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EXHIBIT 10.11
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$25,000,000
CREDIT AGREEMENT
DATED AS OF NOVEMBER 12, 1997
AMONG
FWT, INC.,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
and
BT COMMERCIAL CORPORATION,
as Agent
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FWT, INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement . . . . 32
1.3 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.1 Commitments; Making of Loans; the Register; Notes . . . . . . . . . . . . . . . . . . . . . 33
2.2 Interest on the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2.4 Prepayments of Revolving Loans; General Provisions Regarding Payments; Termination of
Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2.5 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2.6 Special Provisions Governing Eurodollar Rate Loans . . . . . . . . . . . . . . . . . . . . 49
2.7 Increased Costs; Taxes; Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . 51
2.8 Obligation of Lenders and Issuing Lenders to Mitigate . . . . . . . . . . . . . . . . . . . 56
2.9 Collection, Deposit and Transfer of Payments in Respect of Accounts . . . . . . . . . . . . 57
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein . . . . . . . 59
3.2 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
3.3 Drawings and Reimbursement of Amounts Drawn Under Letters of Credit. . . . . . . . . . . . 63
3.4 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
3.5 Indemnification; Nature of Issuing Lenders' Duties . . . . . . . . . . . . . . . . . . . . 67
3.6 Increased Costs and Taxes Relating to Letters of Credit . . . . . . . . . . . . . . . . . . 68
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4.1 Conditions to Initial Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4.2 Conditions to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
4.3 Conditions to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries . . . . . . . 78
5.2 Authorization of Borrowing, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
5.3 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
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5.4 No Material Adverse Change; No Restricted Junior Payments . . . . . . . . . . . . . . . . . 81
5.5 Title to Properties; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
5.6 Litigation; Adverse Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
5.7 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
5.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts . . . . . . . 82
5.9 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
5.10 Securities Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
5.11 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
5.12 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
5.13 Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
5.14 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
5.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
5.16 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
5.17 Related Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
6.1 Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 87
6.2 Corporate Existence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
6.3 Payment of Taxes and Claims; Tax Consolidation . . . . . . . . . . . . . . . . . . . . . . 94
6.4 Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
6.5 Inspection; Lender Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
6.6 Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
6.7 Environmental Disclosure and Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . 97
6.8 Company's Remedial Action Regarding Hazardous Materials . . . . . . . . . . . . . . . . . . 99
6.9 Refinancing of Bridge Notes; Conversion to Term Loans under the Bridge Note Agreement . . . 99
6.10 Execution of Guaranties and Collateral Documents by Future Subsidiaries . . . . . . . . . . 100
SECTION 7. COMPANY'S NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
7.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
7.2 Liens and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
7.3 Investments; Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
7.4 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
7.5 Restricted Junior Payments; Certain Other Payments . . . . . . . . . . . . . . . . . . . . 105
7.6 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions . . . . . . . . . . . . . 106
7.8 Consolidated Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
7.9 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
7.10 Sales and Lease-Backs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
7.11 Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
7.12 Transactions with Shareholders and Affiliates . . . . . . . . . . . . . . . . . . . . . . . 108
7.13 Disposal of Subsidiary Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
7.14 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
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7.15 Amendments of Certain Documents; Designation of Designated Senior Debt . . . . . . . . . . 109
7.16 Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
8.1 Failure to Make Payments When Due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
8.2 Default in Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
8.3 Breach of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
8.4 Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
8.5 Other Defaults Under Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . 112
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . 112
8.8 Judgments and Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
8.9 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
8.10 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
8.11 Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
8.12 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
8.13 Invalidity of Any Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
8.14 Failure of Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
8.15 Action Relating to Certain Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . 115
8.16 Failure to Consummate Recapitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . 115
SECTION 9. AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
9.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
