares of capital stock issued by any
Subsidiary of the Borrower ("Restricted Stock"), or apply or set apart any of
their assets therefor or make any other distribution (by redemption of capital
or otherwise) in respect of any such shares in consideration of cash or
Restricted Debt or Restricted Stock, or agree to do any of the foregoing, other
than (i) conversion of any of the Borrower's securities into Common Stock which
are so convertible in accordance with their terms and (ii) dividends payable by
any Subsidiary to another Subsidiary or to the Borrower.
SECTION 10.11 DEFAULTS UNDER OTHER AGREEMENTS. Permit any landlord,
mortgagee, trustee under deed of trust or lienholder to lawfully declare a
default under any lease, mortgage, deed of trust or lien instrument on real
estate owned or leased by the Borrower or any Guarantor or permit any landlord
to lawfully terminate, prior to the expiration of its term, any leasehold
interest of the Borrower or any Guarantor, and any such default or termination,
individually or collectively, would reasonably be expected to result in a
Material Adverse Effect.
SECTION 10.12 COMPENSATION; REIMBURSEMENT OF EXPENSES.
(a) Pay any salary, fees, and other direct and indirect
remuneration and compensation to any of its directors and executive
officers in an amount in excess of those amounts paid to directors and
executive officers of comparable companies engaged in the same general
type of business and in similar financial condition.
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(b) Reimburse any stockholder, officer, director, employee or
agent of the Borrower or any Guarantor for any expenses incurred by
such Person other than reasonable expenses incurred for or on behalf
of the Borrower or any Guarantor in the ordinary course of business.
SECTION 10.13 CHANGE IN ACCOUNTANTS. Change its independent public
accountants to any Person other than Price Waterhouse, L.L.P., Deloitte &
Touche, L.L.P., KPMG Peat Marwick, L.L.P., Xxxxxx Xxxxxxxx & Co., L.L.P.,
Coopers & Xxxxxxx, L.L.P. or Ernst & Young, L.L.P., or any successor to any
thereof as a result of their combination.
SECTION 10.14 LIMITATIONS ON SALES AND LEASEBACKS. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Guarantor of real or personal property which has been or is to be sold or
transferred by the Borrower or any Guarantor to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or any
Guarantor, unless such arrangement is with respect to real property on which a
Lien is attached as permitted under Section 10.2(a), (c) or (g) prior to such
arrangement and such Lien was not attached in a related transaction or series
of related transactions or in anticipation of such arrangement.
SECTION 10.15 NEGATIVE PLEDGE CLAUSES. Enter into any agreement with
any Person other than the Agent and the Lenders pursuant to this Agreement or
any other Loan Documents which prohibits or limits the ability of any of the
Borrower or any Guarantor to create, incur, assume or suffer to exist any Lien,
security interest or encumbrance upon any of its property, assets or revenues,
whether now owned or hereafter acquired.
SECTION 10.16 Change of Control. Permit, or become a party to or the
subject of any agreement, transaction or related series of transactions
pursuant to or as a result of which, any Person or group of Persons, other than
Xxxxxx X. Xxxxxxxx, acting in concert, acquires voting control, directly or
indirectly, whether by tender offer or in one or more negotiated block or
market transactions, of more than twenty-five percent (25%) of the shares of
the issued and outstanding Voting Stock of any class of the Borrower having
voting rights in the election of directors.
SECTION 10.17 INTELLECTUAL PROPERTY. Except as set forth in Section
10.18 hereof, cause or permit any of the licenses, trademarks, patents,
copyrights, the License Agreement and other intellectual property of the
Borrower or its Subsidiaries to be sub-licensed, assigned or transferred or
subject to distributorship arrangements, other than to the Agent for the
benefit of the Lenders hereunder or, with respect to sub-licenses only, to
manufacturers and distributors of Inventory in the ordinary course of business
as currently conducted.
SECTION 10.18 LICENSES. Other than as set forth on Schedule 10.18
hereof, grant, establish, create or permit to exist any license of, or
distributorship arrangement of, any of the intellectual property now existing
or hereafter arising which is subject to the License Agreement or otherwise
material to the business of the Borrower or any subsidiary except for (i) such
licenses granted for the limited purpose of conducting sales or marketing
promotions in the ordinary course
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of business of existing or new products for a reasonable, limited time period,
(ii) such licenses approved by the Required Lenders in writing prior to the
granting thereof within 30 days after request therefor, such approval not to be
unreasonably withheld, and (iii) such licenses granted to any Material
Subsidiary party to the Intellectual Property Security Agreement who has
delivered an appropriate Intellectual Property Assignment executed in blank
with respect to such license.
ARTICLE XI
FINANCIAL COVENANTS
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless the
Required Lenders shall otherwise consent in writing, the Borrower and its
Subsidiaries on a consolidated basis will not:
SECTION 11.1 MINIMUM CONSOLIDATED FIXED CHARGE RATIO. Permit at any
time during any Four-Quarter Period of the Borrower the Consolidated Fixed
Charge Ratio to be less than:
Closing Date through December 31, 1998 1.25 to 1.00
January 1, 1999 and thereafter 1.50 to 1.00
SECTION 11.2 CONSOLIDATED LEVERAGE RATIO. Permit at any time during
any Four-Quarter Period of the Borrower ending during the periods set forth
below, the Consolidated Leverage Ratio at the end of each Four-Quarter Period
during such period to be equal to or less than the ratio set forth opposite
such period set forth below:
Closing Date through December 31, 1998 3.25 to 1.00
January 1, 1999 and thereafter 3.00 to 1.00
SECTION 11.3 CONSOLIDATED NET WORTH. Permit at any time Consolidated
Net Worth to be less than 85% of Consolidated Net Worth as of the Closing Date,
such amount to be increased as at the first day of each Fiscal Year, beginning
with the Fiscal Year ending December 31, 1999, by an amount equal to (a) fifty
percent (50%) of Consolidated Net Income during the immediately preceding
Fiscal Year, plus (b) one hundred percent (100%) of the Net Proceeds of any
Equity Offering consummated during the immediately preceding Fiscal Year;
provided, however, in no event shall the Consolidated Net Worth requirement be
decreased as a result of a net loss of the Borrower and its Subsidiaries (i.e.,
negative Consolidated Net Income) for any Fiscal Year. Any increase calculated
pursuant hereto shall be determined based upon financial statements delivered
in accordance with Section 9.1(a) hereof; provided, however such increase shall
be deemed effective as of the first day of the Fiscal Year in which such
financial statements are delivered.
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ARTICLE XII
EVENTS OF DEFAULT
SECTION 12.1 EVENTS OF DEFAULT. If any one or more of the following
events (herein called "Events of Default") shall occur for any reason
whatsoever (and whether such occurrence shall be voluntary or involuntary or
come about or be effected by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) a default shall be made in the due and punctual payment
of the principal of any Loan or Reimbursement Obligation, when and as
the same shall be due and payable whether pursuant to any provision of
Articles II or III hereof, at maturity, by acceleration or otherwise;
or
(b) a default shall be made in the due and punctual payment
of any amount of interest on any Loan or of any fees or other amounts
payable to the Lenders, the Agent or Issuing Bank under the Loan
Documents on the date on which the same shall be due and payable; or
(c) a default shall be made in the performance or observance
of any covenant set forth in Sections 9.10, 9.11, 9.12, 9.18 or
Articles X or XI hereof; or
(d) if (i) a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement or the Notes (other than as
described in clauses (a), (b) or (c) above) and such default shall
continue for thirty (30) or more days after the earlier of receipt of
notice of such default by the Authorized Representative from the Agent
or the Borrower becomes aware of such default, or (ii) a default shall
be made in the performance or observance of, or shall occur under, any
covenant, agreement or provision contained in any of the other Loan
Documents (beyond the applicable grace period, if any, contained
therein) or in any instrument or document evidencing or creating any
obligation, guaranty, or Lien in favor of the Agent or the Lenders or
delivered to the Agent or the Lenders in connection with or pursuant
to this Agreement or any of the Obligations, or (iii) without the
written consent of the Agent, this Agreement or any other Loan
Document shall be disaffirmed or shall terminate, be terminable or be
terminated or become void, invalid or unenforceable or otherwise cease
to be in full force and effect for any reason whatsoever other than
the occurrence of the Facility Termination Date; or (iv) the Borrower
or any Subsidiary shall assert the invalidity or unenforceability of
any of the Loan Documents or (v) any event or condition shall exist
which would reasonably be likely to have a material adverse effect on
(A) the ability of the Borrower or any Guarantor to pay or perform its
obligations, liabilities or indebtedness under any Loan Document or
(B) the material rights, powers or remedies of any Lender under any
Loan Document or the validity, legality or enforceability thereof; or
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(e) a default shall occur, which is not waived, (i) in the
payment of any principal, interest, premium or other amounts with
respect to any Indebtedness (other than the Obligations) of the
Borrower or of any Subsidiary, in an amount not less than $1,000,000
in the aggregate outstanding, or (ii) in the performance, observance
or fulfillment of any term or covenant contained in any agreement or
instrument under or pursuant to which any such Indebtedness may have
been issued, created, assumed, guaranteed or secured by the Borrower
or any Subsidiary, and such default shall continue for more than the
period of grace, if any, therein specified, or if such default shall
permit the holder of any such Indebtedness to accelerate the maturity
thereof; or
(f) if any material representation, warranty or other
statement of fact contained herein or any other Loan Document or in
any writing, certificate, report or statement at any time furnished to
the Agent or any Lender by or on behalf of the Borrower or any
Guarantor pursuant to or in connection with this Agreement or the
other Loan Documents, or otherwise, shall be false or misleading in
any material respect when given or made; or
(g) if the Borrower or any Guarantor shall be unable to pay
its debts generally as they become due; file a petition to take
advantage of any insolvency, reorganization, bankruptcy, receivership
or similar law, domestic or foreign; make an assignment for the
benefit of its creditors; commence a proceeding for the appointment of
a receiver, trustee, liquidator or conservator of itself or of the
whole or any substantial part of its property; file a petition or
answer seeking reorganization or arrangement or similar relief under
the Federal bankruptcy laws or any other applicable law or statute,
Federal, state or foreign; or
(h) if a court of competent jurisdiction shall enter an
order, judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or any Guarantor or of the
whole or any substantial part of its properties and such order,
judgment or decree continues unstayed and in effect for a period of
sixty (60) days, or approving a petition filed against the Borrower or
any Guarantor seeking reorganization or arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state or foreign
country, province or other political subdivision, which petition is
not dismissed within sixty (60) days; or if, under the provisions of
any other law for the relief or aid of debtors, a court of competent
jurisdiction shall assume custody or control of the Borrower or any
Guarantor or of the whole or any substantial part of its properties,
which control is not relinquished within sixty (60) days; or if there
is commenced against the Borrower or any Guarantor any proceeding or
petition seeking reorganization, arrangement or similar relief under
the Federal bankruptcy laws or any other applicable law or statute of
the United States of America or any state or foreign country, province
or other political subdivision which proceeding or petition remains
undismissed for a period of sixty (60) days; or if the Borrower or any
Guarantor takes any action to indicate its consent to or approval of
any such proceeding or petition; or
(i) if (i) any judgment where the amount not covered by
insurance (or the amount as to which the insurer denies liability) is
in excess of $1,500,000 is rendered against the Borrower or any
Guarantor, or (ii) there is any attachment, injunction or execution
against
84
any of the Borrower's or any Guarantor's properties for any amount in
excess of $1,500,000; and such judgment, attachment, injunction or
execution remains unpaid, unstayed, undischarged, unbonded or
undismissed for a period of sixty (60) days; or
(j) if the Borrower or any Guarantor shall suspend all or any
part of its operations and such suspension would reasonably be
expected to have a Material Adverse Effect; or
(k) if the Borrower or any Subsidiary shall default in the
payment of principal, interest, premium or other amounts under any
Swap Agreement and such breach shall continue beyond any grace period,
if any, relating thereto pursuant to its terms, or the Borrower or any
Subsidiary shall disaffirm or seek to disaffirm any Swap Agreement or
any of its Hedging Obligations thereunder; or
then, and in any such event and at any time thereafter, if such Event of
Default or any other Event of Default shall have not been waived,
(A) either or both of the following actions
may be taken: (i) the Agent may, and at the
direction of the Required Lenders shall, declare any
obligation of the Lenders to make further Loans or
issue Letters of Credit terminated, whereupon the
obligation of each Lender to make further Loans and
of Issuing Bank to issue Letters of Credit hereunder
shall terminate immediately, and (ii) the Agent
shall at the direction of the Required Lenders, at
their option, declare by notice to the Borrower any
or all of the Obligations to be immediately due and
payable, and the same, including all interest
accrued thereon and all other Obligations of the
Borrower to the Agent and the Lenders, shall
forthwith become immediately due and payable without
presentment, demand, protest, notice or other
formality of any kind, all of which are hereby
expressly waived, anything contained herein or in
any instrument evidencing the Obligations to the
contrary notwithstanding; provided, however, that
notwithstanding the above, if there shall occur an
Event of Default under clause (g) or (h) above, then
the obligation of the Lenders to make Advances and
issue Letters of Credit hereunder shall
automatically terminate and any and all of the
Obligations shall be immediately due and payable
without the necessity of any action by the Agent or
the Required Lenders or notice to the Agent or the
Lenders;
(B) The Borrower shall, upon demand of the
Agent or the Required Lenders, deposit cash with the
Agent in an amount equal to the amount of any Letter
of Credit Outstandings, as collateral security for
the repayment of any future drawings or payments
under such Letters of Credit, and such amounts shall
be held by the Agent pursuant to the terms of an LC
Account Agreement in the form of Exhibit K-1 hereto;
and
(C) the Agent and the Lenders shall have
all of the rights and remedies available under the
Loan Documents or under any applicable law.
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SECTION 12.2 AGENT TO ACT. In case any one or more Events of Default
shall occur and not have been waived, the Agent may, and at the direction of
the Required Lenders shall, proceed to protect and enforce their rights or
remedies either by suit in equity or by action at law, or both, whether for the
specific performance of any covenant, agreement or other provision contained
herein or in any other Loan Document, or to enforce the payment of the
Obligations or any other legal or equitable right or remedy.
SECTION 12.3 CUMULATIVE RIGHTS. No right or remedy herein conferred
upon the Lenders or the Agent is intended to be exclusive of any other rights
or remedies contained herein or in any other Loan Document, and every such
right or remedy shall be cumulative and shall be in addition to every other
such right or remedy contained herein and therein or now or hereafter existing
at law or in equity or by statute, or otherwise.
SECTION 12.4 NO WAIVER. No course of dealing between the Borrower and
any Lender or the Agent or any failure or delay on the part of any Lender or
the Agent in exercising any rights or remedies under any Loan Document or
otherwise available to it shall operate as a waiver of any rights or remedies
and no single or partial exercise of any rights or remedies shall operate as a
waiver or preclude the exercise of any other rights or remedies hereunder or of
the same right or remedy on a future occasion.
SECTION 12.5 ALLOCATION OF PROCEEDS. If an Event of Default has
occurred and not been waived, and the maturity of the Notes has been
accelerated pursuant to this Article 12, all payments received by the Agent
hereunder, in respect of any principal of or interest on the Obligations or any
other amounts payable by the Borrower hereunder shall be applied by the Agent
in the following order:
(a) amounts due to Issuing Bank and the Lenders pursuant to
Sections 3.13, 4.3, 9.14, 15.4 and 15.8 hereof;
(b) amounts due to (A) Issuing Bank pursuant to Section 4.4
hereof, and (B) to Issuing Bank and/or the Agent pursuant to Section
3.14 hereof;
(c) payments of interest on Loans and Reimbursement
Obligations;
(d) payments of principal on Loans and Reimbursement
Obligations;
(e) payment of cash amounts to the Agent in respect of
Letters of Credit Outstandings pursuant to Section 4.2(a) and 12.1(B)
hereof;
(f) payment of Obligations owed a Lender or Lenders pursuant
to Swap Agreements;
(g) payments of all other amounts due under this Agreement,
if any, to be applied for the ratable benefit of the Lenders; and
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(h) any surplus remaining after application as provided for
herein, to the Borrower or otherwise as may be required by applicable
law.
ARTICLE XIII
THE AGENT
SECTION 13.1 APPOINTMENT, POWERS, AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. The Agent (which term as used in this sentence and in
Section 13.5 and the first sentence of Section 13.6 hereof shall include its
affiliates and its own and its affiliates' officers, directors, employees, and
agents):
(a) shall not have any duties or responsibilities except
those expressly set forth in this Agreement and shall not be a trustee
or fiduciary for any Lender;
(b) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral) made
in or in connection with any Loan Document or any certificate or other
document referred to or provided for in, or received by any of them
under, any Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Loan Document, or
any other document referred to or provided for therein or for any
failure by the Borrower or any other Person to perform any of its
obligations thereunder;
(c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of
any covenants or agreements by the Borrower or any Guarantor or the
satisfaction of any condition or to inspect the property (including
the books and records) of the Borrower or any of its Subsidiaries or
affiliates;
(d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Loan Document; and
(e) shall not be responsible for any action taken or omitted
to be taken by it under or in connection with any Loan Document,
except for its own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
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SECTION 13.2 RELIANCE BY AGENT. The Agent shall be entitled to rely
upon any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telefacsimile)
believed by it to be genuine and correct and to have been signed, sent or made
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel for the Borrower or any Guarantor),
independent accountants, and other experts selected by the Agent. The Agent may
deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until the Agent receives and accepts an Assignment and
Acceptance executed in accordance with Section 13.1 hereof. As to any matters
not expressly provided for by this Agreement, the Agent shall not be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding on all of the Lenders; provided, however, that
the Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to any Loan Document or applicable law
or unless 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 any such action.
SECTION 13.3 DEFAULTS. The Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default or Event of Default unless the Agent
has received written notice thereof (i) from the Borrower or (ii) from a Lender
specifying such Default or Event of Default and stating that such notice is a
"Notice of Default". In the event that the Agent receives such a notice of the
occurrence of a Default or Event of Default, the Agent shall give prompt notice
thereof to the Lenders. The Agent shall (subject to Section 13.2 hereof) take
such action with respect to such Default or Event of Default as shall
reasonably be directed by the Required Lenders, provided that, unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interest of the Lenders.
SECTION 13.4 RIGHTS AS LENDER. With respect to its Term Loan
Commitment and Revolving Credit Commitment and the Loans made by it,
NationsBank (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. NationsBank (and any successor
acting as Agent) and its affiliates may (without having to account therefor to
any Lender) accept deposits from, lend money to, make investments in, provide
services to, and generally engage in any kind of lending, trust, or other
business with the Borrower or any of its Subsidiaries or affiliates as if it
were not acting as Agent, and NationsBank (and any successor acting as Agent)
and its affiliates may accept fees and other consideration from the Borrower or
any of its Subsidiaries or affiliates for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
SECTION 13.5 INDEMNIFICATION. The Lenders agree to indemnify the Agent
(to the extent not reimbursed under Section 15.8 hereof, but without limiting
the obligations of the Borrower under such Section) ratably in accordance with
their respective Revolving Credit Commitments and Term Loan Commitments, for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees), or disbursements
of any kind and nature
88
whatsoever that may be imposed on, incurred by or asserted against the Agent
(including by any Lender) in any way relating to or arising out of any Loan
Document or the transactions contemplated thereby or any action taken or
omitted by the Agent under any Loan Document; provided that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Person to be indemnified. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any costs or expenses payable by the
Borrower under Section 15.8, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Borrower. The agreements
contained in this Section 13.5 shall survive payment in full of the Loans and
all other amounts payable under this Agreement.
SECTION 13.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
agrees that it has, independently and without reliance on the Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and its Subsidiaries
and decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under the
Loan Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition, or business of the Borrower or any of its Subsidiaries or affiliates
that may come into the possession of the Agent or any of its affiliates.
SECTION 13.7 RESIGNATION OF AGENT. The Agent may resign at any time by
giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent which shall be a
commercial bank organized under the laws of the United States of America having
combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor, such successor shall
thereupon succeed to and become vested with all the rights, powers, discretion,
privileges, and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article XIII
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
SECTION 13.8 SHARING OF PAYMENTS, ETC. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, set-off, counterclaim
or otherwise, obtain payment with respect to its Obligations (other than
pursuant to Article V) which results in its receiving more than its pro rata
share of the aggregate payments with respect to all of the Obligations (other
than any payment expressly provided hereunder to be distributed on other than a
pro rata basis and payments pursuant to Article V), then (a) such Lender shall
be deemed to have simultaneously purchased from the other Lenders a share in
their Obligations so that the amount of the Obligations held by each of the
Lenders shall be pro rata and (b) such other adjustments shall be made from
time to time as shall be equitable to insure that the Lenders share such
payments ratably; provided, however, that for
89
purposes of this Section 13.8 the term "pro rata" shall be determined with
respect to the Term Loan Commitment and Revolving Credit Commitment of each
Lender and with respect to the Total Credit Commitments after subtraction in
each case of amounts, if any, by which any such Lender has not funded its share
of the outstanding Loans and Obligations. If all or any portion of any such
excess payment is thereafter recovered from the Lender which received the same,
the purchase provided in this Section 13.8 shall be rescinded to the extent of
such recovery, without interest. The Borrowers expressly consents to the
foregoing arrangements and agrees that each Lender so purchasing a portion of
the other Lenders' Obligations may exercise all rights of payment (including,
without limitation, all rights of set-off, banker's lien or counterclaim) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
SECTION 13.9 FEES. The Borrower agrees to pay to the Agent, for its
individual account, an annual Agent's fee as from time to time agreed to by the
Borrower and the Agent in writing.
ARTICLE XIV
ASSIGNMENTS AND PARTICIPATIONS
SECTION 14.1 ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Loans, its Notes, and its Term Loan Commitment and Revolving
Credit Commitment); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this Agreement,
any such partial assignment shall be in an amount at least equal to $5,000,000
or an integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and obligations
under this Agreement and the Note;
(iv) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance, together with any
Note subject to such assignment and a processing fee of $3,500; and
(v) an assignment (other than an assignment of 100% of its
interest) by NationsBank shall not include any portion of the obligation to
issue Letters of Credit.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder
and the assigning Lender shall, to the extent of such assignment, relinquish
its rights and be released from its obligations under this Agreement. Upon the
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consummation of any assignment pursuant to this Section, the assignor, the
Agent and the Borrower shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee. If the
assignee is not incorporated under the laws of the United States of America or
a state thereof, it shall deliver to the Borrower and the Agent certification
as to exemption from deduction or withholding of Taxes in accordance with
Section 5.6.
(b) The Agent shall maintain at its address referred to in Section
15.1 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders
and the Revolving Credit Commitment and Term Loan Commitment of, and principal
amount of the Loans owing to, each Lender from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit B hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein
in the Register and (iii) give prompt notice thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons in all
or a portion of its rights and/or obligations under this Agreement (including
all or a portion of its Term Loan Commitment and Revolving Credit Commitment
and its Loans); provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such participations shall be in a
minimum amount of $2,500,000 and shall include an allocable portion of such
Lender's Participations, (iii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iv) the
participant shall be entitled to the benefit of the yield protection provisions
contained in Article V and the right of set-off contained in Section 15.2, and
(v) the Borrowers shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement,
and such Lender shall retain the sole right to enforce the obligations of the
Borrowers relating to its Loans and its Note and to approve any amendment,
modification, or waiver of any provision of this Agreement (other than
amendments, modifications, or waivers requiring approval of all the Lenders as
set forth in Section 15.5 hereof.)
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its Loans
and its Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any operating circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its obligations
hereunder.
(f) Any Lender may furnish any information concerning the Borrower or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants).
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ARTICLE XV
GENERAL PROVISIONS
SECTION 15.1 NOTICES. All notices shall be in writing, except as to
telephonic notices expressly permitted or required herein, and written notices
shall be delivered by hand delivery, telefacsimile, overnight courier or
certified or registered mail. Any notice shall be conclusively deemed to have
been received by any party hereto and be effective on the day on which
delivered to such party (against (except as to telephonic or telefacsimile
notice) receipt therefor or, in the case of telex, verification by return) at
the address set forth below or such other address as such party shall specify
to the other parties in writing, or if sent prepaid by certified or registered
mail return receipt requested on the third Business Day after the day on which
mailed, addressed to such party at said address:
(a) if to the Borrower:
Lumen Technologies, Inc.
000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, Xxx Xxxx 00000
Attention: Mr. Ian X. X. Xxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with copies to:
Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(b) if to the Agent:
NationsBank, National Association
Independence Center, NC1 000-00-00
15th Floor
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxx, Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
92
with a copy to:
NationsBank, National Association
Corporate Banking
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxx Xxxxxxxxx, Senior Vice President
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(c) if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each Assignment
and Acceptance.
SECTION 15.2 SETOFF. Upon the occurrence and during the continuance of
any Event of Default, each Lender (and each of its affiliates) is hereby
authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender (or any of its affiliates) to or for the credit or
the account of the Borrower against any and all of the Obligations of the
Borrower now or hereafter existing under this Agreement and the Note held by
such Lender, irrespective of whether such Lender shall have made any demand
under this Agreement or such Note and although such Obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower after any such
set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 15.2 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
SECTION 15.3 SURVIVAL. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the expiration of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect until the Facility Termination Date, unless continuing thereafter in
accordance with their terms. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and permitted assigns of such party and all covenants, provisions and
agreements by or on behalf of the Borrower which are contained in this
Agreement, the Notes and the other Loan Documents shall inure to the benefit of
the successors and permitted assigns of the Lenders or any of them.
SECTION 15.4 EXPENSES. The Borrower agrees (a) to pay or reimburse the
Agent for all its reasonable out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation and execution of, and any
amendment, supplement or modification to, this Agreement or any of the other
Loan Documents, and the consummation of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Agent, (b) to pay or reimburse the Agent and
each of the Lenders for all their reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement and the other Loan Documents, including without limitation, the
reasonable fees and
93
disbursements of counsel of the Agent and of each Lender and any payments in
indemnification (other than, with respect to any Lender, payments of
indemnification arising directly as a result of the gross negligence or willful
misconduct of such Lender) or otherwise payable by the Lenders to the Agent
pursuant to the Loan Documents and (c) to pay, indemnify and hold the Agent and
the Lenders harmless from any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any failure to pay or delay in
paying, documentary, stamp, excise and other similar taxes, if any, which may
be payable or determined to be payable in connection with the execution and
delivery of this Agreement or any other Loan Documents, or consummation of any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Agreement or any other Loan Documents.
SECTION 15.5 AMENDMENTS. Any provision of this Agreement or any other
Loan Document may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrowers and the Required Lenders
(and, if Article XI or the rights or duties of the Agent are affected thereby,
by the Agent); provided that no such amendment or waiver shall, unless signed
by all the Lenders, (i) increase the Revolving Credit Commitments or Term Loan
Commitments of the Lenders, (ii) reduce the principal of or rate of interest on
any Loan or any fees or other amounts payable hereunder, (iii) postpone any
date fixed for the payment of any scheduled installment of principal of or
interest on any Loan or any fees or other amounts payable hereunder or for
termination of any Term Loan Commitment or Revolving Credit Commitment, (iv)
change the percentage of the Term Loan Commitments or the Revolving Credit
Commitments or of the unpaid principal amount of the Notes, or the number of
Lenders, which shall be required for the Lenders or any of them to take any
action under this Section 15.5 or any other provision of this Agreement, (v)
release any Guarantor or any Liens in favor of the Agent or the Lenders
covering any material portion of the Collateral or (vi) change the provisions
of Section 2.7 hereof and this Section 15.5; and provided, further, that no
such amendment or waiver that affects the rights, privileges or obligations of
the Issuing Bank as issuer of Letters of Credit, shall be effective unless
signed in writing by the Issuing Bank;
Notwithstanding any provision of the other Loan Documents to the contrary, as
between the Agent and the Lenders, execution by the Agent shall not be deemed
conclusive evidence that the Agent has obtained the written consent of the
Required Lenders. No notice to or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances, except as otherwise expressly provided herein. No delay or
omission on any Lender's or the Agent's part in exercising any right, remedy or
option shall operate as a waiver of such or any other right, remedy or option
or of any Default or Event of Default.
SECTION 15.6 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one copy of this Agreement
containing all original, fully-executed counterpart signature pages.
SECTION 15.7 TERMINATION. The termination of this Agreement shall not
affect any rights of the Borrower, the Lenders or the Agent or any obligation
of the Borrower, the Lenders or the Agent, arising prior to the effective date
of such termination, and the provisions hereof shall
94
continue to be fully operative until all transactions entered into or rights
created or obligations incurred prior to such termination have been fully
disposed of, concluded or liquidated and the Facility Termination Date shall
have occurred unless such rights continue thereafter in accordance with their
terms. The rights granted to the Agent for the benefit of the Lenders hereunder
and under the other Loan Documents shall continue in full force and effect,
notwithstanding the termination of this Agreement, until the Facility
Termination Date shall have occurred unless such rights continue thereafter in
accordance with their terms or the Borrower has furnished the Lenders and the
Agent with an indemnification satisfactory to the Agent and each Lender with
respect thereto. All representations, warranties, covenants, waivers and
agreements contained herein shall survive execution hereof until the Facility
Termination Date unless otherwise provided herein. Notwithstanding the
foregoing, if after receipt of any payment pursuant to the Loan Documents of
all or any part of the Obligations, any Lender is for any reason compelled to
surrender such payment to any Person because such payment is determined to be
void or voidable as a preference, impermissible setoff, a diversion of trust
funds or for any other reason, this Agreement shall continue in full force and
the Borrower shall be liable to, and shall indemnify and hold such Lender
harmless for, the amount of such payment surrendered until such Lender shall
have been finally and irrevocably paid in full. The provisions of the foregoing
sentence shall be and remain effective notwithstanding any contrary action
which may have been taken by the Lenders in reliance upon such payment, and
any such contrary action so taken shall be without prejudice to the Lenders'
rights under this Agreement and shall be deemed to have been conditioned upon
such payment having become final and irrevocable.
SECTION 15.8 INDEMNIFICATION.
(a) In consideration of the execution and delivery of this Agreement
by the Agent and each Lender and the extension of the Term Loan Commitments,
the Revolving Credit Commitments and the Letter of Credit Commitments, the
Borrower hereby indemnifies, exonerates and holds the Agent and each Lender and
each of their respective officers, directors, employees and agents
(collectively, the "Indemnified Parties") free and harmless from and against
any and all actions, causes of action, suits, losses, costs, liabilities and
damages, and expenses (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees, settlement costs and disbursements (collectively,
the "Indemnified Liabilities"), incurred by the Indemnified Parties or any of
them as a result of, or arising out of, any of the Loan Documents or the
matters contemplated therein, or relating to any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of any
Loan or supported by any Letter of Credit, except for any such Indemnified
Liabilities arising for the account of a particular Indemnified Party by reason
of the gross negligence or willful misconduct of such Indemnified Party, and if
and to the extent that the foregoing undertaking may be unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. This Section 15.8 supersedes any prior
agreements of the parties as to indemnification or limits on liability and the
provisions hereof shall survive repayment of the Obligations, the occurrence of
the Facility Termination Date and the expiration or termination of this
Agreement. The Borrower agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to it,
any of its Subsidiaries, any Guarantor, or any security holders or creditors
thereof arising out
95
of, related to or in connection with the transactions contemplated herein,
except to the extent that such liability is found in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct; provided, however,
in no event shall any Indemnified Party be liable for punitive, consequential,
indirect or special damages, as opposed to direct damages.
(b) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 15.8 shall survive the payment in full of the Loans and all other
amounts payable under this Agreement.
SECTION 15.9 HEADINGS AND REFERENCES. The headings of the Articles and
Sections of this Agreement are inserted for convenience of reference only and
are not intended to be a part of, or to affect the meaning or interpretation of
this Agreement. Words such as "hereof", "hereunder", "herein" and words of
similar import shall refer to this Agreement in its entirety and not to any
particular Section or provisions hereof, unless so expressly specified. As used
herein, the singular shall include the plural, and the masculine shall include
the feminine or a neutral gender, and vice versa, whenever the context
requires.
SECTION 15.10 SEVERABILITY. If any provision of this Agreement or the
other Loan Documents shall be determined to be illegal or invalid as to one or
more of the parties hereto, then such provision shall remain in effect with
respect to all parties, if any, as to whom such provision is neither illegal
nor invalid, and in any event all other provisions hereof shall remain
effective and binding on the parties hereto.
SECTION 15.11 ENTIRE AGREEMENT. This Agreement, together with the
other Loan Documents, constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all previous proposals,
negotiations, representations, commitments and other communications between or
among the parties, both oral and written, with respect thereto.
SECTION 15.12 AGREEMENT CONTROLS. In the event that any term of any of
the Loan Documents other than this Agreement conflicts with any term of this
Agreement, the terms and provisions of this Agreement shall control.
SECTION 15.13 USURY SAVINGS CLAUSE. Anything in this Agreement or the
Notes to the contrary notwithstanding, the obligation of the Borrower to make
payments of interest shall be subject to the limitation that payments of
interest shall not be required to be made to the extent that a Lender's receipt
thereof would not be permissible under the law or laws applicable to it
limiting rates of interest which may be charged or collected by it. Any such
amount of interest which is not paid as a result of the limitation referred to
in the preceding sentence shall be carried forward and paid by the Borrower to
such Lender on the earliest date or dates on which any interest is payable
under this Agreement and on which the receipt thereof is permissible under the
laws applicable to such Lender limiting rates of interest which may be charged
or collected by such Lender. Such payment shall be made as additional interest
for the month preceding such interest payment date. Such deferred payments
shall not bear interest.
96
SECTION 15.14 GOVERNING LAW; WAIVERS.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
(B) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE XXXXXX
XX XXX XXXX, XXXXX XX XXX XXXX, XXXXXX XXXXXX OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES ANY
OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE
OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION
OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(C) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE ON
SUCH PARTY BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT
OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY
REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF EACH
PARTY PROVIDED BY SECTION 15.1 HEREOF, OR BY ANY OTHER METHOD OF
SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE
OF NEW YORK.
(D) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL
PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS IN THE COURTS OF ANY PLACE WHERE ANY PARTY OR ANY PARTY'S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY
THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR HEREAFTER,
BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE, MAY BE
AVAILABLE TO IT.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
97
DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH
THE FOREGOING, EACH PARTY HEREBY AGREES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH
ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[Signatures on following pages.]
98
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
BORROWER:
LUMEN TECHNOLOGIES, INC.
By: /s/ Xxxxxxx XxXxxxxxx
-----------------------------------
Name: Xxxxxxx XxXxxxxxx
---------------------------------
Title: Vice President of Finance
--------------------------------
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxx
---------------------------------
Title: Senior Vice President
--------------------------------
LUMEN CREDIT AGREEMENT
Signature Page 1 of 7
LENDERS:
NATIONSBANK, NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxx
---------------------------------
Title: Senior Vice President
--------------------------------
Lending Office:
NationsBank, National Association
Independence Center
NC1 000-00-00, 15th Floor
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
NationsBank, National Association
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
ABA No.: 000000000
Reference: Lumen Technologies, Inc.
Account No.: 136621-22506
Attention: Corporate Credit Support
LUMEN CREDIT AGREEMENT
Signature Page 2 of 7
EUROPEAN AMERICAN BANK
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Lending Office:
European American Bank
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx,
Administrative Assistant
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
European American Bank
Xxx XXX Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
ABA No.: 021 001 486
Reference: Lumen Technologies, Inc.
Account No.: K890222220
Attention: Commercial Loans Dept.
LUMEN CREDIT AGREEMENT
Signature Page 3 of 7
NATIONAL CITY BANK OF KENTUCKY
By: /s/ Xxx Xxxxxx
-----------------------------------
Name: Xxx Xxxxxx
---------------------------------
Title: Vice President
--------------------------------
Lending Office:
000 Xxxxx 0xx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Commercial Loan Operations
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
National City Bank of Kentucky
000 Xxxxx 0xx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
ABA No.: 000-000-000
Reference: Lumen Technologies, Inc.
Attention: Xxxx Xxxxx
Commercial Loan Operations
LUMEN CREDIT AGREEMENT
Signature Page 4 of 7
BANKBOSTON, N.A.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director
Lending Office:
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
BankBoston, N.A.
ABA No.: 000000000
Reference: Lumen Technologies, Inc.
Account No.: 551-74538, Connecticut
Zero Balance Account
Attention: Xxxx XxXxxxx
LUMEN CREDIT AGREEMENT
Signature Page 5 of 7
CREDIT AGRICOLE INDOSUEZ
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxx X.Solomet
-------------------------------- -----------------------------------
Name: Xxxxx Xxxxx Name: Xxxxxx X. Solomet
---------------------------------
Title: First Vice President Title: Vice President
--------------------------------
Lending Office:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx XxXxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
Citibank N.A.
New York, New York
ABA No.: 000000000
Swift: Citius33
Reference: Lumen Technologies, Inc.
Account No.: Credit Agricole Indosuez
Account # 00000000
LUMEN CREDIT AGREEMENT
Signature Page 6 of 7
IMPERIAL BANK
By: /s/ Ray Vadalina
-----------------------------------
Name: Ray Vadalina
---------------------------------
Title: Senior Vice President
--------------------------------
Lending Office:
0000 Xxxxx Xx Xxxxxxx Xxxxxxxxx,
00xx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
Imperial Bank
ABA No.: 000000000
Reference: Lumen Technologies, Inc.
Account No.: 0000-000-000
Attention: LPIG #2405
LUMEN CREDIT AGREEMENT
Signature Page 7 of 7
SECOND AMENDED AND RESTATED GUARANTY AGREEMENT
THIS SECOND AMENDED AND RESTATED GUARANTY AGREEMENT (this
"Guaranty Agreement" or this "Guaranty"), dated as of March 12, 1998 is made by
EACH OF THE UNDERSIGNED (each a "Guarantor" and collectively the "Guarantors")
to NATIONSBANK, NATIONAL ASSOCIATION, a national banking association, as Agent
(the "Agent") for each of the lenders now or hereafter party to the Credit
Agreement (as defined below) (each a "Lender" and collectively the "Lenders").
W I T N E S S E T H:
WHEREAS, Lumen Technologies, Inc., a Delaware corporation formerly
known as BEC Group, Inc. (the "Borrower"), the Agent and certain of the Lenders
have entered into that certain Amended and Restated Credit Agreement dated as
of July 10, 1997 (as amended, supplemented or otherwise modified as of the date
hereof, the "Existing Credit Agreement"); and
WHEREAS, the Borrower, the Lenders and the Agent have agreed to amend
and restate the Existing Credit Agreement in its entirety pursuant to that
certain Second Amended and Restated Credit Agreement dated as of the date
hereof among the Borrower, the Agent and the Lenders (as from time to time
amended, supplemented or restated, the "Credit Agreement"); and
WHEREAS, certain of the Guarantors are parties to that certain Amended
and Restated Subsidiary Guaranty Agreement dated as of July 10, 1997 with the
Agent (as amended, supplemented or otherwise modified as of the date hereof,
the "Existing Subsidiary Guaranty"); and
WHEREAS, the Guarantors, the Agent, and the Lenders desire to amend
and restate the Existing Subsidiary Guaranty in its entirety to reflect changes
in the parties required to be parties thereto and certain changes in the Credit
Agreement; and
WHEREAS, the Guarantors are Material Subsidiaries and will materially
benefit from the loans and advances made and to be made, and the letters of
credit issued and to be issued, under the Credit Agreement;
NOW, THEREFORE, in order to induce the Lenders and the Agent to enter
into the Credit Agreement and to make and continue the loans and advances
thereunder, and to issue letters of credit for the account of the Borrower, and
in consideration of the mutual covenants and agreements contained herein, each
Guarantor amends and restates the Existing Subsidiary Guaranty in its entirety
as follows:
I. DEFINITIONS. All capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
1. GUARANTY. Each Guarantor hereby jointly and severally,
unconditionally, absolutely, continually and irrevocably guarantees to the
Agent and the Lenders the payment and performance
in full of the Borrower's Liabilities (as defined below). For all purposes of
this Guaranty Agreement, "Borrower's Liabilities" means: (a) the Borrower's
prompt payment in full, when due or declared due and at all such times, of all
Obligations and all other amounts pursuant to the terms of the Credit
Agreement, the Notes, and all other Loan Documents executed in connection with
the Credit Agreement and all Hedging Obligations heretofore, now or at any time
or times hereafter owing, arising, due or payable from the Borrower to the
Lenders, including without limitation principal, interest, premium or fee
(including, but not limited to, loan fees and attorneys' fees and expenses);
and (b) the Borrower's prompt, full and faithful performance, observance and
discharge of each and every agreement, undertaking, covenant and provision to
be performed, observed or discharged by the Borrower under the Credit Agreement
and all other Loan Documents executed in connection therewith and all Swap
Agreements. The Guarantors' obligations to the Agent and the Lenders under this
Guaranty Agreement are hereinafter collectively referred to as the "Guarantors'
Obligations"; provided, however, that the liability of each Guarantor
individually, with respect to the Guarantor's Obligations shall be limited to
an aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the United
States Bankruptcy Code or any comparable provisions of any applicable state
law.
Each Guarantor agrees that it is jointly and severally, directly and
primarily liable for the Borrower's Liabilities.
2. PAYMENT. If the Borrower shall default in payment or performance of
any Borrower's Liabilities, whether principal, interest, premium, fee
(including, but not limited to, loan fees and attorneys' fees and expenses), or
otherwise, when and as the same shall become due, whether according to the
terms of the Credit Agreement, by acceleration, or otherwise, or upon the
occurrence of any Default or Event of Default under the Credit Agreement that
has not been cured or waived, then any or all of the Guarantors will, upon
demand thereof by the Agent or its successors or assigns as of the date of the
Agent's demand, fully pay to the Agent, for the benefit of the Lenders, subject
to any restriction set forth in Section 2 hereof, an amount equal to all
Guarantors' Obligations then due and owing.
3. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and not of
collection. The Guarantors' Obligations under this Guaranty Agreement shall be
absolute and unconditional irrespective of the validity, legality or
enforceability of the Credit Agreement, the Notes or any other Loan Document or
any other guaranty of the Borrower's Liabilities, and shall not be affected by
any action taken under the Credit Agreement, the Notes or any other Loan
Document, any other guaranty of the Borrower's Liabilities, or any other
agreement between the Agent or the Lenders and the Borrower or any other
Person, in the exercise of any right or power therein conferred, or by any
failure or omission to enforce any right conferred thereby, or by any waiver of
any covenant or condition therein provided, or by any acceleration of the
maturity of any of the Borrower's Liabilities, or by the release or other
disposal of any security for any of the Borrower's Liabilities, or by the
dissolution of the Borrower or the combination or consolidation of the Borrower
into or with another entity or any transfer or disposition of any assets of the
Borrower or by any extension or renewal of the Credit Agreement, any of the
Notes or any other Loan Document, in whole or in part, or by any modification,
alteration, amendment or addition of or to the Credit Agreement, any of the
Notes or any other Loan Document, any other guaranty of the Borrower's
Liabilities, or any other agreement
2
between the Agent or the Lenders and the Borrower or any other Person, or by
any other circumstance whatsoever (with or without notice to or knowledge of
any Guarantor) which may or might in any manner or to any extent vary the risks
of such Guarantor, or might otherwise constitute a legal or equitable discharge
of a surety or a guarantor; it being the purpose and intent of the parties
hereto that this Guaranty Agreement and the Guarantors' Obligations hereunder
shall be absolute and unconditional under any and all circumstances and shall
not be discharged except by payment as herein provided.
4. CURRENCY AND FUNDS OF PAYMENT. Each Guarantor hereby guarantees
that the Guarantors' Obligations will be paid in lawful currency of the United
States of America and in immediately available funds, regardless of any law,
regulation or decree now or hereafter in effect that might in any manner affect
the Borrower's Liabilities, or the rights of the Agent or any Lender with
respect thereto as against the Borrower, or cause or permit to be invoked any
alteration in the time, amount or manner of payment by the Borrower of any or
all of the Borrower's Liabilities.