9.2 Powers and Duties; General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
9.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness . . . . 118
9.4 Right to Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
9.5 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
9.6 Collateral Documents and Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
10.1 Assignments and Participations in Loans and Letters of Credit . . . . . . . . . . . . . . . 120
10.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
10.3 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
10.4 Set-Off; Security Interest in Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . 125
10.5 Ratable Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
10.6 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
10.7 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
10.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
10.9 Survival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . 128
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . 128
10.11 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
10.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
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10.13 Obligations Several; Independent Nature of Lenders' Rights . . . . . . . . . . . . . . . . . . . . . 129
10.14 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
10.15 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
10.16 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
10.17 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
10.18 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
10.19 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
10.20 Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Signature pages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT
IV FORM OF REVOLVING NOTE
V FORM OF COMPLIANCE CERTIFICATE
VI FORM OF FINANCIAL CONDITION CERTIFICATE
VII FORM OF BORROWING BASE CERTIFICATE
VIII FORM OF OPINION OF AKIN, GUMP, STRAUSS, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
IX FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇
X FORM OF ASSIGNMENT AGREEMENT
XI FORM OF AUDITOR'S LETTER
XII FORM OF CERTIFICATE RE NON-BANK STATUS
XIII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIV FORM OF BLOCKED ACCOUNT AGREEMENT
XV FORM OF COLLATERAL ACCESS AGREEMENT
XVI FORM OF LOCK BOX AGREEMENT
XVII FORM OF COMPANY SECURITY AGREEMENT
XVIII FORM OF COMPANY PLEDGE AGREEMENT
XIX FORM OF COMPANY TRADEMARK SECURITY AGREEMENT
XX FORM OF COMPANY PATENT SECURITY AGREEMENT
XXI FORM OF SUBSIDIARY GUARANTY
XXII FORM OF SUBSIDIARY SECURITY AGREEMENT
XXIII FORM OF SUBSIDIARY PLEDGE AGREEMENT
XXIV FORM OF SUBSIDIARY TRADEMARK SECURITY AGREEMENT
XXV FORM OF SUBSIDIARY PATENT SECURITY AGREEMENT
XXVI FORM OF INTERCREDITOR AGREEMENT
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SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C CAPITAL AND OWNERSHIP STRUCTURE
5.1 SUBSIDIARIES OF COMPANY
5.5 REAL PROPERTY ASSETS
5.6 LITIGATION
5.12 CERTAIN FEES
5.13 ENVIRONMENTAL MATTERS
7.3 CERTAIN EXISTING INVESTMENTS
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CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of November 12, 1997 and
entered into by and among FWT, INC., a Texas corporation ("Company"), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (EACH INDIVIDUALLY
REFERRED TO HEREIN AS A "LENDER" and collectively as "LENDERS"), and BT
COMMERCIAL CORPORATION ("BTCC"), as agent for Lenders (in such capacity,
"AGENT").
R E C I T A L S
WHEREAS, in connection with the consummation of the
capitalization the Company will repay all of its existing indebtedness in the
approximate aggregate principal amount of $22,000,000;
WHEREAS, in order to finance the consummation of the
recapitalization and related transactions, the Company will issue not less than
$100,000,000 of Bridge Notes and will use approximately $8,000,000 of cash on
hand to pay approximately $8,000,000 of fees and expenses incurred in
connection with the Recapitalization and related transactions;
WHEREAS, Company desires that Lenders extend certain credit
facilities to Company to provide financing for working capital and other
General corporate purposes of Company and its Subsidiaries; and
WHEREAS, Company has agreed to secure its Obligations by
fledging to Agent for the benefit of Lenders all of the capital stock of its
subsidiaries and by granting to Agent for
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the benefit of Lenders a security interest in substantially all of its other
personal property;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Company, Lenders and
Agent agree as follows:
SECTION 1. DEFINITIONS
1 .1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACCOUNT" means, with respect to any Person, all present and
future rights of such Person to payment for goods sold or leased or for
services rendered (except those evidenced by instruments or chattel paper),
whether now existing or hereafter arising and wherever arising, and whether or
not they have been earned by performance.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (i) the offered quotation
rounded upward to the nearest 1/16 of one percent) to first class banks in the
Interbank Eurodollar market by BTCo for U.S. dollar deposits of amounts in same
day funds comparable to the principal amount of the Eurodollar Rate Loan of
BTCC for which the Adjusted Eurodollar Rate is then being determined with
maturities comparable to such Interest Period as of approximately 12:00 noon
New York time) on such Interest Rate Determination Date by (ii) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements
including, without limitation, any marginal, emergency, supplemental, special
or other reserves) applicable on such Interest Rate Determination Date to any
member bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"ADJUSTED PRO RATA SHARE" means, with respect to any Lender,
the percentage obtained by dividing (i) the Revolving Loan Exposure of that
lender by (ii) the aggregate Revolving Loan Exposure of all Lenders other than
Daily Funding Lender.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control" (including,
with correlative meanings, the
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terms "controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
person, whether through the ownership of voting securities or by contract or
otherwise.
"AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor Agent
appointed pursuant to subsection 9.5.
"AGREEMENT" means this Credit Agreement dated as of November
12, 1997, as it may be amended, supplemented or otherwise modified from time to
time.
"ASSET SALE" means the sale by Company or any of its
subsidiaries to any Person other than Company or any of its wholly-owned
subsidiaries of (i) any of the stock of any of Company's Subsidiaries, (ii)
substantially all of the assets of any division or line of business of Company
or any of its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of Company or any of its Subsidiaries (other than (a) inventory
sold in the ordinary course of business and (b) any such other assets to the
extent that the aggregate value of such assets sold in any single transaction
or related series of transactions is equal to $50,000 or less).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit X annexed hereto.
"AUDITOR'S LETTER" means a letter, substantially in the form
of Exhibit XI annexed hereto, executed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and delivered to
agent pursuant to subsection 4.1 or 6.1(iii).
"▇▇▇▇▇" means ▇▇▇▇▇ Communications Fund, L.P.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
Statute.
"BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds
effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"BLOCKED ACCOUNT AGREEMENT" means the Blocked Account
Agreement executed and delivered by a Concentration Bank, Agent and the
applicable Loan Party, substantially in the form of Exhibit XIV annexed hereto,
as such Blocked Account Agreement may be amended, supplemented or otherwise
modified from time to time,
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and "BLOCKED ACCOUNT AGREEMENTS" means all such Blocked Account Agreements,
collectively.
"BORROWING BASE" means, as at any date of determination, an
aggregate amount equal to:
(i) eighty-five percent (85%) of Eligible Accounts
Receivable plus
(ii) sixty percent (60%) of Eligible Inventory minus
(iii) the aggregate amount of reserves, if any, established
by Agent in the exercise of its Permitted Discretion against Eligible
Accounts Receivable and Eligible Inventory;
provided that Agent, in the exercise of its Permitted Discretion, may (a)
increase or decrease reserves against Eligible Accounts Receivable and Eligible
inventory and (b) reduce the advance rates provided in this definition, or
restore such advance rates to any level equal to or below the advance rates in
effect as of the Closing Date.
"BORROWING BASE CERTIFICATE" means a certificate substantially
in the form of Exhibit VII annexed hereto delivered to Lenders by Company
pursuant to subsection 4.1 or subsection 6.1(xix).
"BRIDGE NOTE AGREEMENT" means that certain Senior Secured
Credit Agreement dated as of November 12, 1997 among Company, the lenders named
therein, and BTCo, as administrative agent, pursuant to which the initial loans
under the Bridge Notes are made, as in effect on the date of execution of this
agreement and as such agreement may be amended from time to time thereafter to
the extent permitted under subsection 7.15.
"BRIDGE NOTES" means the senior secured notes issued by
company on the Closing Date, in the form of Exhibit I to the Bridge Note
agreement, evidencing loans of up to $100,000,000 in aggregate principal amount
pursuant to the Bridge Note Agreement, which notes shall accrue interest prior
to default at a rate no greater than 18% per annum (of which no greater than
15% per annum may be payable in cash), in each case as such notes may be
amended from time to time to the extent permitted under subsection 7.15.
"BTCC" has the meaning assigned to that term in the
introduction to this Agreement.
"BTCC ACCOUNT" means an account maintained by Agent at BTCo
into which the applicable Concentration Banks are instructed to transfer funds
in deposit in the applicable Concentration
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Accounts pursuant to the terms of the applicable Blocked Account Agreement, if
any.
"BTCO" means Bankers Trust Company.
"BT CONCENTRATION ACCOUNT" means an account under the
exclusive dominion and control of Agent that is maintained by any Loan Party
with BTCo into which the applicable Lock Box Banks are instructed to transfer
funds on deposit in the Lock Box Accounts pursuant to the terms of the Lock Box
Agreements.