5. EVENTS OF DEFAULT. In the event that (a) a Guarantor shall file a
petition to take advantage of any insolvency statute; (b) a Guarantor shall
commence or suffer to exist a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or of the whole or substantially
all of its property; (c) a Guarantor shall file a petition or answer seeking
reorganization or arrangement or similar relief under the Federal bankruptcy
laws or any other applicable law or statute of the United States of America or
any state or similar law of any other country; (d) a court of competent
jurisdiction shall enter an order, judgment or decree appointing a custodian,
receiver, trustee, liquidator or conservator of a Guarantor or of the whole or
substantially all of its properties, or approve a petition filed against a
Guarantor seeking reorganization or arrangement or similar relief under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country, or if,
under the provisions of any other law for the relief or aid of debtors, a court
of competent jurisdiction shall assume custody or control of a Guarantor or of
the whole or substantially all of its properties and such order, judgment,
decree, approval or assumption remains unstayed or undismissed for a period of
sixty (60) consecutive days; (e) there is commenced against a Guarantor any
proceeding or petition seeking reorganization, arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state, which proceeding or petition remains
unstayed or undismissed for a period of sixty (60) consecutive days; (f) there
shall occur an Event of Default under the Credit Agreement; or (g) any default
shall occur in the payment of amounts due hereunder (each of the foregoing an
"Event of Default" hereunder); then notwithstanding any collateral that the
Lenders may possess from Borrower, such Guarantor, any other Guarantor or any
other guarantor of the Borrower's Liabilities, or any other party, at the
Agent's election and without notice thereof or demand therefor, so long as such
Event of Default shall be continuing, the Guarantors' Obligations shall
immediately become due and payable.
6. SUITS. Each Guarantor from time to time shall pay to the Agent for
the benefit of the Lenders, on demand, at the Agent's place of business set
forth in the Credit Agreement, the Guarantors' Obligations as they become or
are declared due, and in the event such payment is not made forthwith, the
Agent or the Lenders or any of them may proceed to suit against such Guarantor.
At the Agent's election, one or more and successive or concurrent suits may be
brought hereon by
3
the Agent against any Guarantor, whether or not suit has been commenced against
the Borrower, any other Guarantor or any other guarantor of the Borrower's
Liabilities, or any other Person and whether or not the Agent or any Lender has
taken or failed to take any other action to collect all or any portion of the
Borrower's Liabilities.
7. SET-OFF AND WAIVER. Each Guarantor waives any right to assert
against the Agent and the Lenders as a defense, counterclaim, set-off or cross
claim, any defense (legal or equitable) or other claim which each Guarantor may
now or at any time hereafter have against the Borrower, the Agent or the
Lenders, without waiving any additional defenses, set-offs, counterclaims or
other claims otherwise available to such Guarantor. If at any time hereafter
the Agent or any Lender employs counsel for advice or other representation to
enforce the Guarantors' Obligations that arise out of an Event of Default,
then, in any of the foregoing events, all of the reasonable attorneys' fees
arising from such services and all expenses, costs and charges in any way or
respect arising in connection therewith or relating thereto shall be paid by
such Guarantor to the Agent, for the benefit of the Lenders, on demand.
8. WAIVER; SUBROGATION.
(a) Each Guarantor hereby waives notice of the following events or
occurrences: (i) the Agent's acceptance of this Guaranty Agreement; (ii) the
Lenders' heretofore, now or from time to time hereafter loaning monies or
giving or extending credit to or for the benefit of the Borrower, whether
pursuant to the Credit Agreement or the Notes or any amendments, modifications,
or supplements thereto, or replacements or extensions thereof; (iii) the Agent,
the Lenders or the Borrower heretofore, now or at any time hereafter,
obtaining, amending, sub stituting for, releasing, waiving or modifying the
Credit Agreement, the Notes or any other Loan Documents; (iv) presentment,
demand, default, non-payment, partial payment and protest; (v) the Agent or the
Lenders heretofore, now or at any time hereafter granting to the Borrower (or
any other party liable to the Lenders on account of the Borrower's Liabilities)
any indulgence or extensions of time of payment of the Borrower's Liabilities;
and (vi) the Agent or the Lenders heretofore, now or at any time hereafter
accepting from the Borrower, any other Guarantor, any other guarantor of the
Borrower's Liabilities or any other Person, any partial payment or payments on
account of the Borrower's Liabilities or any collateral securing the payment
thereof or the Agent settling, subordinating, compromising, discharging or
releasing the same. Each Guarantor agrees that the Agent and each Lender may
heretofore, now or at any time hereafter do any or all of the foregoing in such
manner, upon such terms and at such times as the Agent and each Lender, in its
sole and absolute discretion, deems advisable, without in any way or respect
impairing, affecting, reducing or releasing such Guarantor from the Guarantors'
Obligations, and each Guarantor hereby consents to each and all of the
foregoing events or occurrences.
(b) Each Guarantor hereby agrees that payment or performance by such
Guarantor of the Guarantors' Obligations under this Guaranty Agreement may be
enforced by the Agent on behalf of the Lenders upon demand by the Agent to such
Guarantor without the Agent being required, such Guarantor expressly waiving
any right it may have to require the Agent, to (i) prosecute collection or seek
to enforce or resort to any remedies against the Borrower or any other
Guarantor or any other guarantor of the Borrower's Liabilities, IT BEING
EXPRESSLY UNDERSTOOD,
4
ACKNOWLEDGED AND AGREED TO BY SUCH GUARANTOR THAT DEMAND UNDER THIS GUARANTY
AGREEMENT MAY BE MADE BY THE AGENT, AND THE PROVISIONS HEREOF ENFORCED BY THE
AGENT, EFFECTIVE AS OF THE FIRST DATE ANY EVENT OF DEFAULT OCCURS AND IS
CONTINUING UNDER THE CREDIT AGREEMENT, or (ii) seek to enforce or resort to any
remedies with respect to any security interests, Liens or encumbrances granted
to the Agent by the Borrower, any other Guarantor or any other Person on
account of the Borrower's Liabilities or any guaranty thereof. Neither the
Agent nor any Lender shall have any obligation to protect, secure or insure any
of the foregoing security interests, Liens or encumbrances on the properties or
interests in properties subject thereto. The Guarantors' Obligations shall in
no way be impaired, affected, reduced, or released by reason of the Agent's or
any Lender's failure or delay to do or take any of the acts, actions or things
described in this Guaranty including, without limiting the generality of the
foregoing, those acts, actions and things described in this Section 9.
(c) Each Guarantor further agrees with respect to this Guaranty that
such Guarantor shall have no right of subrogation, reimbursement or indemnity,
nor any right of recourse to security for the Borrower's Liabilities until the
Facility Termination Date.
9. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall be
effective as of the date of the initial Advance under the Credit Agreement and
shall continue in full force and effect until the Facility Termination Date.
The Agent shall give each Guarantor written notice of such termination in
accordance with Section 17 hereof. This Guaranty Agreement shall be binding
upon and inure to the benefit of each Guarantor, the Agent and the Lenders and
their respective successors and assigns. Notwithstanding the foregoing, no
Guarantor may, without the prior written consent of the Agent, assign any
rights, powers, duties or obligations hereunder. Any claim or claims that the
Agent and the Lenders may at any time hereafter have against a Guarantor under
this Guaranty Agreement may be asserted by the Agent or any Lender by written
notice directed to such Guarantor.
10. REPRESENTATIONS AND WARRANTIES. Each Guarantor warrants and
represents to the Agent for the benefit of the Lenders that it is duly
authorized to execute, deliver and perform this Guaranty Agreement, that this
Guaranty Agreement is legal, valid, binding and enforceable against such
Guarantor in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles; and that such Guarantor's execution, delivery and performance of
this Guaranty Agreement do not violate or constitute a breach of its
certificate of incorporation or other documents of corporate governance or any
agreement to which such Guarantor is a party, or any applicable laws, in each
case, which violation or breach would reasonably be expected to have a Material
Adverse Effect.
11. EXPENSES. Each Guarantor agrees to be liable for the payment of
all reasonable fees and expenses, including attorney's fees, incurred by the
Agent in connection with the enforcement of this Guaranty Agreement.
5
12. REINSTATEMENT. Each Guarantor agrees that this Guaranty Agreement
shall continue to be effective or be reinstated, as the case may be, at any
time payment received by the Agent under the Credit Agreement or this Guaranty
Agreement is rescinded or must be restored for any reason.
13. COUNTERPARTS. This Guaranty Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
constitute one and the same instrument.
14. RELIANCE. Each Guarantor represents and warrants to the Agent, for
the benefit of the Agent and the Lenders, that: (a) such Guarantor has adequate
means to obtain from Borrower, on a continuing basis, information concerning
Borrower and Borrower's financial condition and affairs and has full and
complete access to Borrower's books and records; (b) such Guarantor is not
relying on the Agent or any Lender, its or their employees, agents or other
representatives, to provide such information, now or in the future; (c) such
Guarantor is executing this Guaranty Agreement freely and deliberately, and
understands the obligations and financial risk undertaken by providing this
Guaranty; (d) such Guarantor has relied solely on the Guarantor's own
independent investigation, appraisal and analysis of Borrower and Borrower's
financial condition and affairs in deciding to provide this Guaranty and is
fully aware of the same; and (e) such Guarantor has not depended or relied on
the Agent or any Lender, its or their employees, agents or representatives, for
any information whatsoever concerning Borrower or Borrower's financial
condition and affairs or other matters material to such Guarantor's decision to
provide this Guaranty or for any counselling, guidance, or special
consideration or any promise therefor with respect to such decision. Each
Guarantor agrees that neither the Agent nor any Lender has any duty or
responsibility whatsoever, now or in the future, to provide to such Guarantor
any information concerning Borrower or Borrower's financial condition and
affairs, other than as expressly provided herein, and that, if such Guarantor
receives any such information from the Agent or any Lender, its or their
employees, agents or other representatives, such Guarantor will independently
verify the information and will not rely on the Agent or any Lender, its or
their employees, agents or other representatives, with respect to such
information.
15. TERMINATION. This Guaranty Agreement and all obligations of the
Guarantors hereunder shall terminate without delivery of any instrument or
performance of any act by any party on the Facility Termination Date.
16. NOTICE. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telefacsimile (where the receipt
of such message is verified by return) expressly provided for hereunder, when
received at such telephone or telefacsimile number as may from time to time be
specified in written notice to the other parties hereto or otherwise received),
or if sent prepaid by certified or registered mail return receipt requested on
the third Business Day after the day on which mailed, or if sent prepaid by a
national overnight courier service, on the first Business Day after the day on
which delivered to such service against receipt therefor, addressed to such
party at said address:
6
(a) if to the Borrower c/o Lumen Technologies, Inc.
or any Guarantor: 000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, Xxx Xxxx 00000
Attention: Mr. Ian X.X. Xxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to: Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(b) if to the Agent: NationsBank, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxx, Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to: NationsBank, National Association
Corporate Banking
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxx Xxxxxxxxx,Senior Vice President
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
or to such other address as each party may designate for itself by like notice
given in accordance with this Section 17.
17. GOVERNING LAW.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
(B) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE XXXXXX
XX XXX XXXX, XXXXX XX XXX XXXX, XXXXXX XXXXXX OF AMERICA AND, BY THE
7
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES ANY
OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE
OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION
OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(C) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) AND IN ACCORDANCE WITH SECTION 17
HEREOF OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.
(D) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL
PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS IN THE COURTS OF ANY PLACE WHERE ANY OTHER PARTY OR ANY OF
SUCH PARTY'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT
PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH PARTY
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR HEREAFTER,
BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE, MAY BE
AVAILABLE TO IT.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH PARTY
HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY AND EACH PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[SIGNATURE PAGE FOLLOWS.]
8
IN WITNESS WHEREOF, the parties have duly executed this Second Amended
and Restated Guaranty Agreement on the day and year first written above.
GUARANTORS:
BILC ACQUISITION CORP., which is
the surviving corporation in a
merger with ILC TECHNOLOGY, INC.
effective on the date hereof and
simultaneously therewith changed
its name to ILC Technology, Inc.
By: /s/ Xxxxxxx XxXxxxxxx
------------------------------
Name: Xxxxxxx XxXxxxxxx
----------------------------
Title: Vice President
---------------------------
ORC TECHNOLOGIES, INC.
By: /s/ Xxxxxxx XxXxxxxxx
------------------------------
Name: Xxxxxxx XxXxxxxxx
----------------------------
Title: Vice President
---------------------------
GUARANTY AGREEMENT
Signature Page
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By: /s/ Xxxxx Xxxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxxx
----------------------------
Title: Senior Vice President
---------------------------
GUARANTY AGREEMENT
Signature Page
SECOND AMENDED AND RESTATED
INTELLECTUAL PROPERTY SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED INTELLECTUAL PROPERTY SECURITY
AGREEMENT (this "Agreement") is made as of March 12, 1998 by and among LUMEN
TECHNOLOGIES, INC., a Delaware corporation (formerly known as BEC Group, Inc.)
(the "Borrower"), and CERTAIN SUBSIDIARIES OF THE BORROWER PARTY HERETO (each a
"Guarantor" and collectively with the Borrower, the "Grantors"), and
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association, as Agent
(the "Agent") for each of the lenders (the "Lenders" and collectively with the
Agent, the "Secured Parties") now or hereafter party to the Credit Agreement
(as defined below). All capitalized terms used but not otherwise defined herein
shall have the respective meanings assigned thereto in the Credit Agreement (as
defined below);
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and certain of the Lenders have
entered into that certain Amended and Restated Credit Agreement dated as of
July 10, 1997 (as amended, supplemented or otherwise modified as of the date
hereof, the "Existing Credit Agreement"); and
WHEREAS, the Borrower, the Lenders and the Agent have agreed to amend
and restate the Existing Credit Agreement in its entirety pursuant to the terms
of that certain Second Amended and Restated Credit Agreement dated as of the
date hereof among the Borrower, the Agent and the Lenders (as from time to time
amended, supplemented or restated, the "Credit Agreement"); and
WHEREAS, certain of the Grantors are parties to that certain Amended
and Restated Intellectual Property Security Agreement dated as of July 10, 1997
with the Agent (as amended, supplemented or otherwise modified as of the date
hereof, the "Existing IP Security Agreement"); and
WHEREAS, certain of the Guarantors are parties to that certain Second
Amended and Restated Guaranty Agreement (the "Guaranty") dated as of the date
hereof pursuant to which each Guarantor has continued its guaranty of the
obligations of the Borrower under the Credit Agreement; and
WHEREAS, the Grantors, the Agent, and the Lenders desire to amend and
restate the Existing IP Security Agreement in its entirety to reflect changes
in the parties thereto and certain changes in the Credit Agreement; and
WHEREAS, as collateral security for payment and performance of its
obligations under the Credit Agreement, the Borrower is willing to continue its
grant to the Agent for the benefit of the Secured Parties of a security
interest in certain of its intangible personal property and assets; and
WHEREAS, as collateral security for payment and performance of its
obligations under the Guaranty, each Guarantor is willing to continue its grant
to the Agent for the benefit of the Secured Parties of a security interest in
certain of its intangible personal property and assets;
NOW, THEREFORE, in order to induce the Secured Parties to enter into
the Loan Documents and in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby amend and restate the
Existing IP Security Agreement in its entirety as follows:
SECTION 1. GRANT OF SECURITY. Each Grantor hereby reaffirms, regrants
and continues its grant and collateral assignment, and does hereby grant and
collaterally assign, to the Agent for the benefit of the Secured Parties of a
security interest in all of the following (collectively, the "Collateral"):
(a) all of such Grantor's right, title and interest, whether
now owned or hereafter acquired, in and to all United States and
foreign patents and patent applications (including without limitation
the patents and patent applications identified on Schedule I attached
hereto and incorporated herein by reference) and including the right
to recover for all past, present and future infringements thereof and
all reissues, divisions, continuations, continuations-in-part,
substitutes, renewals, and extensions thereof, all improvements
thereon, and all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto (collectively, the
"Patents");
(b) all of such Grantor's right, title and interest, whether
now owned or hereafter acquired, in and to all United States and
foreign trademarks, trade names, trade dress, service marks, trademark
and service xxxx registrations, and applications for trademark or
service xxxx registration and any renewals thereof (including without
limitation each trademark, trade name, trade dress, registration and
application identified in Schedule II attached hereto and incorporated
herein by reference) and including all income, royalties, damages and
payments now and hereafter due and/or payable with respect thereto
(including without limitation damages for past or future infringements
thereof), the right to xxx or otherwise recover for all past, present
and future infringements thereof, all rights corresponding thereto
throughout the world (but only such rights as now exist or may come to
exist under applicable local law) and all other rights of any kind
whatsoever of each Grantor accruing thereunder or pertaining thereto,
together in each case with the goodwill of the business connected with
the use of, and symbolized by, each such trademark and service xxxx
(collectively, the "Trademarks");
(c) all of such Grantor's right, title and interest, whether
now owned or hereafter acquired, in and to all United States and
foreign copyrights and copyright applications (including without
limitation the copyrights and copyright applications identified on
Schedule III attached hereto and incorporated herein by reference) and
including the right to recover for all past, present and future
infringements thereof and all reissues, divisions, continuations,
continuations-in-part, substitutes, renewals, and extensions thereof,
all improvements thereon, and all other rights of any kind whatsoever
of such Grantor accruing thereunder or pertaining thereto
(collectively, the "Copyrights");
2
(d) All license agreements regarding Patents, Trademarks or
Copyrights with any other party (including any patent, trademark,
copyright and other items described in the definitions of Patents,
Trademarks or Copyrights that do not qualify as such only because no
Grantor has any right, title or interest therein other than rights
pursuant to such license agreements), whether such Grantor is a
licensor or licensee under any such license agreement and each of the
licenses listed on Schedule IV attached hereto and incorporated herein
by reference), and the right to prepare for sale, sell and advertise
for sale, all Inventory (as defined in the Security Agreement) now or
hereafter owned by such Grantor and now or hereafter covered by such
licenses (collectively, the "Licenses")); and
(e) all proceeds of any of the foregoing.
In addition, each Grantor has executed in blank and delivered to the
Agent an assignment of licenses and federally registered patents, trademarks
and copyrights (the "IP Assignment") owned by it, if any, in substantially the
form of Exhibit A hereto. Each Grantor hereby authorizes the Agent to complete
as Assignee and record with the United States Patent and Trademark Office (the
"PTO") and United States Copyright Office (the "Copyright Office") each IP
Assignment upon the occurrence of an Acceleration Event. For the purposes of
this Agreement, "Acceleration Event" means that (a) an Event of Default has
occurred and is continuing and (b) the Secured Obligations have become due and
payable (whether by acceleration, at final maturity or otherwise).
SECTION 2. SECURITY FOR OBLIGATIONS. The security interests and
collateral assignments granted under this Agreement (the "Security Interests")
by each Grantor secure the payment of all obligations of such Grantor under, in
respect of or in connection with this Agreement, the Credit Agreement, the
Guaranty and each other Loan Document to which such Grantor is or becomes a
party (all such obligations being the "Secured Obligations").
The Security Interests granted by this Agreement are granted in
conjunction with, and not in limitation of, the security interests granted to
the Agent, for the benefit of the Lenders, in other assets of each Grantor
pursuant to the other Loan Documents.
SECTION 3. COLLATERAL ASSIGNMENT. In addition to, and not in
limitation of, the grant of a security interest in the Patents, Trademarks,
Copyrights and Licenses in Section 1 above, each Grantor hereby regrants,
reassigns, retransfers and reconveys, and grants, assigns, transfers and
conveys, to the Agent, for the benefit of the Lenders, the Assignor's entire
right, title and interest in and to the Patents, Trademarks, Copyrights and
Licenses; provided, that such grant, assignment, transfer and conveyance shall
become effective only at the election of the Agent after the occurrence of an
Acceleration Event. The Grantor hereby agrees that after the occurrence of an
Acceleration Event the use by the Agent of any of the Patents, Trademarks,
Copyrights and Licenses shall be without any liability for royalties or other
related charges from the Agent to any Grantor.
3
SECTION 4. FURTHER ASSURANCES.
(a) Each Grantor agrees that from time to time, at the
expense of such Grantor, such Grantor will promptly execute and
deliver all further instruments and documents and take all further
action that may be necessary or desirable, or that the Agent may
reasonably request, in order to (i) continue, perfect and protect any
Security Interest granted or purported to be granted hereby, (ii)
perfect the Agent's (for the benefit of the Lenders) Security Interest
in and assign to the Agent, for the benefit of the Lenders, as
security for the repayment and satisfaction of the Secured
Obligations, all Collateral located in any foreign jurisdiction, and
(iii) enable the Agent, for the benefit of the Lenders, to exercise
and enforce its rights and remedies hereunder with respect to any part
of the Collateral. Without limiting the generality of the foregoing,
each Grantor will execute and file (with the appropriate governmental
offices, authorities, agencies and regulatory bodies in the United
States and any applicable foreign jurisdiction) such supplements to
this Agreement and such financing or continuation statements, or
amendments thereto, and such other instruments or notices, including
an executed IP Assignment, with the PTO and the Copyright Office, as
may be necessary or desirable, or as the Agent, on behalf of the
Lenders, may reasonably request, in order to perfect and preserve the
Security Interests granted or purported to be granted hereby.
(b) Each Grantor hereby authorizes the Agent, on behalf of
the Lenders, upon the occurrence and during the continuation of an
Event of Default, to file, where permitted by law, one or more
financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of such
Grantor. A carbon, photographic or other reproduction of this
Agreement or any financing statement covering the Collateral or any
part thereof shall be sufficient as a financing statement where
permitted by law.
(c) Each Grantor will furnish to the Agent, on behalf of the
Lenders, from time to time statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Agent, on behalf of the Lenders,
may reasonably request, all in reasonable detail.