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the States of New York or
Texas or is a day on which banking institutions located in either such state
are authorized or required by law or other governmental action to close.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (a)
marketable securities (1) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (2) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (b) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, the highest
rating obtainable from either Standard & Poor's Ratings Services ("S&P") or
▇▇▇▇▇'▇ Investors Service, Inc. ("MOODY'S"); (c) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (d) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (1) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (2) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (e) shares of any money market mutual fund that (1)
was at least 95% of its assets invested continuously in the types of
investments referred to in clauses (a) and (b) above, (2) has net
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assets of not less than $500,000,000, and (3) has the highest rating obtainable
from either S&P or ▇▇▇▇▇'▇.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit XII annexed hereto delivered by a Lender
to Agent pursuant to subsection 2.7B(iii).
"CLOSING DATE" means the date on or before November 30, 1997,
on which the conditions set forth in subsection 4.1 have been satisfied by
Company or have been waived in writing by Agent.
"COLLATERAL" means, collectively, all of the personal property
(including capital stock) in which Liens are purported to be granted by the
Collateral Documents.
"COLLATERAL ACCESS AGREEMENT" means any landlord waiver,
mortgagee waiver, bailee letter or any similar acknowledgement agreement of any
landlord or mortgagee in respect of any Real Property Asset where any Inventory
is located or any warehouseman or processor in possession of Inventory,
substantially in the form of Exhibit XV annexed hereto, with such changes
thereto as may be agreed to by Agent.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in
the Collateral Account Agreement.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed and delivered by Company and Agent on the Closing Date,
substantially in the form of Exhibit XIII annexed hereto, as such Collateral
Account Agreement may hereafter be amended, supplemented or otherwise modified
from time to time.
"COLLATERAL DOCUMENTS" means the Collateral Account Agreement,
the Company Security Agreement, the Company Pledge Agreement, the Company
Trademark Security Agreement, the Company Patent Security Agreement, the
Subsidiary Security Agreements, the Subsidiary Pledge Agreements, the
Subsidiary Trademark Security Agreements, the Subsidiary Patent Security
Agreements, the Blocked Account Agreements and the Lock Box Agreements.
"COMMITMENTS" means the Revolving Loan Commitments.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPANY COMMON STOCK" means the common stock of Company, par
value $10.00 per share.
"COMPANY PATENT SECURITY AGREEMENT" means the Company Patent
Collateral Assignment and Security Agreement executed and delivered by Company
on the Closing Date, substantially in the
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form of Exhibit XX annexed hereto, as such Company Patent Collateral Assignment
and Security Agreement may be amended, supplemented or otherwise modified from
time to time.
"COMPANY PLEDGE AGREEMENT" means the Company Pledge Agreement
executed and delivered by Company on the Closing Date, substantially in the
form of Exhibit XVIII annexed hereto, as such Company Pledge Agreement may be
amended, supplemented or otherwise modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Company Security
Agreement executed and delivered by Company on the Closing Date, substantially
in the form of Exhibit XVII annexed hereto, as such Company Security Agreement
may be amended or supplemented or otherwise modified from time to time.
"COMPANY TRADEMARK SECURITY AGREEMENT" means the Company
Trademark Collateral Security Agreement and Conditional Assignment executed and
delivered by Company on the Closing Date, substantially in the form of Exhibit
XIX annexed hereto, as such Company Trademark Collateral Security Agreement and
Conditional Assignment may be amended, supplemented or otherwise modified from
time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit V annexed hereto delivered to Agent and Lenders by Company
pursuant to subsection 6.1(iv).
"CONCENTRATION ACCOUNTS" means, collectively, the BT
Concentration Accounts and the Other Bank Concentration Accounts.
"CONCENTRATION BANK" means BTCo or any commercial bank
satisfactory to Agent at which any Loan Party maintains a Concentration
Account.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
sum of (i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Company and
its Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries plus (ii) to the extent not covered by
clause (i) of this definition, the aggregate of all expenditures by Company and
its Subsidiaries during that period to acquire (by purchase or otherwise) the
business, property or fixed assets of any Person, or the stock or other
evidence of beneficial ownership of any Person that, as a result of such
acquisition, becomes a Subsidiary of Company.