(d) Each Grantor agrees that, should it have or obtain an
ownership interest in any United States or foreign patent or patent
application that is not now identified on Schedule I, any trademark or
trademark application that is not now identified on Schedule II or any
copyright or copyright application that is not now identified on
Schedule III or any license agreement in respect of any patent,
trademark or copyright that is not now identified on Schedule IV: (i)
the provisions of this Agreement shall automatically apply to such
item, and such item shall automatically become part of the Collateral;
and (ii) such Grantor shall, within three months after acquiring or
becoming aware of such ownership interest, (A) give written notice
thereof to the Agent and, (B) with respect to material Trademarks,
present such Trademarks for proper registration with the PTO, (C) with
respect to material Copyrights, present such Copyrights for proper
registration with the
4
Copyright Office and (D) with respect to patents and patent
applications and trademarks and trademark applications, prepare,
execute and file in the PTO or if appropriate in the equivalent
agencies in any foreign jurisdiction, within the requisite time
period, all documents that are known by such Grantor to be necessary
or that the Agent, on behalf of the Lenders, reasonably requests in
order to perfect the Security Interest of the Agent, on behalf of the
Lenders, therein. Each Grantor authorizes the Agent, on behalf of the
Lenders, to execute and file such a document in the name of such
Grantor if such Grantor fails to do so.
(e) Each Grantor agrees that should any of its domestic
Subsidiaries (other than a corporation which is a party hereto and
whether now or hereafter existing) obtain any ownership interest in
any United States or foreign patent or patent application, trademarks
or trademark application, trademarks, trade names, trade dress,
service marks, trademark and service xxxx registrations, and
applications for trademark or service xxxx registration and any
renewals thereof, such Grantor shall either cause such corporation (i)
to become a party to the Guaranty and a party hereto, or (ii) to
transfer and assign all such corporation's ownership interests therein
to such Grantor, whereupon the provisions of subsection (d) of this
Section 4 shall be applicable thereto.
(f) To the extent necessary or economically desirable in the
conduct of its business, each Grantor agrees: (i) to take all
necessary steps in any proceeding before the PTO or any similar office
or agency in any other country or any political subdivision thereof or
in any court, to maintain and pursue each patent application now or
hereafter included in the Collateral and to maintain each patent,
trademark or copyright now or hereafter included in the Collateral,
including the filing of divisional, continuation, continuation-in-part
and substitute applications, the filing of applications for reissue,
renewal or extensions, the payment of maintenance fees, and the
participation in interference, reexamination, opposition and
infringement proceedings; (ii) to take corresponding steps with
respect to material unpatented inventions on which such Grantor is now
or hereafter becomes entitled to seek protection; (iii) to bear any
expenses incurred in connection with such activities; and (iv) not to
abandon any right to file a material patent application, or abandon
any material pending application with respect to any of the
Collateral, without the written consent of the Agent, which consent
shall not be unreasonably withheld.
(g) No Grantor shall do any act or omit to do any act whereby
any of the Collateral may become dedicated or abandoned, except where
such dedication or abandonment (i) will not adversely affect the
aggregate economic value of the Collateral after giving effect to such
dedication or abandonment or materially adversely affect the business,
condition (financial or otherwise), operations, performance, or
properties of such Grantor individually or of such Grantor and its
Subsidiaries taken as a whole, and (ii) is in the ordinary course of
such Grantor's business. Each Grantor agrees to notify the Agent
promptly and in writing if it learns that any of the Collateral may
become abandoned or dedicated or of any adverse determination or any
development (including without
5
limitation the institution of any proceeding in the PTO, or in the
equivalent agencies in any foreign jurisdiction, or any court)
regarding any material part of the Collateral.
(h) In the event that any of the Collateral as to which it
has granted the Security Interests is infringed or misappropriated by
a third party, such Grantor shall promptly notify the Agent and shall,
unless such Grantor shall reasonably determine that such Collateral
would not reasonably be likely to, in the aggregate, be of material
economic value to such Grantor, take all reasonable steps to terminate
the infringement or misappropriation, and take such other actions as
such Grantor shall deem appropriate under the circumstances to protect
such Collateral. Any expense incurred in connection with such
activities shall be borne by such Grantor.
(i) Each Grantor agrees (i) to maintain the quality of any
and all products in connection with which the Collateral is used,
consistent with the quality standards established by such Grantor for
said products as of the date of determination, and (ii) to provide the
Agent, on behalf of the Lenders, at least quarterly, with a
certificate of an officer of such Grantor certifying such Grantor's
compliance with the foregoing subsections (a) through (i).
(j) Each Grantor agrees that it will promptly correct any
defect or error that may be discovered in (i) this Agreement, (ii) any
document executed pursuant hereto or (iii) the execution,
acknowledgment or recordation thereof.
(k) Each Grantor shall continue to xxxx its products
according to applicable law with the numbers of all appropriate
Patents.
SECTION 5. GENERAL REPRESENTATIONS AND WARRANTIES. Each Grantor
represents and warrants as follows:
(a) It has the unqualified right to enter into this Agreement
and to perform its terms.
(b) No authorization, consent, approval or other action by,
and no notice to or filing with, any governmental authority or
regulatory body or any other Person is required either (i) for the
grant by such Grantor of the Security Interests granted hereby or for
the execution, delivery or performance of this Agreement by such
Grantor, or (ii) for the perfection of or the exercise by the Agent,
on behalf of the Secured Parties, of its rights and remedies
hereunder, except for the filing of this Agreement with the PTO and
with the equivalent offices in any foreign jurisdiction with respect
to each Patent and Trademark, and the filings required by the Uniform
Commercial Code of the State in which such Grantor maintains its chief
executive office, and except to the extent that the exercise of rights
and remedies may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors rights
generally or by general principles of equity.
6
(c) Set forth on Schedule IV is a list, which is complete and
accurate in all material respects as of the date hereof, of the
Licenses of such Grantor necessary for the conduct of its business as
currently conducted or utilized and material in such Grantor's
operations or materially used in the selling or marketing of such
Grantor's products, including the expiration date of such Licenses.
(d) Each License of such Grantor identified on Schedule IV is
validly subsisting and has not been adjudged invalid or unenforceable,
in whole or in part, and is, to such Grantor's knowledge, valid and
enforceable.
(e) It has notified the Agent in writing of all uses of any
Patent, Trademark or Copyright, prior to such Grantor's use, of which
such Grantor is aware, which would in the reasonable judgment of such
Grantor lead to such item becoming invalid or unenforceable, including
prior unauthorized uses by third parties and uses that were not
supported by the goodwill of the business connected with such item.
(f) It has not granted any release, covenant not to xxx, or
non-assertion assurance to any third person, nor allowed any shop
right to arise with respect to any third person, with respect to any
part of the Collateral that would be reasonably likely, in the
aggregate, to be of material economic value.
(g) Its products have been marked as required by applicable
law with respect to the Collateral.
(h) The actions contemplated under or in connection with the
Loan Documents will not impair the legal right of such Grantor to use
any of the Collateral.
(i) Except as disclosed to the Lenders in writing prior to
the date of this Agreement, such Grantor has no knowledge of the
existence of any right under any patent, trademark, license agreement,
trade name, trade secret, know-how, confidential research, development
and commercial information, or other proprietary information held by
any other Person that would preclude such Grantor from publishing,
distributing, marketing, selling, or using any product currently made
by it, being made for it or sold or used by it, imported by it or
exported by it, as the case may be, or to use any processes currently
used by it (except, in each case, to the extent that such Grantor has
granted an exclusive license to another Person), or materially
interfere with the ability of such Grantor to carry on its business as
currently carried on, and such Grantor has no knowledge of any claim
to the contrary that is likely to be made.
(j) Such Grantor has used consistent standards of quality in
manufacturing, distribution and marketing of each product sold and
provision of each service provided under any Collateral, and has taken
all steps necessary to ensure that all licensed users of any
Collateral use such consistent standards of quality.
7
(k) No Subsidiaries and none of such Grantor's Subsidiaries
(except to the extent that such Subsidiaries are also Grantors
hereunder) has an ownership interest in any patents, patent
applications, copyrights, copyright applications, trademark, trade
name, trade dress, service marks, trademark or service xxxx
registrations or any applications for trademark or service xxxx
registration.
(l) No claim has been made (and, as to Collateral with
respect to which such Grantor is a licensor, to the knowledge of such
Grantor, no claim has been made against the third party licensee), and
such Grantor has no knowledge of any claim that is likely to be made,
that the use by such Grantor of any Collateral does or may violate the
rights of any Person.
SECTION 6. PATENT REPRESENTATIONS AND WARRANTIES. Each Grantor
represents and warrants as follows:
(a) It is the sole legal and beneficial owner of the Patents
set forth opposite its name on Schedule I hereto, free and clear of
any Lien, security interest, option, charge, pledge, assignment
(whether conditional or not), or any other encumbrance except for the
security interests created or permitted by this Agreement or the
Credit Agreement and certain Licenses and registered user agreements
described on Schedule IV and the Permitted Liens or Liens granted to
the Agent pursuant to the Existing IP Security Agreement (the
"Existing Bank Liens"), which Liens are continued and regranted
pursuant to this Agreement, and no effective financing statement or
other instrument similar in effect covering all or any part of such
Collateral, except in connection with Existing Bank Liens, is on file
in any recording office, except such as may have been filed in favor
of the Agent, for the benefit of the Lenders.
(b) Set forth on Schedule I is a list, which is complete and
accurate in all material respects as of the date hereof, of all of the
Patents owned by such Grantor necessary for the conduct of its
business as currently conducted or utilized and material in such
Grantor's operations or materially used in the selling or marketing of
such Grantor's products.
(c) Each Patent of such Grantor identified on Schedule I
hereto is subsisting and has not been adjudged unpatentable, invalid
or unenforceable, in whole or in part and is, to the knowledge of such
Grantor, patentable, valid and enforceable and each of such Patent
applications has been filed in conformity with applicable rules and
procedures of the PTO and of the equivalent agencies in each
applicable foreign jurisdiction and will be diligently prosecuted in
conformity therewith so as to not improperly become abandoned.
SECTION 7. TRADEMARK REPRESENTATIONS AND WARRANTIES. Each Grantor
represents and warrants as follows:
8
(a) It is the sole, legal and beneficial owner of the entire
right, title and interest in and to the Trademarks purported to be
granted by it hereunder, free and clear of any Lien, security
interest, option, charge, pledge, registered user agreement,
assignment (whether conditional or not), or covenant, or any other
encumbrance, except for the Security Interests created or permitted by
this Agreement or the Credit Agreement and certain Licenses and
registered user agreements described on Schedule IV or Permitted Liens
or Existing Bank Liens. No effective financing statement or other
instrument similar in effect covering all or any part of the
Trademarks purported to be granted by such Grantor hereunder, except
in connection with Existing Bank Liens, is on file in any recording
office, including, without limitation, the PTO and the equivalent
offices in any foreign jurisdiction, except such as may have been
filed in favor of the Agent, for the benefit of the Lenders.
(b) Set forth on Schedule II is a list, which is complete and
accurate in all material respects as of the date hereof, of all of the
Trademarks owned by such Grantor necessary for the conduct of its
business as currently conducted or utilized and material in such
Grantor's operations or materially used in the selling or marketing of
such Grantor's products.
(c) Each Trademark of such Grantor identified on Schedule II
is validly subsisting and has not been abandoned or adjudged invalid,
unregistrable or unenforceable, in whole or in part, and is, to such
Grantor's knowledge, valid, registrable and enforceable.
SECTION 8. COPYRIGHT REPRESENTATIONS AND WARRANTIES. Each Grantor
represents and warrants as follows:
(a) It is the sole, legal and beneficial owner of the entire
right, title and interest in and to the Copyrights purported to be
granted by it hereunder, free and clear of any Lien, security
interest, option, charge, pledge, registered user agreement,
assignment (whether conditional or not), or covenant, or any other
encumbrance, except for the Security Interests created or permitted by
this Agreement or the Credit Agreement and certain Licenses and
registered user agreements described on Schedule IV or Permitted Liens
or Existing Bank Liens. No effective financing statement or other
instrument similar in effect covering all or any part of the
Copyrights purported to be granted by such Grantor hereunder, except
in connection with Existing Bank Liens, is on file in any recording
office, including, without limitation, the PTO and the equivalent
offices in any foreign jurisdiction, except such as may have been
filed in favor of the Agent, for the benefit of the Lenders.
(b) Set forth on Schedule III is a list, which is complete
and accurate in all material respects as of the date hereof, of all of
the Copyrights owned by such Grantor necessary for the conduct of its
business as currently conducted or utilized and material in
9
such Grantor's operations or materially used in the selling or
marketing of such Grantor's products.
(c) Each Copyright of such Grantor identified on Schedule III
is validly subsisting and has not been abandoned or adjudged invalid,
unregistrable or unenforceable, in whole or in part, and is, to such
Grantor's knowledge, valid, registrable and enforceable.
SECTION 9. TRANSFERS AND OTHER LIENS. No Grantor shall:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of, or grant any option with respect to, the
Collateral, except as permitted by the Credit Agreement, except that
any Grantor may license the Collateral (i) in the ordinary course of
such Grantor's business, provided that such license is necessary or
desirable in the conduct of such Grantor's business, or (ii) in
connection with a sale of assets in compliance with the Credit
Agreement, provided that such license shall be on terms reasonably
expected to maximize the gain to such Grantor resulting from the
granting of such license. The Agent, for the benefit of the Lenders,
shall execute any documents that such Grantor may reasonably request
in order to permit the Grantor to exercise its right hereunder to
license the Trademarks, provided that the Agent shall not be required
to do anything that may, in the sole judgment of the Agent, adversely
affect the validity of the Security Interests or the assignment of the
Collateral located in any foreign jurisdiction;
(b) create or suffer to exist any Lien, security interest or
other charge or encumbrance upon or with respect to any of the
Collateral except for the Security Interests created by this Agreement
or other Permitted Liens; or
(c) take any other action in connection with any of the
Collateral that would impair the value of the interest or rights of
such Grantor in the Collateral taken as a whole or that would impair
the interest or rights of the Agent for the benefit of the Lenders.
SECTION 10. AGENT APPOINTED ATTORNEY-IN-FACT. Without limiting any
other provision of this Agreement, upon the occurrence and during the
continuance of an Acceleration Event (as hereinafter defined), each Grantor
hereby irrevocably appoints the Agent, for the benefit of the Lenders, as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor or otherwise, from time to time in the
Agent's discretion, to take any action and to execute any instrument that the
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation:
(a) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
10
(b) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (a)
above;
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of the Agent, for the benefit of the Lenders, with respect to any of
the Collateral; and
(d) to execute, in connection with the sale provided for in
Section 14, any endorsement, assignments, or other instruments of
conveyance or transfer with respect to the Collateral.
For purposes of this Agreement, "Acceleration Event" means that (a) an
Event of Default has occurred and is continuing and (b) the Secured Obligations
have become due and payable (whether by acceleration, at final maturity or
otherwise).
SECTION 11. AGENT MAY PERFORM.
(a) If any Grantor fails to perform any agreement contained
herein, the Agent may itself perform, or cause performance of, such
agreement, and the expenses of the Agent incurred in connection
therewith shall be payable by such Grantor under Section 15(b) to the
fullest extent permitted by applicable law.
(b) The Agent or its designated representatives shall have
the right to the extent reasonably requested and upon reasonable prior
notice, at any reasonable time during normal business hours of such
Grantors and from time to time, to inspect the Grantors' premises and
to examine the Grantors' books, records and operations relating to the
Collateral.
SECTION 12. THE AGENT'S DUTIES. The powers conferred on the Agent, for
the benefit of the Lenders, hereunder are solely to protect the interest of the
Secured Parties in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
neither the Agent nor any Lender shall have any duty as to any Collateral or as
to the taking of any necessary steps to preserve rights against other parties
or any other rights pertaining to any Collateral. Each Secured Party shall be
deemed to have exercised reasonable care in the custody and preservation of the
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which such party accords its own similar property.
SECTION 13. EVENTS OF DEFAULT. It is understood and agreed that, with
respect to any Grantor, the occurrence of any one or more of the following
shall constitute an "Event of Default" hereunder with respect to such Grantor
and shall entitle the Agent, for the benefit of the Lenders, to take such
actions as are elsewhere provided in this Agreement in respect of Events of
Default:
11
(a) an "Event of Default" or "Default" as defined in the
Credit Agreement shall have occurred and be continuing with respect to
the Borrower; or
(b) an "Event of Default" or "Default" as defined in the
Guaranty shall have occurred and be continuing with respect to such
Grantor; or
(c) such Grantor shall have failed to pay the Agent all of
the Guarantors' Obligations in accordance with, and as defined in, the
Guaranty on the Business Day on which the Agent has demanded such
payment in accordance with the terms of the Guaranty; or
(d) any material representation or warranty made by such
Grantor herein, in the Credit Agreement or Guaranty or in any other
Loan Document shall prove to have been false in any material respect
when made; or
(e) any covenant made by such Grantor herein, in the Credit
Agreement, in the Guaranty or in any other Loan Document is breached,
violated, or not complied with and not cured, in the case of this
Agreement (other than with respect to any breach or violation of or
non-compliance with Sections 4(g), 4(l) and 9 hereof) within 30 days
after notice thereof from the Agent and, in the case of the other Loan
Documents, within any grace period applicable thereto, or if no grace
period is applicable and default thereunder does not result
immediately from such noncompliance; then not cured within 30 days
after notice thereof from the Agent or the Lenders; provided, however,
any breach or violation of or non-compliance with Section 4(g), 4(l)
and 9 hereof shall immediately result in an Event of Default.
SECTION 14. REMEDIES UPON ACCELERATION EVENT. If an Acceleration Event
shall have occurred and be continuing:
(a) The Agent, for the benefit of the Lenders, may exercise
in respect of the Collateral of any defaulting Grantor, in addition to
other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default
under the Uniform Commercial Code (the "UCC") and also may (i)
exercise any and all rights and remedies of such Grantor under, in
connection with, or otherwise in respect of, such Collateral,
including the completion and filing of the IP Assignment, (ii) require
such Grantor to, and each Grantor hereby agrees that it will at its
expense and upon request of the Agent forthwith, assemble all or part
of the documents embodying such Collateral as directed by the Agent
and make it available to the Agent, for the benefit of the Lenders, at
a place to be designated by the Agent that is reasonably convenient to
both the Agent and such Grantor, (iii) occupy any premises owned or
leased by such Grantor where documents embodying such Collateral or
any part thereof are assembled for a reasonable period in order to
effectuate the Agent's rights and remedies hereunder or under
applicable law, without obligation to such Grantor in respect of such
occupation, (iv) license such Collateral or any part thereof, and (v)
without notice except as specified
12
below, sell such Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms
as the Agent may deem commercially reasonable. Each Grantor agrees
that at least ten days' notice to such Grantor of the time and place
of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of the Collateral regardless of notice of
sale having been given. The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.
(b) All payments received by any defaulting Grantor under or
in connection with any of such Collateral shall be received in trust
for the benefit of the Lenders, shall be segregated from other funds
of such Grantor and shall be immediately paid over to the Agent, for
the benefit of the Lenders, in the same form as so received (with any
necessary endorsement).
(c) All payments made under or in connection with or
otherwise in respect of the Collateral of any defaulting Grantor, and
all cash proceeds received by the Agent in respect of any sale of,
collection from, or other realization upon all or any part of such
Collateral may, in the discretion of the Agent, be held by the Agent,
for the benefit of the Lenders, as collateral for, and then or at any
time thereafter applied (after payment of any amounts payable to the
Agent pursuant to Section 15) for the ratable benefit of the Secured
Parties against all or any part of the Secured Obligations, in such
order as the Agent shall elect. Any surplus of such cash or cash
proceeds held by the Agent, for the benefit of the Lenders, and
remaining after payment in full of all the Secured Obligations shall
be paid over to the respective Grantors or to whosoever may be
lawfully entitled to receive such surplus. Any sale or other
disposition of the Collateral and the possession thereof by the Agent
shall be in compliance with all provisions of applicable law
(including applicable provisions of the UCC).
SECTION 15. INDEMNITY AND EXPENSES.
(a) Each Grantor agrees to indemnify the Agent, for the
benefit of the Lenders, from and against any and all claims, losses
and liabilities growing out of or resulting from this Agreement that
are incurred by the Agent (including without limitation enforcement of
this Agreement), except claims, losses or liabilities resulting from
the Agent's gross negligence or willful misconduct.
(b) Each Grantor will upon demand pay to the Agent, for the
benefit of the Lenders, the amount of any and all reasonable expenses,
including the reasonable fees and disbursements of its counsel and of
any experts and agents, that the Agent, for the benefit of the
Lenders, may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from or other
13
realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Secured Parties, or (iv) the
failure by any Grantor to perform or observe any of the provisions
hereof.
SECTION 16. SECURITY INTEREST ABSOLUTE. All rights of the Secured
Parties in the Security Interests granted hereunder, and each of the Secured
Obligations, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit
Agreement or any other Loan Document, or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to departure from, the
Credit Agreement or any other Loan Document, including, but not
limited to, (i) an increase or decrease in the amount of the Secured
Obligations and (ii) an amendment of any Loan Document to permit the
Agent or the Lenders or any one or more of them to extend further or
additional credit to the Borrower in any form which credit shall
thereupon be and become subject to the Credit Agreement and the other
Loan Documents as a Secured Obligation;
(c) any taking and holding of collateral or guarantees
(including without limitation any collateral pledged as security for
the Secured Obligations under the Security Instruments) for all or any
of the Secured Obligations; or any amendment, alteration, exchange,
substitution, transfer, enforcement, waiver, subordination,
termination or release of any collateral or such guarantees (including
without limitation any collateral pledged as security for the Secured
Obligations under the Security Instruments), or any non-perfection of
any collateral, or any consent to departure from any such guaranty
(including without limitation any collateral pledged as security for
the Secured Obligations under the Security Instruments);
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Secured Obligations, or the manner of
sale of any collateral;
(e) any consent by the Secured Parties to the change,
restructure or termination of the corporate structure or existence of
the Borrower or any Grantor and any corresponding restructure of the
Secured Obligations, or any other restructure or refinancing of the
Secured Obligations or any portion thereof;
(f) any modification, compromise, settlement or release by
the Secured Parties, by operation of law or otherwise, collection or
other liquidation of the Secured Obligations or the liability of the
Borrower, any Grantor or any guarantor of the Secured Obligations
(including without limitation any guarantor under the Guaranty, other
than the Grantor against which this Agreement is to be enforced), or
of any collateral for the Secured Obligation (including without
limitation any collateral pledged as security for the
14
Secured Obligations under the Security Instruments), in whole or
in part, and any refusal of payment by the Agent or any Lender in
whole or in part, from any obligor or guarantor (including without
limitation any guarantor under the Guaranty, other than the Grantor
against which this Agreement is sought to be enforced) in connection
with any of the Secured Obligations, whether or not with notice to, or
further assent by, or any reservation of rights against, any Grantor;
or
(g) any other circumstance (including without limitation any
statute of limitations) that might otherwise constitute a defense
available to, or a discharge of, the Borrower, any guarantor of the
Borrower's liabilities (including without limitation any Guarantor) or
a Grantor.
The granting of a Security Interest in the Collateral shall continue
to be effective or be reinstated, as the case may be, if at any time any
payment of any of the Secured Obligations is rescinded or must otherwise be
returned by any Secured Party, upon the insolvency, bankruptcy or
reorganization of the Borrower or any Grantor or otherwise, all as though such
payment had not been made.
SECTION 17. WAIVER. Each Grantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Secured
Obligations and this Agreement and any requirement that the Secured Parties
protect, secure, perfect or insure any Security Interest or any Collateral
subject thereto or exhaust any right or take any action against any Grantor or
any other Person (including without limitation any guarantor under the
Guaranty) or any collateral securing payment of the Secured Obligations
(including without limitation any collateral pledged as security for the
Secured Obligations under the Security Instruments).
SECTION 18. SUBROGATION. Prior to termination of this Agreement in
accordance with the provisions of Section 21(c), no Grantor will exercise any
rights that it may acquire by way of subrogation under this Agreement. If an
amount shall be paid to such Grantor on account of such subrogation rights at
any time prior to termination of this Agreement in accordance with the
provisions of Section 21(c), such amount shall be held in trust for the benefit
of the Lenders and shall forthwith be paid to the Agent, for the benefit of the
Lenders, to be credited and applied upon the Secured Obligations, whether
matured or unmatured, in accordance with the terms of the Credit Agreement and
the Guaranty.
SECTION 19. AMENDMENTS, ETC.
(a) Except as provided in subsection (b) of this Section 18,
no amendment or waiver of any provision of this Agreement nor consent
to any departure by any Grantor therefrom shall in any event be
effective unless the same shall be in writing and signed by the Agent,
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
15
(b) Upon the execution and delivery by any Person of a
supplement to this Agreement pursuant to which such Person agrees to
become a party hereto (each an "Intellectual Property Security
Agreement Supplement"), (i) such Person or entity shall be referred to
as an "Additional Grantor" and shall be and become a Grantor and each
reference in this Agreement to "Grantor" shall also mean and be a
reference to such Additional Grantor, and (ii) the schedules attached
to each Intellectual Property Security Agreement Supplement shall be
incorporated into and become a part of and supplement Schedules I, II,
III and IV hereto, and the Agent may attach such supplements to such
Schedules, and each reference to such Schedules shall mean and be a
reference to such Schedules as supplemented pursuant hereto.
(c) Any person that executes an Intellectual Property
Security Agreement Supplement shall also execute and deliver such
financing statements and all further instruments and documents and
take all further action that may be necessary or desirable or that the
Agent may reasonably request in order to perfect and protect any
Security Interest purported to be granted thereby.
SECTION 20. ADDRESSES FOR NOTICES. Any notice shall be conclusively
deemed to have been received by any party hereto and be effective on the day on
which delivered to such party (against receipt therefor) at the address set
forth below or such other address as such party shall specify to the other
parties in writing, (or, in the case of notice by telefacsimile (where receipt
of such notice is verified by return), when received at such telefacsimile
number as may from time to time be specified in written notice to the other
parties hereto or otherwise received) or, if sent prepaid by certified or
registered mail return receipt requested on the third Business Day after the
day on which mailed, or, if sent prepaid by a national overnight courier
service, on the first Business Day after the day on which delivered to such
service against receipt therefor, addressed to such party at said address:
(a) if to any Grantor: c/o Lumen Technologies, Inc.
000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, Xxx Xxxx 00000
Attention: Mr. Ian X.X. Xxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to: Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
16
(b) if to the Agent: NationsBank, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxx, Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to: NationsBank, N.A.
Corporate Banking
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxx Xxxxxxxxx, Senior Vice President
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
SECTION 21. CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER THE CREDIT
AGREEMENT; RELEASE OF COLLATERAL.
(a) This Agreement shall reaffirm a continuing Security
Interest in the Collateral and shall (i) remain in full force and
effect until terminated in accordance with the provisions of Section
21(c), (ii) be binding upon each Grantor, its successors and assigns,
provided, however, no Grantor shall make any assignment hereof without
the prior consent of the Agent, and (iii) inure, together with the
rights and remedies of the Secured Parties hereunder, to the benefit
of the Secured Parties and their respective successors, transferees
and assigns. Without limiting the generality of the foregoing clause
(iii), any Lender may assign to one or more Persons, or grant to one
or more Persons participations in or to, all or any part of its rights
and obligations under the Credit Agreement (to the extent permitted by
the Credit Agreement); and to the extent of any such assignment or
participation such other Person shall, to the fullest extent permitted
by law, thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise, subject however,
to the provisions of the Credit Agreement, including Article XIII
thereof concerning the Agent and Article IV thereof concerning
assignments and participations.
(b) Except as permitted by the Credit Agreement, no Grantor
shall sell, lease, transfer or otherwise dispose of any item of
Collateral during the term of this Agreement without the prior written
consent of the Agent to such sale, lease, transfer or other
disposition.
(c) On the Facility Termination Date, the Collateral shall be
automatically released from the Liens created hereby, all rights to
the Collateral shall automatically revert to the Grantors, and this
Agreement and all obligations of the Grantors hereunder
17
shall terminate without delivery of any instrument or performance of
any act by any party. Upon such termination of this Agreement, the
Agent shall reassign and redeliver such Collateral then held by or for
the Agent and the Lenders and execute and deliver to each Grantor such
documents as it shall reasonably request to evidence such termination.
SECTION 22. SWAP AGREEMENTS. All Hedging Obligations of any Grantor
shall be deemed to be Secured Obligations secured hereby, and each Lender or
affiliate of a Lender party to any Swap Agreement shall be deemed to be a
Secured Party hereunder.
SECTION 23. SEVERABILITY. If any term or provision of this Agreement
is or shall become illegal, invalid or unenforceable in any jurisdiction, all
other terms and provisions of this Agreement shall remain legal, valid and
enforceable in such jurisdiction and such illegal, invalid or unenforceable
provision shall be legal, valid and enforceable in any other jurisdiction.
SECTION 24. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
SECTION 25. GOVERNING LAW.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
(B) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE XXXXXX
XX XXX XXXX, XXXXX XX XXX XXXX, XXXXXX XXXXXX OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES ANY
OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE
OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION
OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(C) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE ON
SUCH PARTY BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT
OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY
REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH
PARTY PROVIDED
18
BY SECTION 20, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER
THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.
(D) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL
PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS IN THE COURTS OF ANY PLACE WHERE ANY PARTY OR ANY PARTY'S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY
THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR HEREAFTER,
BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE, MAY BE
AVAILABLE TO IT.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH PARTY
HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY AND HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR PROCEEDING HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
[SIGNATURE PAGES FOLLOW.]
19
IN WITNESS WHEREOF, the parties have duly executed this Second Amended
and Restated Intellectual Property Security Agreement on the day and year first
written above.
GRANTORS:
LUMEN TECHNOLOGIES, INC.
By: /s/ Xxxxxxx XxXxxxxxx
-----------------------------------
Name: Xxxxxxx XxXxxxxxx
---------------------------------
Title: Vice President of Finance
--------------------------------
ORC TECHNOLOGIES, INC. (FORMERLY KNOWN
AS OPTICAL RADIATION CORPORATION)
By: /s/ Xxxxxxx XxXxxxxxx
-----------------------------------
Name: Xxxxxxx XxXxxxxxx
---------------------------------
Title: Vice President
--------------------------------
BILC ACQUISITION CORP., which is
the surviving corporation in a
merger with ILC TECHNOLOGY, INC.
effective on the date hereof and
simultaneously therewith changed
its name to ILC Technology, Inc.
By: /s/ Xxxxxxx XxXxxxxxx
-----------------------------------
Name: Xxxxxxx XxXxxxxxx
---------------------------------
Title: Vice President
--------------------------------
INTELLECTUAL PROPERTY SECURITY AGREEMENT
Signature Page 1 of 2
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION, as
Agent for the Lenders
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxx
---------------------------------
Title: Senior Vice President
--------------------------------
INTELLECTUAL PROPERTY SECURITY AGREEMENT
Signature Page 2 of 2
EXHIBIT A
SECOND AMENDED AND RESTATED
ASSIGNMENT OF PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
THIS SECOND AMENDED AND RESTATED ASSIGNMENT OF PATENTS, TRADEMARKS,
COPYRIGHTS AND LICENSES (this "Agreement") is made as of March 12, 1998 by and
among LUMEN TECHNOLOGIES, INC., a Delaware corporation (formerly known as BEC
Group, Inc.) (the "Borrower"), and EACH OF THE UNDERSIGNED (each a "Guarantor"
and collectively with the Borrower, the "Grantors"), to NATIONSBANK, NATIONAL
ASSOCIATION, a national banking association, as Agent (the "Agent") for each of
the lenders (the "Lenders" and collectively with the Agent, the "Secured
Parties") now or hereafter party to the Credit Agreement (as defined below).
All capitalized terms used but not otherwise defined herein shall have the
respective meanings assigned thereto in the Credit Agreement (as defined
below);
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and certain of the Lenders have
entered into that certain Amended and Restated Credit Agreement dated as of
July 10, 1997 (as amended, supplemented or otherwise modified as of the date
hereof, the "Existing Credit Agreement"); and
WHEREAS, the Borrower, the Lenders and the Agent have agreed to amend
and restate the Existing Credit Agreement in its entirety pursuant to the terms
of that certain Second Amended and Restated Credit Agreement dated as of the
date hereof among the Borrower, the Agent, and the Lenders (as from time to
time amended, supplemented or restated, the "Credit Agreement"); and
WHEREAS, each Grantor has entered into that certain Second Amended and
Restated Intellectual Property Security Agreement (the "IP Security Agreement")
dated as of even date herewith pursuant to which each Grantor continues to
grant to the Agent for the benefit of the Lenders a security interest in the
Marks, Copyrights, Licenses and Patents defined below in order to secure its
obligations under the Guaranty Agreement; and
WHEREAS, the Grantors, together with certain other grantors which then
were subsidiaries of the Borrower, are parties to that certain Amended and
Restated Assignment of Patents, Trademarks, Copyrights and Licenses dated as of
July 10, 1997 (as amended, supplemented or otherwise modified as of the date
hereof, the "Existing IP Assignment"); and
WHEREAS, the Grantors, the Agent, and the Lenders desire to amend and
restate the Existing IP Assignment in its entirety to reflect changes in those
Persons party thereto and the changes in the Credit Agreement; and
WHEREAS, as collateral security for payment and performance of its
obligations under the Credit Agreement, the Borrower is willing to grant to the
Agent for the benefit of the Secured Parties a security interest in certain of
its intangible personal property and assets; and
WHEREAS, each Guarantor is a party to that certain Second Amended and
Restated Guaranty Agreement (the "Guaranty") dated as of the date hereof
pursuant to which each Guarantor has guaranteed the obligations of the Borrower
under the Credit Agreement; and
WHEREAS, each Guarantor is a Material Subsidiary of the Borrower and
will materially benefit from the loans and advances made and to be made, and
the letters of credit issued and to be issued, under the Credit Agreement; and
WHEREAS, as collateral security for payment and performance of its
obligations under the Guaranty Agreement, each Guarantor is willing to grant to
the Agent for the benefit of the Secured Parties a security interest in certain
of its intangible personal property and assets; and
WHEREAS, each Grantor (a) has adopted and used and is using or has a
bona fide intention to use the trademarks and service marks (the "Marks")
identified on Annex I hereto, and is the owner of the registrations of and
pending registration applications for such Marks in the United States Patent
and Trademark Office identified on Annex I hereto, (b) is the owner of and uses
the copyrights, copyright registrations and pending registration applications
set forth on Annex II hereto (the "Copyrights"), (c) is a party to and has
rights under the licenses and license agreements listed on Annex III hereto
(the "Licenses") and (d) is the owner of and uses the patents, patent
registrations and pending registration applications set forth on Annex IV
hereto (the "Patents" and together with the Marks, the Copyrights and the
Licenses, the "Collateral"); and
WHEREAS, the Agent for the benefit of the Lenders desires to acquire
the Marks, the Copyrights, the Licenses and the Patents and the registrations
thereof and registration applications therefor, as applicable, in connection
with the exercise of its remedies after the occurrence of an Event of Default
and acceleration of the Obligations under the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, each Grantor does hereby assign, sell and transfer unto
the Agent all right, title and interest in and to the Marks, Copyrights,
Licenses and Patents, together with (i) the registrations of and registration
applications therefor, as applicable, (ii) the goodwill of the business
symbolized by and associated with the Collateral and the registrations thereof,
(iii) the right to xxx and recover for, and the right to profits or damages due
or accrued arising out of or in connection with, any and all past, present or
future infringements or dilution of or damage or injury to the Collateral or
the registrations thereof or such associated goodwill, and (iv) all rights of
each Grantor to enforce all Licenses. Each Grantor hereby grants to the Agent,
for the benefit of the Lenders, and notice is hereby given that each Grantor
has regranted to the Agent, for the benefit of the Lenders, a first priority
security interest in the Collateral to secure the payment and performance in
full of all of
the obligations of each Grantor under the Credit Agreement, the Guaranty and
each other Loan Document to which such Grantor is or becomes a party.
This Assignment is intended to and shall take effect as a sealed
instrument only after the occurrence of an Acceleration Event as defined in the
IP Security Agreement whereafter the Agent shall complete this instrument by
signing its acceptance of this Assignment below.
[Signature pages follows.]
IN WITNESS WHEREOF, each Grantor, by its duly authorized officer, has
executed this assignment, as an instrument under seal, on the day and year
first written above.
LUMEN TECHNOLOGIES, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
ORC TECHNOLOGIES, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
BILC ACQUISITION CORP., which is
the surviving corporation in a
merger with ILC TECHNOLOGY, INC.
effective on the date hereof and
simultaneously therewith changed
its name to ILC Technology, Inc.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
ASSIGNMENT OF TRADEMARKS, COPYRIGHTS AND LICENSES
Signature Page 1 of 2
The foregoing assignment of the Trademarks, Copyrights and Licenses
and the registrations thereof and registration applications therefor by the
Assignee and the Agent is hereby accepted as of the day and year first written
above.
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
ASSIGNMENT OF TRADEMARKS, COPYRIGHTS AND LICENSES
Signature Page 2 of 2
SECOND AMENDED AND RESTATED
STOCK PLEDGE AGREEMENT
THIS SECOND AMENDED AND RESTATED STOCK PLEDGE AGREEMENT (this
"Agreement") is made and entered into as of March 12, 1998 by and between LUMEN
TECHNOLOGIES, INC., a Delaware corporation formerly known as BEC Group, Inc.
(the "Borrower"), AND EACH OF THE UNDERSIGNED SUBSIDIARIES OF THE BORROWER
(each a "Guarantor", and collectively with the Borrower, the "Pledgors") and
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association, as Agent
(the "Agent") for each of the lenders (the "Lenders" and collectively with the
Agent, the "Secured Parties") now or hereafter party to the Credit Agreement
(as defined below). All capitalized terms used but not otherwise defined herein
shall have the respective meanings assigned thereto in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and the Lenders have entered into
that certain Amended and Restated Credit Agreement dated as of July 10, 1997
(as amended, supplemented or otherwise modified as of the date hereof, the
"Existing Credit Agreement"); and
WHEREAS, the Borrower, the Lenders and the Agent have agreed to amend
and restate the Existing Credit Agreement in its entirety pursuant to the terms
of that certain Second Amended and Restated Credit Agreement dated as of the
date hereof among the Borrower, the Agent and the Lenders (as from time to time
amended, supplemented or restated, the "Credit Agreement"); and
WHEREAS, certain of the Pledgors are parties to that certain Amended
and Restated Stock Pledge Agreement dated as of July 10, 1997 with the Agent
(as amended, supplemented or otherwise modified as of the date hereof, the
"Existing Pledge Agreement"); and
WHEREAS, the Pledgors, the Agent, and the Lenders desire to amend and
restate the Existing Pledge Agreement in its entirety to reflect changes in the
parties and the shares of capital stock subject thereto and certain changes in
the Credit Agreement; and
WHEREAS, each Pledgor desires to pledge or continue its pledge, as
applicable, to the Secured Parties to secure the payment and performance of the
Borrower's Obligations under the Credit Agreement and the Guarantors'
obligations under the Guaranty Agreement, as applicable, of all of its interest
in all of the issued and outstanding shares of common stock owned by such
Pledgor of each of its domestic subsidiaries as identified on Schedule I hereto
(collectively the "Pledged Stock"); and
WHEREAS, each Pledgor will materially benefit from the loans and
advances made and to be made, and the letters of credit issued and to be
issued, under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. PLEDGE OF STOCK; OTHER COLLATERAL.
(a) As collateral security for the payment and performance of all
debts, obligations or liabilities now or hereafter existing, absolute or
contingent, of the Guarantors under the Guaranty Agreement and of all of the
Borrower's Obligations under the Credit Agreement (collectively, the "Secured
Obligations"), and subject to Section 10 hereof, (i) each Pledgor party to the
Existing Pledge Agreement hereby reaffirms, regrants and continues the pledge,
collateral assignment and grant of security interest pursuant to the Existing
Pledge Agreement in the Pledged Stock heretofore pledged under the Existing
Pledge Agreement, and (ii) each Pledgor hereby pledges and collaterally assigns
to the Agent for the benefit of the Lenders, and grants to the Agent for the
benefit of the Lenders pursuant to the New York Uniform Commercial Code (the
"UCC") a first priority security interest in the Pledged Stock which was not
heretofore pledged under the Existing Pledge Agreement and all of the
following:
(A) all cash, securities, dividends, rights, and
other property at any time and from time to time declared or
distributed in respect of or in exchange for any or all of the Pledged
Stock, other than dividends permitted to be retained by such Pledgor
under the Credit Agreement; and
(B) all other property hereafter delivered to the
Agent in substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such property
and all cash, securities, interest, dividends, rights, and other
property at any time and from time to time declared or distributed in
respect of or in exchange for any or all of the Pledged Stock.
All such Pledged Stock, certificates, instruments, cash, securities, interest,
dividends, rights and other property referred to in this Section 1, other than
dividends issued in respect of such Pledged Stock that are permitted to be
retained by such Pledgor under the Credit Agreement, are herein collectively
referred to as the "Collateral." All of the Pledged Stock is currently owned by
the respective Pledgors and represented by the stock certificates listed on
Schedule I hereto, which stock certificates, with stock powers duly executed in
blank by Pledgor, are being or have been delivered to the Agent.
(b) The Pledgor agrees to deliver all the Collateral to the Agent at
such location as the Agent shall from time to time designate by written notice
pursuant to Section 19 hereof for its custody at all times until termination of
this Agreement, together with such instruments of assignment and transfer as
requested by the Agent.
(c) All advances, charges, costs and expenses, including reasonable
attorneys' fees, incurred or paid by the Agent or any Lender in exercising any
right, power or remedy conferred by this Agreement, or in the enforcement
thereof, shall become a part of the Secured Obligations secured hereunder and
shall be paid to the Agent for the benefit of the Lenders by each Pledgor
immediately upon demand therefor, with interest thereon until paid in full at
the Base Rate.
2. STATUS OF PLEDGED STOCK. Each Pledgor hereby represents and
warrants to the Agent for the benefit of the Lenders that (a) all of the shares
of the Pledged Stock are validly issued and
2
outstanding, fully paid and nonassessable and constitute all the issued and
outstanding shares of Voting Stock of each of the Domestic Subsidiaries and
Domestic Control Subsidiaries (except with respect to Wolfram Electric,
Inc.("Wolfram") and Voltarc Technologies, Inc. ("Voltarc")), 65% are of all of
the issued and outstanding Voting Stock of the Direct Foreign Subsidiaries and
all of the shares of Capital Stock of each of Wolfram and Voltarc owned by the
Borrowers as set forth on Schedule I hereto (b) each Pledgor is the registered
and record and beneficial owner of its Pledged Stock, free and clear of all
Liens, charges, equities, encumbrances and restrictions on pledge or transfer
(other than the pledge hereunder and under the Loan Documents and applicable
restrictions pursuant to federal and state securities laws, and in the case of
the capital stock of Voltarc, the restrictions set forth in the Preferred Stock
Rights Schedule attached to the Certificate of Incorporation of Voltarc, as
amended (the "Preferred Stock Restrictions"), and in the Stock Purchase and
Option Agreement (the "Option Agreement"), dated October 1, 1997, among the
Borrower, ORC, Voltarc and the stockholders party thereto and the Proxy and
Voting Rights Agreement dated October 1, 1997 from ORC in favor of FINOVA
Capital Corporation (the "Proxy Agreement" and together with the Preferred
Stock Restrictions and the Option Agreement, collectively referred to as the
"Voltarc Restrictive Documents")), (c) it has full corporate power, legal right
and lawful authority to execute this Agreement and to pledge, assign and
transfer its Pledged Stock in the manner and form hereof, and (d) the pledge,
assignment and delivery of its Pledged Stock to the Agent for the benefit of
the Lenders pursuant to this Agreement creates or continues, as applicable, a
valid and perfected first priority security interest in such Pledged Stock,
securing the payment of the Secured Obligations, assuming continuous and
uninterrupted possession thereof by the Agent. Except as otherwise expressly
provided herein or in the Credit Agreement, none of the Pledged Stock (nor any
interest therein or thereto) shall be sold, transferred or assigned without the
Agent's prior written consent, which may be withheld for any reason, subject to
the provisions of the Voltarc Restrictive Documents. Each Pledgor covenants
with the Agent for the benefit of the Lenders that it shall at all times cause
its Pledged Stock to be represented by the certificates now and hereafter
delivered to the Agent in accordance with Section 1 hereof and that it shall
cause each of its Subsidiaries not to issue any capital stock, or securities
convertible into capital stock, at any time during the term of this Agreement
other than to the Borrower or another Guarantor who shall immediately pledge
such additional capital stock to the Agent on substantially identical terms as
are contained herein. Each Pledgor hereby agrees not to enter into any
agreement requiring that the voting rights associated with the Pledged Stock be
exercised in any particular manner nor grant any interest in or permit to exist
any Lien, charge, encumbrance or restriction with respect to the Pledged Stock
(other than applicable restrictions pursuant to federal and state securities
laws, and in the case of the capital stock of Voltarc, the Voltarc Restrictive
Documents.