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"CONSOLIDATED EBITDA" means, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated Net Income,
(ii) Consolidated Interest Expense, (iii) provisions for taxes based on income,
(iv) total depreciation expense, (v) total amortization expense, and (vi) other
non-cash items reducing Consolidated Net Income less other non-cash items
increasing Consolidated Net Income, all of the foregoing as determined on a
consolidated basis for Company and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries, including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements, but
excluding, however, any amounts referred to in subsection 2.3 payable to Agent
and Lenders on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of any
Person (other than a Subsidiary of Company) in which any other Person (other
than Company or any of its Subsidiaries) has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid to
Company or any of its Subsidiaries by such Person during such period, (ii) the
income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of Company or is merged into or consolidated with Company or any of
its Subsidiaries or that Person's assets are acquired by Company or any of its
Subsidiaries, (iii) the income of any Subsidiary of Company to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary, (iv)
any after-tax gains or losses attributable to Asset Sales or returned surplus
assets of any Pension Plan, and (v) (to the extent not included in clauses (i)
through (iv) above) any net extraordinary gains or net non-cash extraordinary
losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
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"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Interest Rate Agreements and Currency Agreements.
Contingent Obligations shall include, without limitation, (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to
make take-or-pay or similar payments if required regardless of non-performance
by any other party or parties to an agreement, and (c) any liability of such
Person for the obligation of another through any agreement (contingent or
otherwise) (X) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (Y) to maintain the solvency or any balance
sheet item, level of income or financial condition of another if, in the case
of any agreement described under subclauses (X) or (Y) of this sentence, the
primary purpose or intent thereof is as described in the preceding sentence.
The amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if less, the amount to
which such Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument
to which that Person is a party or by which it or any of its properties is
bound or to which it or any of its properties is subject.
"CONVERSION DATE" has the meaning assigned to such term in the
Bridge Note Agreement.
"CONVERSION NOTES" means the senior secured notes, if any,
issued by Company on the Conversion Date and evidencing term loans, the
aggregate principal amount of which shall have been converted from, and shall
not exceed the then outstanding principal amount of, the Bridge Notes, in the
form of Exhibit II to the Bridge Note Agreement as in effect on the Closing
Date, which notes (i) shall have no required principal payments prior
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17
to the sixth anniversary of the Closing Date and (ii) shall accrue interest
prior to default at a rate no greater than 18% per annum (of which no greater
than 15% per annum may be payable in cash), in each case as such notes may be
amended from time to time to the extent permitted under subsection 7.15.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement.
"DAILY FUNDING LENDER" means Agent, in its individual capacity
as a Lender hereunder.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOMESTIC SUBSIDIARY" means a direct or indirect Subsidiary of
Company that is incorporated or organized under the laws of a state of the
United States of America.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"ELIGIBLE ACCOUNTS RECEIVABLE" means, with respect to Company
and Company's Subsidiaries which are Loan Parties, Accounts of such Loan Party
deemed by Agent in the exercise of its Permitted Discretion to be eligible for
inclusion in the calculation of the Borrowing Base. In determining the amount
to be so included, the face amount of such Accounts shall be reduced by the
amount of all returns, discounts, deductions, claims, credits, charges, or
other allowances. Unless otherwise approved in writing by Agent, an Account
shall not be an Eligible Account Receivable if:
(a) it arises out of a sale made by such Loan Party to an
Affiliate; or
(b) its payment terms are longer than 30 days from date
of invoice; or
(c) it remains unpaid for more than 60 days after the
original payment due date (or, for the first nine months following the
Closing Date with respect to Accounts as to which there are no
disputes or unissued credits, it remains unpaid for more than 90 days
after the original payment due date); or
(d) it is from the same account debtor or its Affiliate
and fifty percent (50%) or more of all Accounts
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from that acount debtor (and its Affiliates) are ineligible under (c)
above; or