3. PRESERVATION AND PROTECTION OF COLLATERAL.
(a) The Agent shall be under no duty or liability with respect to the
collection, protection or preservation of the Collateral, or otherwise, beyond
the use of reasonable care in the custody and preservation thereof while in its
possession.
(b) Each Pledgor agrees to pay when due all taxes, charges, Liens and
assessments against the Collateral, unless being contested in good faith by
appropriate proceedings diligently conducted and against which adequate
reserves have been established in accordance with GAAP applied on a
3
Consistent Basis. Upon the failure of any Pledgor to so pay or contest such
taxes, charges, Liens or assessments, the Agent at its option may pay or
contest any of them (the Agent having the sole right to determine the legality
or validity and the amount necessary to discharge such taxes, charges, Liens or
assessments).
4. DEFAULT. Should a Pledgor fail to pay the Agent all Secured
Obligations as of the end of the Business Day on which such Secured Obligations
become due and payable and after the expiration of all grace or cure periods,
if any, and all extensions or waivers, if any, and should such failure
continue, or should any other Event of Default set forth in the Credit
Agreement occur and be continuing, or should such Pledgor fail otherwise to
comply with the terms hereof (any of the foregoing an "Event of Default"),
subject to the terms of the Voltarc Restrictive Documents, the Agent is given
full power and authority, then or at any time thereafter, to sell, assign and
deliver or collect the whole or any part of the Collateral, or any substitute
therefor or any addition thereto, in one or more sales, with or without any
previous demands or demand of performance or, to the extent permitted by law,
notice or advertisement, in such order as the Agent may elect; and any such
sale may be made either at public or private sale at the Agent's place of
business or elsewhere, either for cash or upon credit or for future delivery,
at such price as the Agent may reasonably deem fair; and the Agent may be the
purchaser of any or all Collateral so sold and hold the same thereafter in its
own right free from any claim of a Pledgor or right of redemption. Demands of
performance, advertisements and presence of property and sale and notice of
sale are hereby waived to the extent permissible by law; provided, however,
that the Agent shall give to Borrower and each other Pledgor five days' notice
prior to any sale permitted under this Agreement, and Borrower and each other
Pledgor agrees that such notice shall constitute commercially reasonable
notice. Any sale hereunder may be conducted by an auctioneer or any officer or
agent of the Agent. Pledgor recognizes that the Agent may be unable to effect a
public sale of the Collateral by reason of certain prohibitions contained in
the Securities Act of 1933, as amended (the "Securities Act"), and applicable
state law, and may be otherwise delayed or adversely affected in effecting any
sale by reason of present or future restrictions thereon imposed by
governmental authorities, and that as a consequence of such prohibitions and
restrictions the Agent may be compelled (i) to resort to one or more private
sales to a restricted group of purchasers who will be obliged to agree, among
other things, to acquire the stock for their own account, for investment and
not with a view to the distribution or resale thereof, or (ii) to seek
regulatory approval of any proposed sale or sales, or (iii) to limit the amount
of Collateral sold to any Person or group. Each Pledgor agrees and acknowledges
that private sales so made may be at prices and upon terms less favorable to
Pledgor than if such Collateral was sold either at public sales or at private
sales not subject to other regulatory restrictions, and that the Agent has no
obligation to delay the sale of any of the Collateral for the period of time
necessary to permit the issuer of such Collateral to register or otherwise
qualify them, even if such issuer would agree to register or otherwise qualify
such Collateral for public sale under the Securities Act or applicable state
law. Each Pledgor further agrees, to the extent permitted by applicable law,
that the use of private sales made under the foregoing circumstances to dispose
of the Collateral shall be deemed to be dispositions in a commercially
reasonable manner. Each Pledgor hereby acknowledges that a ready market may not
exist for the Pledged Stock if they are not traded on a national securities
exchange or quoted on an automated quotation system and agrees and acknowledges
that in such event the Pledged Stock may be sold for an amount less than a pro
rata share of the fair market value of the issuer's assets minus its
liabilities. In addition to the foregoing, the Secured Parties may exercise
such other rights and
4
remedies as may be available under the Loan Documents, at law (including
without limitation the UCC) or in equity.
5. PROCEEDS OF SALE. The proceeds of the sale of any of the Collateral
and all sums received or collected from or on account of such Collateral shall
be applied to the payment of expenses incurred or paid by the Agent in
connection with any sale, transfer or delivery of the Collateral, to the
payment of any other costs, charges, reasonable attorneys' fees or expenses
mentioned herein, and to the payment of the Secured Obligations or any part
thereof, all in such order and manner as the Agent may determine and as
permitted by applicable law and regulation. The Agent shall, upon satisfaction
in full of all such Secured Obligations, pay any balance to Pledgors.
6. PRESENTMENTS, ETC. The Agent shall not be under any duty or
obligation whatsoever to make or give any presentments, demands for
performances, notices of nonper formance, protests, notice of protest or notice
of dishonor in connection with any obligations or evidences of indebtedness
held thereby as collateral, or in connection with any obligations or evidences
of indebtedness which constitute in whole or in part the Secured Obligations
secured hereunder.
7. ATTORNEY-IN-FACT. Each Pledgor hereby appoints the Agent as such
Pledgor's attorney-in-fact for the purposes of carrying out the provisions of
this Agreement and taking any action and executing any instrument which the
Agent may deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest; provided, that the
Agent shall have and may exercise rights under this power of attorney only upon
the occurrence and during the continuance of a Default or an Event of Default.
Without limiting the generality of the foregoing, upon the occurrence and
during the continuance of a Default or an Event of Default, the Agent shall
have the right and power to receive, endorse and collect all checks and other
orders for the payment of money made payable to such Pledgor representing any
dividend, interest payment, principal payment or other distribution payable or
distributable in respect to the Collateral or any part thereof and to give full
discharge for the same.
8. ABSOLUTE RIGHTS AND OBLIGATIONS. All rights of the Secured Parties,
and all obligations of the Pledgors hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit
Agreement, the Guaranty, any other Loan Document or any other
agreement or instrument relating to any of the Secured Obligations;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, the Guaranty, any other Loan Document or any other
agreement or instrument relating to any of the Secured Obligations;
(c) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from the Guaranty, any guaranty, for all or any of the
Secured Obligations; or
5
(d) any other circumstances which might otherwise constitute
a defense available to, or a discharge of, any Pledgor in respect of
the Secured Obligations or of this Agreement.
9. WAIVER BY A PLEDGOR. Each Pledgor waives (to the extent permitted
by applicable law) any right to require any Secured Party or any other obligee
of the Secured Obligations to (a) proceed against the Borrower, any Guarantor
or any other Person or entity, (b) proceed against or exhaust any Collateral as
defined in the Credit Agreement, or (c) pursue any other remedy in its power;
and waives (to the extent permitted by applicable law) any defense arising by
reason of any disability or other defense of the Borrower, any Guarantor or any
other Person, or by reason of the cessation from any cause whatsoever of the
liability of the Borrower, any Guarantor or any other Person or entity. Until
the Facility Termination Date, no Pledgor shall have the right of subrogation,
and each Pledgor waives any right to enforce any remedy which any Secured Party
or any other obligee of the Secured Obligations now has or may hereafter have
against any other Person and waives (to the extent permitted by applicable law)
any benefit of and any right to participate in any collateral or security
whatsoever now or hereafter held by the Agent for the benefit of the Lenders.
Each Pledgor authorizes any Secured Party and any other obligee of the Secured
Obligations without notice (except notice required by applicable law) or demand
and without affecting its liability hereunder or under the Loan Documents from
time to time to: (i) take and hold security, other than the Collateral herein
described, for the payment of such Secured Obligations or any part thereof, and
exchange, enforce, waive and release the Collateral herein described or any
part thereof or any such other security; and (ii) apply such Collateral or
other security and direct the order or manner of sale thereof as such Secured
Party or obligee in its discretion may determine.
The Agent may at any time deliver (without representation, recourse or
warranty) the Collateral or any part thereof to a Pledgor and the receipt
thereof by such Pledgor shall be a complete and full acquittance for the
Collateral so delivered, and the Secured Parties shall thereafter be discharged
from any liability or responsibility therefor.
10. DIVIDENDS AND VOTING RIGHTS.
(a) All dividends and other distributions with respect to any of the
Pledged Stock shall be subject to the pledge hereunder except for dividends
permitted to be retained by such Pledgor under the Credit Agreement. So long as
no Default or Event of Default shall have occurred and be continuing, any such
dividends may be retained by such Pledgor free from any Liens hereunder.
Following the occurrence and during the continuance of any Default or Event of
Default, all dividends shall be promptly delivered to the Agent (together, if
the Agent shall request, with stock powers or instruments of assignment duly
executed in blank affixed to any capital stock or other negotiable document or
instrument so distributed) to be held, released or disposed of by it hereunder
or, at the option of the Agent, to be applied to the Secured Obligations hereby
secured as they become due.
(b) So long as no Default or Event of Default shall have occurred and
be continuing, the registration of the Collateral in the name of a Pledgor
shall not be changed and such Pledgor shall be entitled to exercise all voting
and other rights and powers pertaining to the Collateral for all purposes not
inconsistent with the terms hereof.
6
(c) Upon the occurrence and during the continuance of any Default or
Event of Default, at the option of the Agent, all rights of a Pledgor to
receive and retain dividends upon the Collateral shall cease and shall
thereupon be vested in the Agent for the benefit of the Lenders.
(d) Upon the occurrence and during the continuance of any Default or
Event of Default, at the option of the Agent, all rights of a Pledgor to
exercise the voting or consensual rights and powers which it is authorized to
exercise pursuant to subsection (b) above shall cease and the Agent may
thereupon (but shall not be obligated to), at its request, cause such
Collateral to be registered in the name of the Agent or its nominee or agent
for the benefit of the Lenders and exercise such voting or consensual rights
and powers as appertain to ownership of such Collateral, and to that end each
Pledgor hereby appoints the Agent as its proxy, with full power of
substitution, to vote and exercise all other rights as a shareholder with
respect to such Pledged Stock hereunder upon the occurrence and during the
continuance of any Default or Event of Default, which proxy is coupled with an
interest and is irrevocable prior to termination of this Agreement, and each
Pledgor hereby agrees to provide such further proxies as the Agent may request;
provided, however, that the Agent in its discretion may from time to time
refrain from exercising, and shall not be obligated to exercise, any such
voting or consensual rights or such proxy.
11. POWER OF SALE. Until the Facility Termination Date, the power of
sale and other rights, powers and remedies granted to the Agent for the benefit
of the Lenders hereunder shall continue to exist and may be exercised by the
Agent at any time and from time to time, upon the occurrence and during the
continuance of an Event of Default, irrespective of the fact that any Secured
Obligations or any part thereof may have become barred by any statute of
limitations or that the liability of a Pledgor may have ceased.
12. OTHER RIGHTS. The rights, powers and remedies given to the Agent
for the benefit of the Lenders by this Agreement shall be in addition to all
rights, powers and remedies given to any Secured Party by virtue of any statute
or rule of law. Any forbearance or failure or delay by the Agent in exercising
any right, power or remedy hereunder shall not be deemed to be a waiver of such
right, power or remedy, and any single or partial exercise of any right, power
or remedy hereunder shall not preclude the further exercise thereof; and every
right, power and remedy of the Secured Parties shall continue in full force and
effect until such right, power or remedy is specifically waived by the Required
Lenders by an instrument in writing.
13. FURTHER ASSURANCES. Each Pledgor agrees at its own expense to do
such further acts and things, and to execute and deliver such additional
conveyances, assignments, financing statements, agreements and instruments, as
the Agent may at any time reasonably request in connection with the
administration or enforcement of this Agreement or related to the Collateral or
any part thereof or in order better to assure and confirm unto the Agent its
rights, powers and remedies for the benefit of the Lenders hereunder. Each
Pledgor hereby consents and agrees that the issuers of or obligors in respect
of the Collateral shall be entitled to accept the provisions hereof as
conclusive evidence of the right of the Agent, on behalf of the Lenders, to
exercise its rights hereunder with respect to the Collateral, notwithstanding
any other notice or direction to the contrary heretofore or hereafter given by
such Pledgor or any other Person to any of such issuers or obligors.
7
14. BINDING AGREEMENT; ASSIGNMENT. This Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto, and to their respective successors and assigns, except
that no Pledgor shall be permitted to assign this Agreement or any interest
herein or in the Collateral, or any part thereof, or otherwise pledge, encumber
or grant any option with respect to the Collateral, or any part thereof, or any
cash or property held by the Agent as Collateral under this Agreement. All
references herein to the Agent shall include any successor thereof, each Lender
and any other obligees from time to time of the Obligations.
15. SWAP AGREEMENTS. All Hedging Obligations of any Pledgor shall be
deemed to be Secured Obligations secured hereby, and each Lender or affiliate
of a Lender party to any Swap Agreement shall be deemed to be a Secured Party
hereunder.
16. SEVERABILITY. In case any Lien, security interest or other right
of any Secured Party or any provision hereof shall be held to be invalid,
illegal or unenforceable, such invalidity, illegality or unenforceability shall
not affect any other Lien, security interest or other right granted hereby or
provision hereof.
17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
18. TERMINATION. This Agreement and all obligations of the Pledgors
hereunder shall terminate without delivery of any instrument or performance of
any act by any party on the Facility Termination Date. Upon such termination of
this Agreement, the Agent shall, at the sole expense of the Pledgors, deliver
to each Pledgor the certificates evidencing their respective shares of Pledged
Stock (and any other property received as a dividend or distribution or
otherwise in respect of such Pledged Stock), together with any cash then
constituting the Collateral, not then sold or otherwise disposed of in
accordance with the provisions hereof and take such further actions as may be
necessary to effect the same.
19. INDEMNIFICATION. Each Pledgor hereby covenants and agrees to pay,
indemnify, and hold the Agent and each Lender harmless from and against any and
all other out-of-pocket liabilities, costs, expenses or disbursements of any
kind or nature whatsoever arising in connection with any claim or litigation by
any Person resulting from the execution, delivery, enforcement, performance and
administration of this Agreement or the Loan Documents, or the transactions
contemplated hereby or thereby, or in any respect relating to the Collateral or
any transaction pursuant to which such Pledgor has incurred any Secured
Obligation (all the foregoing, collectively, the "Indemnified Liabilities");
provided, however, that the Pledgor shall have no obligation hereunder with
respect to Indemnified Liabilities arising from the willful misconduct or gross
negligence of the Agent or any Lender. The agreements in this subsection shall
survive repayment of all Secured Obligations, termination or expiration of this
Agreement and occurrence of the Facility Termination Date.
20. NOTICES. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telefacsimile (where the receipt
of such message is
8
verified by return) expressly provided for hereunder, when received at such
telephone or telefacsimile number as may from time to time be specified in
written notice to the other parties hereto or otherwise received), or if sent
prepaid by certified or registered mail return receipt requested on the third
Business Day after the day on which mailed, or if sent prepaid by a national
overnight courier service, on the first Business Day after the day on which
delivered to such service against receipt therefor, addressed to such party at
said address:
(a) if to any Pledgor: c/o Lumen Technologies, Inc.
000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, Xxx Xxxx 00000
Attention: Mr. Ian X.X. Xxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to: Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(b) if to the Agent: NationsBank, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxx, Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to: NationsBank, N.A.
Corporate Banking
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxx Xxxxxxxxx,
Senior Vice President
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
21. GOVERNING LAW; WAIVERS.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
9
(B) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE XXXXXX
XX XXX XXXX, XXXXX XX XXX XXXX, XXXXXX XXXXXX OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES ANY
OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE
OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION
OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(C) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH PARTY PROVIDED
IN SECTION 15.1 OF THE CREDIT AGREEMENT OR BY ANY OTHER METHOD OF
SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE
OF NEW YORK.
(D) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL
PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS IN THE COURTS OF ANY PLACE WHERE ANY OTHER PARTY OR ANY OF
SUCH PARTY'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT
PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH PARTY
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR HEREAFTER,
BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE, MAY BE
AVAILABLE TO IT.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH PARTY
HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY AND EACH PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH
10
ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[SIGNATURE PAGE FOLLOWS.]
11
IN WITNESS WHEREOF, the parties have duly executed this Second Amended
and Restated Pledge Agreement on the day and year first written above.
PLEDGORS:
LUMEN TECHNOLOGIES, INC.
By: /s/ Xxxxxxx XxXxxxxxx
--------------------------
Name: Xxxxxxx XxXxxxxxx
------------------------
Title: Vice President of
Finance
-----------------------
ORC TECHNOLOGIES, INC.
By: /s/ Xxxxxxx XxXxxxxxx
--------------------------
Name: Xxxxxxx XxXxxxxxx
------------------------
Title: Vice President
-----------------------
BILC ACQUISITION CORP., which is
the surviving corporation in a
merger with ILC TECHNOLOGY, INC.
effective on the date hereof and
simultaneously therewith changed
its name to ILC Technology, Inc.
By: /s/ Xxxxxxx XxXxxxxxx
--------------------------
Name: Xxxxxxx XxXxxxxxx
------------------------
Title: Vice President
-----------------------
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By: /s/ Xxxxx Xxxxxxxxx
--------------------------
Name: Xxxxx Xxxxxxxxx
------------------------
Title: Senior Vice President
-----------------------
SECOND AMENDED AND RESTATED STOCK PLEDGE AGREEMENT
Signature Page 1 OF 1
SECOND AMENDED AND RESTATED SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement")
is made and entered into as of March 12, 1998 by LUMEN TECHNOLOGIES, INC., a
Delaware corporation formerly known as BEC Group, Inc. (the "Borrower), and
EACH OF THE UNDERSIGNED SUBSIDIARIES OF THE BORROWER (each a "Guarantor", and
collectively with the Borrower, the "Grantors"), and NATIONSBANK, NATIONAL
ASSOCIATION, a national banking association, as Agent (the "Agent") for each of
the lenders (the "Lenders" and collectively with the Agent, the "Secured
Parties") now or hereafter party to the Credit Agreement (as defined below).
All capitalized terms used but not otherwise defined herein shall have the
respective meanings assigned thereto in the Credit Agreement (as defined
below);
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent of the Lenders have entered into that
certain Amended and Restated Credit Agreement dated as of July 10, 1997 (as
amended, supplemented or otherwise modified as of the date hereof, the
"Existing Credit Agreement"); and
WHEREAS, the Borrower, the Lenders and the Agent have agreed to amend
and restate the Existing Agreement in its entirety pursuant to the terms of
that certain Second Amended and Restated Credit Agreement dated as of the date
hereof among the Borrower, the Agent and the Lenders (as from time to time
amended, supplemented or restated, the "Credit Agreement"); and
WHEREAS, the Grantors are parties to that certain Amended and Restated
Security Agreement dated as of July 10, 1997 with the Agent (as amended,
supplemented or otherwise modified as of the date hereof, the "Existing
Security Agreement"); and
WHEREAS, certain of the Guarantors are parties to that certain Second
Amended and Restated Guaranty Agreement (the "Guaranty") dated as of the date
hereof pursuant to which each Guarantor guaranteed, or continued its guaranty
of, the obligations of the Borrower under the Credit Agreement;
WHEREAS, the Grantors, the Agent, and the Lenders desire to amend and
restate the Existing Security Agreement in its entirety to reflect changes in
the parties thereto and certain changes in the Credit Agreement; and
WHEREAS, as collateral security for payment and performance of its
obligations under the Credit Agreement, the Borrower is willing to continue its
grant to the Agent for the benefit of the Secured Parties of a security
interest in certain of its personal property and assets; and
WHEREAS, as collateral security for payment and performance of its
obligations under the Guaranty, each Guarantor is willing to grant, or to
continue its grant, to the Agent for the benefit of the Secured Parties of a
security interest in certain of its personal property and assets;
NOW, THEREFORE, in order to induce the Secured Parties to enter into
the Loan Documents and in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby amend and restate the
Existing Security Agreement in its entirety as follows:
1. GRANT OF SECURITY INTEREST. As collateral security for the payment
and satisfaction of all obligations and liabilities of the Guarantors under the
Guaranty Agreement and all of the Borrower's Obligations under the Credit
Agreement (collectively, the "Secured Obligations"), each Grantor hereby
affirms, grants, pledges and assigns, or reaffirms, regrants and continues its
pledge and collateral assignment, as the case may be, to the Agent for the
benefit of the Lenders and continues and grants to the Agent for the benefit of
the Lenders a continuing first priority security interest in and to all of the
following property of such Grantor, whether now owned or existing or hereafter
acquired or arising and wheresoever located:
(a) All accounts, accounts receivable, contracts, notes,
bills, acceptances, choses in action, chattel paper, instruments, documents and
other forms of obligations at any time owing to each Grantor arising out of
goods sold or leased or for services rendered by such Grantor, the proceeds
thereof and all of such Grantor's rights with respect to any goods represented
thereby, whether or not delivered, goods returned by customers and all rights
as an unpaid vendor or lienor, including rights of stoppage in transit and of
recovering possession by proceedings including replevin and reclamation,
together with all customer lists, books and records, ledger and account cards,
computer tapes, software, disks, printouts and records, whether now in
existence or hereafter created, relating thereto (collectively referred to
hereinafter as "Accounts");
(b) All inventory of each Grantor, including without
limitation, all goods manufactured or acquired for sale or lease, and any piece
goods, raw materials, work in process and finished merchandise, findings or
component materials, and all supplies, goods, incidentals, office supplies,
packaging materials and any and all items used or consumed in the operation of
the business of such Grantor or which may contribute to the finished product or
to the sale, promotion and shipment thereof, in which such Grantor now or at
any time hereafter may have an interest, whether or not the same is in transit
or in the constructive, actual or exclusive occupancy or possession of such
Grantor or is held by such Grantor or by others for such Grantor's account
(collectively referred to hereinafter as "Inventory");
(c) All goods of each Grantor, including without limitation,
all machinery, equipment, parts, supplies, apparatus, appliances, tools,
patterns, molds, dies, blueprints, fittings, furniture, furnishings, fixtures
and articles of tangible personal property of every description now or
hereafter owned by a Grantor or in which such Grantor may have or may hereafter
acquire any interest, at any location (collectively referred to hereinafter as
"Equipment");
(d) All general intangibles of each Grantor in which a
Grantor now has or hereafter acquires any rights, including but not limited to,
causes of action, corporate or business records, inventions, designs, patents,
patent applications, trademarks, trademark registrations and applications
2
therefor, goodwill, trade names, trade secrets, trade processes, copyrights,
copyright registrations and applications therefor, licenses, permits,
franchises, customer lists, computer programs, all claims under guaranties, tax
refund claims, rights and claims against carriers and shippers, leases, claims
under insurance policies, all rights to indemnification and all other
intangible personal property and intellectual property of every kind and nature
(collectively referred to hereinafter as "General Intangibles");
(e) All rights now or hereafter accruing to each Grantor
under contracts, leases, agreements or other instruments to perform services,
to hold and use land and facilities, and to enforce all rights thereunder
(collectively referred to hereinafter as "Contract Rights");
(f) All books and records relating to any of the Collateral
(as hereinafter defined) (including without limitation, customer data, credit
files, computer programs, printouts, and other computer materials and records
of each Grantor pertaining to any of the foregoing); and
(g) All accessions to, substitutions for and all
replacements, products and proceeds of the foregoing, including without
limitation proceeds of insurance policies insuring the Collateral (as
hereinafter defined).
All of the property and interests in property described in subsections
(a) through (g) and all other property and interests in personal property which
shall, from time to time, secure the Secured Obligations are herein
collectively referred to as the "Collateral."
2. FINANCING STATEMENTS. At the time of execution of this Agreement,
each Grantor shall have furnished the Agent with properly executed financing
statements, amendments and assignments (including amendments of financing
statements filed pursuant to the Existing Security Agreement) as prescribed by
the Uniform Commercial Code as presently in effect in the states where the
Collateral is located, prepared and approved by the Agent in form and number
sufficient for filing wherever required with respect to the Collateral, in
order that the Agent, for the benefit of the Lenders, shall have a duly
perfected security interest of record in the Collateral, to the extent a
security interest in such Collateral can be perfected by filing a financing
statement, following the filing of such financing statements with the
appropriate local and state governmental authorities, subject only to Permitted
Liens. Each Grantor shall execute as reasonably required by the Agent any
additional financing statements or other documents to effect the same, together
with any necessary continuation statements so long as this Agreement remains in
effect.
3. MAINTENANCE OF SECURITY INTEREST. Each Grantor will, from time to
time, upon the request of the Agent, deliver specific assignments of
Collateral, together with such other instruments and documents, financing
statements, amendments thereto, assignments or other writings as the Agent may
reasonably request to carry out the terms of this Agreement or to protect or
enforce the Agent's security interest in the Collateral.
With respect to any and all Collateral to be secured and conveyed
under this Agreement, each Grantor agrees to do and cause to be done all things
necessary to perfect and keep in full force the security interest granted in
favor of the Agent for the benefit of the Lenders, including, but not limited
3
to, the prompt payment of all fees and expenses incurred in connection with any
filings made to perfect or continue a security interest in the Collateral in
favor of the Agent for the benefit of the Lenders.
Each Grantor agrees to make appropriate entries upon its financial
statements and books and records disclosing the Agent's (for the benefit of the
Lenders) security interest granted hereunder.
4. RECEIPT OF PAYMENT. In the event an Event of Default shall occur
and be continuing and a Grantor (or any of its affiliates, subsidiaries,
stockholders, directors, officers, employees or agents) shall receive any
proceeds of Collateral, including without limitation monies, checks, notes,
drafts or any other items of payment, each Grantor shall hold all such items of
payment in trust for the Agent, for the benefit of the Lenders, and as the
property of the Agent, for the benefit of the Lenders, separate from the funds
of such Grantor, and no later than the first Business Day following the receipt
thereof, such Grantor shall cause the same to be forwarded to the Agent for its
custody and possession on behalf of the Lenders as additional Collateral.
5. COLLECTIONS; AGENT'S RIGHT TO NOTIFY ACCOUNT DEBTORS AND TO ENDORSE
A GRANTOR'S NAME. Each Grantor hereby authorizes the Agent, on behalf of the
Lenders, at all times after the occurrence and during the continuation of an
Event of Default (a) to open such Grantor's mail and collect any and all
amounts due to such Grantor from Persons obligated on any Accounts ("Account
Debtors"); (b) to take over such Grantor's post office boxes or make other
arrangements as the Agent, on behalf of the Lenders, deems necessary to receive
such Grantor's mail, including notifying the post office authorities to change
the address for delivery of such Grantor's mail to such address as the Agent,
on behalf of the Lenders, may designate; and (c) to notify any or all Account
Debtors that the Accounts have been assigned to the Agent for the benefit of
the Lenders and that Agent has a security interest therein for the benefit of
the Lenders (provided that the Agent may at any time give such notice to an
Account Debtor that is a department, agency or authority of the United States
government). Each Grantor at all times after the occurrence and during the
continuation of an Acceleration Event (as hereinafter defined) irrevocably
makes, constitutes and appoints the Agent, for the benefit of the Lenders, (and
all Persons designated by the Agent for that purpose) as such Grantor's true
and lawful attorney (and agent-in-fact) to endorse such Grantor's name on any
checks, notes, drafts or any other payment relating to or constituting proceeds
of the Collateral which comes into the Agent's possession or Agent's control,
and deposit the same to the account of the Agent, for the benefit of the
Lenders, on account and for payment of the Secured Obligations. The Agent shall
promptly furnish each Grantor with a copy of any such notice sent with respect
to Accounts of such Grantor pursuant to clause (c) of this Section 5 and each
Grantor hereby agrees that any such notice, in the Agent's sole discretion, may
be sent on such Grantor's stationery, in which event such Grantor shall co-sign
such notice with the Agent. For purposes of this Agreement, "Acceleration
Event" means that (a) an Event of Default has occurred and is continuing and
(b) the Secured Obligations have become due and payable (whether by
acceleration, at final maturity or otherwise).
4
6. COVENANTS. Each Grantor covenants with the Agent that from and
after the date of this Agreement until termination hereof in accordance with
Section 27 hereof:
(a) INSPECTION. The Agent (by any of its officers, employees
and agents), on behalf of the Lenders, shall have the right upon its
reasonable request and reasonable prior notice, and at any reasonable
times during such Grantor's usual business hours, to inspect the
Collateral, all records related thereto (and to make extracts or
copies from such records), and the premises upon which any of the
Collateral is located, to discuss such Grantor's affairs and finances
with any Person (other than Account Debtors) and to verify with any
Person other than Account Debtors the amount, quality, quantity, value
and condition of, or any other matter relating to, the Collateral and,
if an Event of Default has occurred and is continuing, to discuss such
Grantor's affairs and finances with such Grantor's Account Debtors and
to verify the amount, quality, value and condition of, or any other
matter relating to, the Collateral and such Account Debtors. Upon or
after the occurrence and during the continuation of an Acceleration
Event, the Agent may at any time and from time to time employ and
maintain on such Grantor's premises a custodian selected by the Agent
who shall have full authority to do all acts necessary to protect the
Agent's (for the benefit of the Lenders) interest. All expenses
incurred by the Agent, on behalf of the Lenders, by reason of the
employment of such custodian shall be paid by such Grantor, added to
the Secured Obligations and secured by the Collateral.
(b) ASSIGNMENTS, RECORDS AND SCHEDULES OF ACCOUNTS. Each
Grantor shall keep accurate and complete records of its Accounts
("Account Records") and from time to time at intervals designated by
the Agent such Grantor shall provide the Agent with a schedule of
Accounts in form and substance acceptable to the Agent describing all
Accounts created or acquired by such Grantor ("Schedule of Accounts");
provided, however, that such Grantor's failure to execute and deliver
any such Schedule of Accounts shall not affect or limit the Agent's
security interest or other rights in and to any Accounts for the
benefit of the Lenders. If requested by the Agent, each Grantor shall
furnish the Agent with copies of proof of delivery and other documents
relating to the Accounts so scheduled, including without limitation
repayment histories and present status reports (collectively, "Account
Documents") and such other matter and information relating to the
status of then existing Accounts as the Agent shall request. No
Grantor shall remove any Account Records or Account Documents or
change its chief executive offices from the locations set forth in
Exhibit A hereto without 30 days prior written notice to the Agent as
provided in Section 20 hereof and delivery to the Agent by the
applicable Grantor prior to such removal of executed financing
statements, amendments and other documents necessary to maintain the
security interests granted hereunder.
(c) NOTICE REGARDING DISPUTED ACCOUNTS. In the event any
amounts due and owing in excess of $250,000 are in dispute between any
Account Debtor and a Grantor (which shall include without limitation
any dispute in which an offset claim or counterclaim may result), such
Grantor shall provide the Agent with written notice thereof as soon as
practicable, explaining in detail the reason for the dispute, all
claims related thereto and the amount in controversy.
5
(d) VERIFICATION OF ACCOUNTS. If an Event of Default has
occurred and is continuing, any of the Agent's officers, employees or
agents shall have the right, at any reasonable time or times
hereafter, to verify with Account Debtors the validity, amount or any
other matter relating to any Accounts and, whether or not a Default or
Event of Default has occurred, any of the Agent's officers, employees
or agents shall have the right to verify the same with any Grantor.
(e) CHANGE OF TRADE STYLES. No Grantor shall change, amend,
alter, terminate, or cease using its material trade names or styles
under which it sells Inventory as of the date of this Agreement
("Trade Styles"), or use additional Trade Styles, without giving the
Agent at least 30 days' prior written notice and delivery to the Agent
by the applicable Grantor prior to such removal, change, amendment,
alteration, or use, of executed financing statements, amendments and
other documents necessary to maintain the security interests granted
hereunder.
(f) SAFEKEEPING OF INVENTORY. Each Grantor shall be
responsible for the safekeeping of its Inventory, and, subject to
Section 16 hereof, in no event shall the Agent have any responsibility
for:
(i) Any loss or damage to Inventory or
destruction thereof occurring or arising in any manner or
fashion from any cause;
(ii) Any diminution in the value of Inventory; or
(iii) Any act or default of any carrier,
warehouseman, bailee or forwarding agency thereof or other
Person in any way dealing with or handling Inventory.
(g) LOCATION, RECORDS AND SCHEDULES OF INVENTORY. Each
Grantor shall keep correct and accurate records itemizing and
describing the kind, type, location and quantity of Inventory, its
cost therefor and the selling price of Inventory held for sale, and
the daily withdrawals therefrom and additions thereto, and shall
furnish to the Agent from time to time at reasonable intervals
designated by the Agent, a current schedule of Inventory ("Schedule of
Inventory") based upon its most recent physical inventory and its
daily inventory records. Each Grantor shall conduct a physical
inventory, no less than annually, and shall furnish to the Agent such
other documents and reports thereof as the Agent shall reasonably
request with respect to the Inventory. Subject to compliance at all
times with Sections 9(c), (d) and (e), no Grantor shall, other than in
the ordinary course of business in connection with its sale, remove
any material amount of Inventory from the locations set forth on
Exhibit B hereto to a location not also set forth on Exhibit B hereto,
each of such locations being owned by a Grantor unless otherwise
indicated, without 30 days prior written notice to the Agent as
provided in Section 20 hereof and delivery to the Agent by the
applicable Grantor prior to such removal of executed financing
statements, amendments and other documents necessary to maintain the
security interests granted hereunder.
6
(h) RETURNS OF INVENTORY. If any Account Debtor returns any
Inventory to a Grantor after shipment thereof, and such return
generates a credit in excess of $250,000 in the aggregate on any
Account or Accounts of such Account Debtor, such Grantor shall notify
the Agent of the same as soon as practicable.
(i) EVIDENCE OF OWNERSHIP OF EQUIPMENT. The Grantors, as soon
as practicable following a request therefor by the Agent, shall
deliver to the Agent any and all evidence of ownership of any of the
Equipment (including without limitation certificates of title and
applications for title).
(j) LOCATION, RECORDS AND SCHEDULES OF EQUIPMENT. The
Grantors shall maintain accurate, itemized records itemizing and
describing the kind, type, quality, quantity and value of its
Equipment and shall furnish the Agent upon request with a current
schedule containing the foregoing information, but, other than during
the continuance of an Event of Default, not more often than once per
fiscal quarter. No Grantor shall remove any material portion of the
Equipment from the locations set forth in Exhibit C hereto to a
location not also set forth on Exhibit C hereto without at least 30
days' prior written notice to the Agent as provided in Section 20
hereof and delivery to the Agent by the applicable Grantor prior to
such removal of executed financing statements, amendments and other
documents necessary to maintain the security interests granted
hereunder.
(k) SALE OR MORTGAGE OF EQUIPMENT. Other than in the ordinary
course of business with respect to disposition of obsolescent
Equipment or replacement of Equipment with other Equipment performing
similar functions and having similar or better utility and value, and
except as permitted by the Credit Agreement prior to the occurrence
and continuance of an Event of Default, no Grantor shall sell,
exchange, lease, mortgage, encumber, pledge or otherwise dispose of or
transfer any of the Equipment or any part thereof without the prior
written consent of the Agent.
(l) MAINTENANCE OF EQUIPMENT. Each Grantor shall keep and
maintain its Equipment in good operating condition and repair,
ordinary wear and tear excepted. No Grantor shall permit any such
items to become a fixture to real property (unless such Grantor has
granted the Agent for the benefit of the Lenders a lien on such real
property) or accessions to other personal property.
7. WARRANTIES AND REPRESENTATIONS REGARDING COLLATERAL GENERALLY. Each
Grantor warrants and represents that it is and, except as permitted by the
Credit Agreement, will continue to be the owner of the Collateral hereunder,
now owned and upon the acquisition of the same, free and clear of all Liens,
claims, encumbrances and security interests other than the security interest in
favor of the Agent for the benefit of the Lenders hereunder and Permitted
Liens, and that it will defend such Collateral and any products and proceeds
thereof against all claims and demands of all Persons (other than holders of
Permitted Liens) at any time claiming the same or any interest therein adverse
to the Secured Parties.
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8. ACCOUNT WARRANTIES AND REPRESENTATIONS. With respect to its
Accounts, each Grantor warrants and represents to the Agent for the benefit of
the Lenders that the Agent and each Lender may rely on all statements or
representations made by such Grantor on or with respect to any Schedule of
Accounts prepared and delivered by it and that:
(a) All Account Records and Account Documents are located
only at such Grantor's locations as set forth on Exhibit A attached
hereto and incorporated herein by reference;
(b) The Accounts are genuine, are in all respects what they
purport to be, are not evidenced by an instrument or document or, if
evidenced by an instrument or document, are only evidenced by one
original instrument or document;
(c) The Accounts cover bona fide sales and deliveries of
Inventory usually dealt in by such Grantor, or the rendition by such
Grantor of services, to an Account Debtor in the ordinary course of
business or as permitted by the Credit Agreement;
(d) The amounts of the face value shown on any Schedule of
Accounts or invoice statement delivered to the Agent with respect to
any Account, are actually owing to such Grantor and are not contingent
for any reason; and there are no setoffs, discounts, allowances,
claims, counterclaims or disputes of any kind or description in an
amount greater than $250,000 in the aggregate, or greater than $50,000
individually, existing or asserted with respect thereto and such
Grantor has not made any agreement with any Account Debtor thereunder
for any deduction therefrom, except as may be stated in the Schedule
of Accounts and reflected in the calculation of the face value of each
respective invoice related thereto;
(e) Except for conditions generally applicable to such
Grantor's industry and markets, there are no facts, events, or
occurrences known to such Grantor pertaining particularly to any
Accounts which are reasonably expected to materially impair in any way
the validity, collectibility or enforcement of Accounts that would
reasonably be likely, in the aggregate, to be of material economic
value, or in the aggregate materially reduce the amount payable
thereunder from the amount of the invoice face value shown on any
Schedule of Accounts, and on all contracts, invoices and statements
delivered to the Agent, with respect thereto;
(f) The goods or services giving rise thereto are not, and
were not at the time of the sale or performance thereof, subject to
any Lien, claim, encumbrance or security interest, except those of the
Agent for the benefit of the Lenders and those removed or terminated
prior to the date hereof and Permitted Liens;
(g) The Accounts have not been pledged to any Person other
than to the Agent for the benefit of the Lenders under this Agreement
and will be owned by such Grantor free and clear of any Liens, claims,
encumbrances or security interests except Permitted Liens;
8
(h) The Agent's and the Lenders' security interest therein
will not be subject to any offset, deduction, counterclaim, Lien or
other adverse condition, other than Permitted Liens; and
(i) The location of its chief executive office and any state
in which it (i) has a place of business in only one county of such
state or (ii) resides in such state (within the meaning of the
applicable Uniform Commercial Code) but does not have any place of
business in such state, is set forth on Exhibit A attached hereto and
incorporated herein by reference and each Grantor shall deliver to the
Agent not less than 30 days written notice prior to any change of such
location or status of places of business or residency.
9. INVENTORY WARRANTIES AND REPRESENTATIONS. With respect to its
Inventory, each Grantor warrants and represents to the Agent for the benefit of
the Lenders that the Secured Parties may rely on all statements or
representations made by such Grantor on or with respect to any Inventory and
that:
(a) All Inventory, other than Inventory consisting of samples
utilized by salespeople or otherwise having a reasonable value of less
than $15,000 in the aggregate for any location, is located only at
such Grantor's locations as set forth on Exhibit B attached hereto and
incorporated herein by reference;
(b) None of its Inventory is or will be subject to any Lien,
claim, encumbrance or security interest whatsoever, except for the
security interest of the Agent for the benefit of the Lenders
hereunder and Permitted Liens;
(c) No Inventory of such Grantor that would reasonably be
likely, in the aggregate with the Inventory of all Grantors, to be of
value in excess of $100,000 is, and shall not at any time or times
hereafter be, stored with a bailee, warehouseman, or similar party
without the Agent's prior written consent and, if the Agent gives such
consent, such Grantor will concurrently therewith cause any such
bailee, warehouseman, or similar party to issue and deliver to the
Agent upon its request therefor, in form and substance reasonably
acceptable to the Agent, warehouse receipts therefor in the Agent's
name and take such other action and be party to such document as
deemed necessary or prudent by the Agent to maintain the security
interest of the Lenders in such Inventory;
(d) No Inventory is, and shall not at any time or times
hereafter be, under consignment to any Person, the value of which,
when aggregated with all other Inventory under consignment of such
Grantor and all other Material Subsidiaries, would exceed $100,000;
provided however, that ORC Technology, Inc. may have Inventory under
consignment; up to $5,000 with any one person, up to a maximum, when
aggregated with all other Inventory under consignment of $60,000; and
(e) No Inventory is at or shall be kept at any location that
is leased by such Grantor from any other Person, the value of which,
when aggregated with all other Inventory kept at any location which is
leased by all Grantors, would exceed $100,000, unless such
9
location and lessor is set forth on Exhibit B hereto and such lessor
waives its rights with respect to such Inventory in form and substance
acceptable to the Agent and delivered in writing to the Agent prior to
such amount of Inventory being at such one or more locations.
10. EQUIPMENT REPRESENTATIONS AND WARRANTIES. With respect to its
Equipment, each Grantor warrants and represents to the Agent for the benefit of
the Lenders that the Secured Parties may rely on all statements or
representations made by such Grantor on or with respect to any Equipment and
that:
(a) All Equipment is located only at such Grantor's
locations set forth in Exhibit C hereto;
(b) None of its Equipment is or will be subject to any Lien,
claim, encumbrance or security interest whatsoever, except for the
security interest of the Agent, for the benefit of the Lenders,
hereunder and Permitted Liens;
(c) No Equipment of such Grantor is at or shall be kept at
any location that is leased by such Grantor from any other Person
unless such location and lessee is set forth on Exhibit C hereto and
such lessee waives its rights with respect to such Equipment in form
and substance acceptable to the Agent.
11. CASUALTY AND LIABILITY INSURANCE REQUIRED.
(a) Each Grantor will keep the Collateral continuously
insured against such risks as are customarily insured against by
businesses of like size and type engaged in the same or similar
operations including, without limiting the generality of any other
covenant herein contained:
(i) casualty insurance on the Inventory and the
Equipment in an amount not less than the full insurable value
thereof, against loss or damage by theft, fire and lightning
and other hazards ordinarily included under uniform broad
form standard extended coverage policies, limited only as may
be provided in the standard broad form of extended coverage
endorsement at the time in use in the states in which the
Collateral is located;
(ii) comprehensive general liability insurance
against claims for bodily injury, death or property damage
occurring with or about such Collateral (such coverage to
include provisions waiving subrogation against the Secured
Parties), with Agent and Lenders as additional insured
parties, in amounts as shall be reasonably satisfactory to
Agent;
(iii) liability insurance with respect to the
operation of its facilities under the workers' compensation
laws of the states in which such Collateral is located; and
(iv) business interruption insurance.
10
(b) Each insurance policy obtained in satisfaction of the
requirements of Section 11(a) hereof:
(i) may be provided by blanket policies now or
hereafter maintained by each Grantor or the Borrower;
(ii) shall be issued by such insurer (or insurers)
as shall be financially responsible, of recognized standing
and reasonably acceptable to the Agent;
(iii) shall be in such form and have such
provisions (including without limitation the loss payable
clause, the waiver of subrogation clause, the deductible
amount, if any, and the standard mortgagee endorsement
clause), as are generally considered standard provisions for
the type of insurance involved and are reasonably acceptable
in all respects to the Agent;
(iv) shall prohibit cancellation or substantial
modification, termination or lapse in coverage by the insurer
without at least 30 days' prior written notice to the Agent,
except for non-payment of premium, in which case such
policies shall provide ten (10) days' prior written notice;
(v) without limiting the generality of the
foregoing, all insurance policies where applicable under
Section 11(a)(i) carried on the Collateral shall name the
Agent, for the benefit of the Lenders, as loss payee and the
Agent and Lenders as parties insured thereunder in respect of
any claim for payment in excess of $250,000.
(c) Prior to expiration of any such policy, such Grantor
shall furnish the Agent with evidence satisfactory to the Agent that
the policy or certificate has been renewed or replaced or is no longer
required by this Agreement.
(d) Each Grantor hereby irrevocably makes, constitutes and
appoints the Agent (and all officers, employees or agents designated
by the Agent), for the benefit of the Lenders, effective upon the
occurrence and during the continuance of an Acceleration Event, as
such Grantor's true and lawful attorney (and agent-in-fact) for the
purpose of making, settling and adjusting claims under such policies
of insurance, endorsing the name of such Grantor on any check, draft,
instrument or other item or payment for the proceeds of such policies
of insurance and for making all determinations and decisions with
respect to such policies of insurance.
(e) In the event such Grantor shall fail to maintain, or fail
to cause to be maintained, the full insurance coverage required
hereunder or shall fail to keep any of its Collateral in good repair
and good operating condition, the Agent may (but shall be under no
obligation to), without waiving or releasing any Secured Obligation or
Event of Default by such Grantor hereunder, contract for the required
policies of insurance and pay the premiums on the same or make any
required repairs, renewals and replacements; and all sums so disbursed
by Agent, including reasonable attorneys' fees, court costs, expenses
and other
11
charges related thereto, shall be payable on demand by such
Grantor to the Agent and shall be additional Secured Obligations
secured by the Collateral.
(f) Each Grantor agrees that to the extent that it shall not
carry insurance required by Section 11(a) hereof, it shall in the
event of any loss or casualty pay promptly to the Agent, for the
benefit of the Lenders, for application in accordance with the
provisions of Section 11(h) hereof, such amount as would have been
received as Net Proceeds (as hereinafter defined) by the Agent, for
the benefit of the Lenders, under the provisions of Section 11(h)
hereof had such insurance been carried to the extent required.
(g) The Net Proceeds of the insurance carried pursuant to the
provisions of Sections 11(a)(ii) and 11(a)(iii) hereof shall be
applied by such Grantor toward extinguishment of the defect or claim
or satisfaction of the liability with respect to which such insurance
proceeds may be paid.
(h) The Net Proceeds of the insurance carried with respect to
the Collateral pursuant to the provisions of Section 11(a)(i) hereof
shall be paid to such Grantor and held by such Grantor in a separate
account and applied as follows: (i) as long as no Event of Default
shall have occurred and be continuing, after any loss under any such
insurance and payment of the proceeds of such insurance, each Grantor
shall have a period of 30 days after payment of the insurance proceeds
with respect to such loss to elect to either (x) repair or replace the
Collateral so damaged, (y) deliver such Net Proceeds to the Agent, for
the benefit of the Lenders, as additional Collateral or (z) apply such
Net Proceeds to the acquisition of tangible assets used or useful in
the conduct of the business of such Grantor, subject to the provisions
of this Agreement. If such Grantor elects to repair or replace the
Collateral so damaged, such Grantor agrees the Collateral shall be
repaired to a condition substantially similar to its condition prior
to damage or replaced with Collateral in a condition substantially
similar to the condition of the Collateral so replaced prior to
damage; and (ii) at all times during which an Event of Default shall
have occurred and be continuing, after any loss under such insurance
and payment of the proceeds of such insurance, such Grantor shall
immediately deliver such Net Proceeds to such Agent, for the benefit
of the Lenders, as additional Collateral.
(i) "Net Proceeds" when used with respect to any insurance
proceeds shall mean the gross proceeds from such proceeds, award or
other amount, less all taxes, fees and expenses (including attorneys'
fees) incurred in the realization thereof.
(j) In case of any material damage to or destruction of all
or any part of the Collateral pledged hereunder by a Grantor, such
Grantor shall give prompt notice thereof to the Agent. Each such
notice shall describe generally the nature and extent of such damage,
destruction, taking, loss, proceeding or negotiations. Each Grantor is
hereby authorized and empowered to adjust or compromise any loss under
any such insurance.
12. EVENTS OF DEFAULT. It is understood and agreed that the occurrence
of any one or more of the following shall constitute an "Event of Default"
hereunder and shall entitle the Agent, for
12
the benefit of the Lenders, to take such actions as are elsewhere provided in
this Agreement in respect of Events of Default: (a) an "Event of Default" as
defined in the Credit Agreement shall have occurred and be continuing; or (b) a
Grantor shall have failed to pay the Agent, for the benefit of the Lenders, all
of the Secured Obligations owed to it in accordance with the Guaranty Agreement
or the Credit Agreement, as applicable, on the Business Day on which the Agent
has demanded such payment; or (c) any representation or warranty made by a
Grantor herein, in the Credit Agreement in the Guaranty Agreement or in any
other existing or future agreement with any of the Secured Parties shall prove
to have been false in any material respect when made; or (d) any covenant made
by a Grantor herein (other than those covenants contained in Sections 6(a)
hereof) or in the Guaranty Agreement (other than any covenant contained in
Section 3 thereof) is breached, violated, or not complied with and not cured
within 30 days after notice thereof from any of the Secured Parties; provided,
however, that any breach, violation or non-compliance with any covenant
contained in Section 6(a) hereof or Section 3 of the Guaranty Agreement shall
immediately result in an Event of Default; or (e) any covenant made by a
Grantor in any other Loan Document or any future agreement with any of the
Secured Parties is breached, violated, or not complied with and not cured
within any grace period applicable thereto, or if no grace period is applicable
and default thereunder does not result immediately from such noncompliance,
then not cured within 30 days after notice thereof from any of the Secured
Parties, and results in a material adverse change to the Collateral taken as a
whole or its value taken as a whole; or (f) any material uninsured damage to or
loss, theft or destruction of any of the Collateral shall occur.
13. RIGHTS AND REMEDIES UPON ACCELERATION EVENT. Upon and after an
Acceleration Event, the Agent shall have the following rights and remedies on
behalf of the Lenders in addition to any rights and remedies set forth
elsewhere in this Agreement, all of which may be exercised with or, if allowed
by law, without notice to a Grantor:
(a) All of the rights and remedies of a secured party under
the Uniform Commercial Code of the state where such rights and
remedies are asserted, or under other applicable law, all of which
rights and remedies shall be cumulative, and none of which shall be
exclusive, to the extent permitted by law, in addition to any other
rights and remedies contained in this Agreement, the Guaranty
Agreement or any other Loan Document;
(b) The right to foreclose the Liens and security instruments
created under this Agreement by any available judicial procedure or
without judicial process;
(c) The right to (i) enter upon the premises of a Grantor
through self-help and without judicial process, without first
obtaining a final judgment or giving such Grantor notice and
opportunity for a hearing on the validity of the Agent's claim and
without any obligation to pay rent to such Grantor, or any other place
or places where any Collateral is located and kept, and remove the
Collateral therefrom to the premises of the Agent or any agent of the
Agent, for such time as the Agent may desire, in order effectively to
collect or liquidate the Collateral, and/or (ii) require such Grantor
to assemble the Collateral and make it available to the Agent at a
place to be designated by the Agent that is reasonably convenient to
both parties;
13
(d) The right to (i) demand payment of the Accounts; (ii)
enforce payment of the Accounts, by legal proceedings or otherwise;
(iii) exercise all of a Grantor's rights and remedies with respect to
the collection of the Accounts; (iv) settle, adjust, compromise,
extend or renew the Accounts; (v) settle, adjust or compromise any
legal proceedings brought to collect the Accounts; (vi) if permitted
by applicable law, sell or assign the Accounts upon such terms, for
such amounts and at such time or times as the Agent deems advisable;
(vii) discharge and release the Accounts; (viii) take control, in any
manner, of any item of payment or proceeds referred to in Section 4
above; (ix) prepare, file and sign a Grantor's name on a Proof of
Claim in bankruptcy or similar document against any Account Debtor;
(x) prepare, file and sign a Grantor's name on any notice of Lien,
assignment or satisfaction of Lien or similar document in connection
with the Accounts; (xi) endorse the name of a Grantor upon any chattel
paper, document, instrument, invoice, freight xxxx, xxxx of lading or
similar document or agreement relating to the Accounts or Inventory;
(xii) use a Grantor's stationery for verifications of the Accounts and
notices thereof to Account Debtors; (xiii) use the information
recorded on or contained in any data processing equipment and computer
hardware and software relating to any Collateral to which a Grantor
has access; and (xiv) do all acts and things and execute all documents
necessary, in Agent's sole discretion, to collect the Accounts; and
(e) The right to sell, assign, lease or to otherwise dispose
of all or any Collateral in its then existing condition, or after any
further manufacturing or processing thereof, at public or private sale
or sales, with such notice as may be required by law, in lots or in
bulk, for cash or on credit, with or without representations and
warranties, all as the Agent, in its sole discretion, may deem
advisable. The Agent shall have the right to conduct such sales on a
Grantor's premises or elsewhere and shall have the right to use a
Grantor's premises without charge for such sales for such time or
times as the Agent may see fit. The Agent may, if it deems it
reasonable, postpone or adjourn any sale of the Col lateral from time
to time by an announcement at the time and place of such postponed or
adjourned sale, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Each Grantor agrees
that the Agent has no obligation to preserve rights to the Collateral
against prior parties or to xxxxxxxx any Collateral for the benefit of
any Person. The Agent is hereby granted a license or other right to
use, without charge, each Grantor's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks and
advertising matter, or any property of a similar nature, as it
pertains to the Collateral, in completing production of, advertising
for sale and selling any Collateral and a Grantor's rights under any
license and any franchise agreement shall inure to the Agent's
benefit. If any of the Collateral shall require repairs, maintenance,
preparation or the like, or is in process or other unfinished state,
the Agent shall have the right, but shall not be obligated, to perform
such repairs, maintenance, preparation, processing or completion of
manufacturing for the purpose of putting the same in such saleable
form as the Agent shall deem appropriate, but the Agent shall have the
right to sell or dispose of the Collateral without such processing. In
addition, each Grantor agrees that in the event notice is necessary
under applicable law, written notice mailed to such Grantor in the
manner specified herein seven (7) days prior to the date of public
sale of any of the Collateral or prior to the date after which any
private sale or other disposition of the Collateral will be made shall
constitute commercially reasonable notice to
14
such Grantor. All notice is hereby waived with respect to any of the
Collateral which threatens to decline speedily in value or is of a
type customarily sold on a recognized market. The Agent may purchase
all or any part of the Collateral at public or, if permitted by law,
private sale, free from any right of redemption which is hereby
expressly waived by such Grantor and, in lieu of actual payment of
such purchase price, may set off the amount of such price against the
Secured Obligations. The net cash proceeds resulting from the
collection, liquidation, sale, lease or other disposition of the
Collateral shall be applied first to the expenses (including all
attorneys' fees) of retaking, holding, storing, processing and
preparing for sale, selling, collecting, liquidating and the like, and
then to the satisfaction of all Secured Obligations. Any sale or other
disposition of the Collateral and the possession thereof by the Agent
shall be in compliance with all provisions of applicable law
(including applicable provisions of the Uniform Commercial Code). Each
Grantor shall be liable to the Agent, for the benefit of the Lenders,
and shall pay to the Agent, for the benefit of the Lenders, on demand
any deficiency which may remain after such sale, disposition,
collection or liquidation of the Collateral. The Agent shall remit to
such Grantor or other Person entitled thereto any surplus remaining
after this Agreement has been terminated in accordance with Section 27
hereof.
14. ANTI-MARSHALLING PROVISIONS. The right is hereby given by each
Grantor to the Agent, for the benefit of the Lenders, to make releases (whether
in whole or in part) of all or any part of the Collateral agreeable to the
Agent without notice to, or the consent, approval or agreement of other parties
and interests, including junior lienors, which releases shall not impair
in any manner the validity of or priority of the Liens and security interests
in the remaining Collateral conferred under such documents, nor release such
Grantor from personal liability for the Secured Obligations hereby secured.
Notwithstanding the existence of any other security interest in the Collateral
held by the Agent, for the benefit of the Lenders, the Agent shall have the
right to determine the order in which any or all of the Collateral shall be
subjected to the remedies provided in this Agreement. The proceeds realized
upon the exercise of the remedies provided herein shall be applied by the
Agent, for the benefit of the Lenders, in the manner herein provided. Each
Grantor hereby waives any and all right to require the marshalling of assets in
connection with the exercise of any of the remedies permitted by applicable law
or provided herein.
15. APPOINTMENT OF AGENT AS A GRANTOR'S LAWFUL ATTORNEY. Without
limitation of any other provision of this Agreement, upon and after an
Acceleration Event, each Grantor irrevocably designates, makes, constitutes and
appoints the Agent(and all Persons designated by the Agent), for the benefit of
the Lenders, as such Grantor's true and lawful attorney (and agent-in-fact) to
take all actions and to do all things required to be taken or done by such
Grantor under this Agreement. All acts of the Agent or its designee taken
pursuant to this Section 15 are hereby ratified and confirmed and the Agent or
its designee shall not be liable for any acts of omission or commission nor for
any error of judgment or mistake of fact or law, other than as a result of its
gross negligence or willful misconduct. This power, being coupled with an
interest, is irrevocable by such Grantor until this Agreement has been
terminated in accordance with Section 27 hereof.
16. RIGHTS AND REMEDIES CUMULATIVE; NON-WAIVER; ETC. The enumeration
of the rights and remedies of the Agent, for the benefit of the Lenders, set
forth in this Agreement is not
15
intended to be exhaustive and the exercise by any Secured Party of any right or
remedy shall not preclude the exercise of any other rights or remedies, all of
which shall be cumulative, and shall be in addition to any other right or
remedy given hereunder, or under any other agreement between a Grantor and the
Secured Parties or which may now or hereafter exist in law or in equity or by
suit or otherwise. No delay or failure to take action on the part of any
Secured Party in exercising any right, power or privilege shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude other or further exercise thereof or the exercise
of any other right, power or privilege or shall be construed to be a waiver of
any Event of Default. No waiver by a party hereunder shall be effective unless
it is in writing and signed by the party making such waiver, and then only to
the extent specifically stated in such writing. No course of dealing between a
Grantor and the Agent or the Agent's agents or employees shall be effective to
change, modify or discharge any provision of this Agreement or to constitute a
waiver of any Event of Default. The Agent shall not have any liability for any
error, omission or delay of any kind occurring in the handling or liquidation
of the Collateral or for any damages resulting therefrom, other than as a
result of its gross negligence or willful misconduct.
17. SUPPLEMENTAL DOCUMENTATION. At the Agent's request, each Grantor
shall execute and deliver to the Agent, at any time or times hereafter, all
documents, instruments and other written matter that the Agent may request to
perfect and maintain perfected the Agent's (for the benefit of the Lenders)
security interest in the Collateral, in form and substance acceptable to the
Agent, and pay all charges, expenses and fees the Agent may reasonably incur in
filing any of such documents, and all taxes relating thereto. Each Grantor
agrees that a carbon, photographic, photostatic, or other reproduction of this
Agreement or a financing statement is sufficient as a financing statement and
may be filed by the Agent in any filing office.
18. WAIVERS. In addition to the other waivers contained herein, each
Grantor hereby expressly waives, to the extent permitted by law: presentment
for payment, demand, protest, notice of demand, notice of protest, notice of
default or dishonor, notice of payments and nonpayments and all other notices
and consents to any action taken by the Agent unless expressly required by this
Agreement.
19. TRADE NAMES. Each Grantor represents that the only trade name(s)
or style(s) used by such Grantor are as set forth on Exhibit D, next to the
name of such Grantor.
20. NOTICE. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telecopy (where the receipt of
such message is verified by return) expressly provided for hereunder, when
received at such telephone or telecopy number as may from time to time be
specified in written notice to the other parties hereto or otherwise received),
or if sent prepaid by certified or registered mail return receipt requested on
the third Business Day after the day on which mailed, or if sent prepaid by a
national overnight courier service, on the first Business Day after the day on
which delivered to such service against receipt therefor, addressed to such
party at said address:
16
(a) if to any Grantor: c/o Lumen Technologies, Inc.
000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, Xxx Xxxx 00000
Attention: Mr. Ian X.X. Xxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to: Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(b) if to the Agent: NationsBank, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxx, Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to: NationsBank, N.A.
Corporate Banking
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxx Xxxxxxxxx,
Senior Vice President
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
or to such other address as each party may designate for itself by like notice
given in accordance with this Section 20.
21. DEFINITIONS. All terms used herein shall be defined in accordance
with the appropriate definitions appearing in the Uniform Commercial Code as in
effect in New York, and such definitions are hereby incorporated herein by
reference and made a part hereof.
22. ENTIRE AGREEMENT. This Agreement, together with the Credit
Agreement, the Guaranty Agreement and other Loan Documents, constitutes and
expresses the entire understanding between the parties hereto with respect to
the subject matter hereof, and supersedes all prior agreements and
understandings, inducements, commitments or conditions, express or implied,
oral or written, except as herein contained. The express terms hereof control
and supersede any course of performance or usage of the trade inconsistent with
any of the terms hereof. Neither this Agreement nor any portion or provision
hereof may be changed, altered, modified, supplemented, discharged, canceled,
terminated, or amended orally or in any manner other than by an agreement, in
writing signed by the parties hereto.
17
23. SWAP AGREEMENTS. All Hedging Obligations of any Grantor shall be
deemed to be Secured Obligations secured hereby, and each Lender or affiliate
of a Lender party to any Swap Agreement shall be deemed to be a Secured Party
hereunder.
24. SEVERABILITY. The provisions of this Agreement are independent of
and separable from each other. If any provision hereof shall for any reason be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect the validity or enforceability of any other provision hereof, but this
Agreement shall be construed as if such invalid or unenforceable provision had
never been contained herein.
25. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of each Grantor, and the rights, remedies, powers, and
privileges of the Agent hereunder shall inure to the benefit of the successors
and assigns of the Agent; provided, however, that no Grantor shall make any
assignment hereof without the prior written consent of the Agent.
26. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
27. TERMINATION; RELEASE. On the Facility Termination Date, this
Agreement and all obligations of each Grantor hereunder shall terminate without
delivery of any instrument or performance of any act by any party, and the
Collateral shall automatically be released from the Liens created by this
Agreement and all rights to such Collateral shall automatically revert to such
Grantor. Notwithstanding the immediately preceding sentence, upon such
termination of this Agreement, the Agent shall reassign and redeliver such
Collateral then held by or for the Agent and execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence
such termination.
28. LEASE ASSIGNMENT AND LANDLORD WAIVER. If at any time any Grantor
moves a significant portion of its Inventory from any location identified in
Exhibit B hereto to a leased or rented building, warehouse or other facility of
whatever description not identified in Exhibit B (each a "New Leased
Facility"), each Grantor hereby agrees that it will execute and deliver to the
Agent, for the benefit of the Agent and the Lenders, an assignment of such
Grantor's interest in the lease with respect to each such New Leased Facility,
as applicable, in form and substance satisfactory to the Agent. Each Grantor
further agrees that at such time, and as applicable, it will deliver or cause
to be delivered to the Agent, for the benefit of the Agent and the Secured
Parties, a landlord's waiver executed by the owner, or any other Person serving
as landlord, of such New Leased Facility, in form and substance reasonably
satisfactory to the Agent.
29. GOVERNING LAW.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
(B) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING
18
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT
SITTING IN THE XXXXXX XX XXX XXXX, XXXXX XX XXX XXXX, XXXXXX XXXXXX OF
AMERICA AND, BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
PARTY EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER
TO THE LAYING OF THE VENUE OR TO THE JURISDICTION OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND
UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH
SUIT, ACTION OR PROCEEDING.
(C) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH PARTY PROVIDED
BY SECTION 20 HEREOF, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR
UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.
(D) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL
PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS IN THE COURTS OF ANY PLACE WHERE ANY PARTY OR ANY OF SUCH
PARTY'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT
PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH PARTY
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR HEREAFTER,
BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE, MAY BE
AVAILABLE TO IT.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH PARTY
HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY AND EACH PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[SIGNATURE PAGES FOLLOW]
19
IN WITNESS WHEREOF, the parties have duly executed this Second Amended
and Restated Security Agreement on the day and year first written above.
GRANTORS:
LUMEN TECHNOLOGIES, INC.
By: /s/ Xxxxxxx XxXxxxxxx
-----------------------------
Name: Xxxxxxx XxXxxxxxx
---------------------------
Title: Vice President of Finance
--------------------------
ORC TECHNOLOGIES, INC.
By: /s/ Xxxxxxx XxXxxxxxx
-----------------------------
Name: Xxxxxxx XxXxxxxxx
---------------------------
Title: Vice President
--------------------------
BILC ACQUISITION CORP., which is
the surviving corporation in a
merger with ILC TECHNOLOGY, INC.
effective on the date hereof and
simultaneously therewith changed
its name to ILC Technology, Inc.
By: /s/ Xxxxxxx XxXxxxxxx
-----------------------------
Name: Xxxxxxx XxXxxxxxx
---------------------------
Title: Vice President
--------------------------
SECURITY AGREEMENT
Signature Page 1 of 2
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION, as Agent
for the Lenders
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxxx
---------------------------
Title: Senior Vice President
--------------------------
SECURITY AGREEMENT
Signature Page 2 of 2