(e) when aggregated with all other Accounts of an account
debtor, such Account exceeds twenty-five percent (25%) or, in the case
of Accounts in which AT&T Wireless Services, Inc., is the account
debtor, thirty percent (30%), in face value of all Accounts of the
Loan Parties then outstanding, but only to the extent of such excess,
unless such excess is supported by an irrevocable letter of credit
satisfactory to Agent (as to form, substance and issuer) and assigned
to and directly drawable by Agent; or
(f) the account debtor for such Account is a creditor of
such Loan Party, has or has asserted a right of setoff against such
Loan Party, or has disputed its liability or otherwise has made any
claim with respect to such Account or any other Account which has not
been resolved, in each case to the extent of the amount owed by such
Loan Party to such account debtor, the amount of such actual or
asserted right of setoff, or the amount of such dispute or claim, as
the case may be; or
(g) the account debtor is (or its assets are) the subject
of an Insolvency Event; or
(h) such Account is not payable in Dollars or the account
debtor for such Account is located outside the continental United
States, unless such Account is supported by an irrevocable letter of
credit satisfactory to Agent (as to form, substance and issuer) and
assigned to and directly drawable by Agent; or
(i) the sale to the account debtor is on a ▇▇▇▇-and-hold,
guarantied sale, sale-and-return, sale on approval or consignment
basis or made pursuant to any other written agreement providing for
repurchase or return; provided that no Account will be excluded
pursuant to this clause (i) if such ▇▇▇▇-and-hold or similar
arrangement is pursuant to a written agreement delivered to, and
approved in writing by, Agent; or
(j) Agent determines by its own reasonable credit analysis
that collection of such Account is uncertain or that such Account may
not be paid; or
(k) the account debtor is the United States of America or
any department, agency or instrumentality thereof, unless such Loan
Party duly assigns its rights to payment of such Account to Agent
pursuant to the Assignment of Claims Act of 1940, as amended (31
U.S.C. Sections 3727 et seq.); or
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(l) the goods giving rise to such Account have not been
shipped and delivered to and accepted by the account debtor, the
services giving rise to such Account have not been performed and
accepted, or such Account otherwise does not represent a final sale;
provided that no Account will be excluded pursuant to this clause (l)
if such goods have not been shipped pursuant to a written
▇▇▇▇-and-hold arrangement delivered to, and approved in writing by,
Agent; or
(m) such Account does not comply in any material respect
with all Requirements of Law, including without limitation the Federal
Consumer Credit Protection Act, the Federal Truth in Lending Act and
Regulation Z of the Board of Governors of the Federal Reserve System;
or
(n) such Account is subject to any adverse security
deposit, progress payment or other similar advance made by or for the
benefit of the applicable account debtor; or
(o) it is not subject to a valid and perfected first
priority Lien in favor of Agent or does not otherwise conform to the
representations and warranties contained in the Loan Documents;
provided that Agent, in the exercise of its Permitted Discretion, may impose
additional restrictions (or eliminate the same) to the standards of eligibility
set forth in this definition.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a savings and
loan association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of any
other country or a political subdivision thereof; provided that (x) such bank
is acting through a branch or agency located in the United States or (y) such
bank is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans in the ordinary course of its businesses including, but
not limited to, insurance companies, mutual funds and lease financing
companies; and (B) any Lender and any Affiliate of any Lender; provided that no
Affiliate of Company shall be an Eligible Assignee.
"ELIGIBLE INVENTORY" means, with respect to Company and
Company's Subsidiaries which are Loan Parties, the aggregate amount of
Inventory of such Loan Party deemed by Agent in the exercise of its Permitted
Discretion to be eligible for inclusion in the calculation of the Borrowing
Base. In determining the amount to be so included, Inventory shall be valued
at the lower of cost or market on a basis consistent with such Loan Party's
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current and historical accounting practice. Unless otherwise approved in
writing by Agent, an item of Inventory shall not be included in Eligible
Inventory if:
(a) it is not owned solely by such Loan Party or such
Loan Party does not have good, valid and marketable title thereto; or
(b) it is not located in the United States; or
(c) it is not located on property owned or leased by a
Loan Party or in a contract warehouse, in each case subject to a
Collateral Access Agreement executed by any applicable mortgagee,
lessor or contract warehouseman, as the case may be, and segregated or
otherwise separately identifiable from goods of others, if any, stored
on the premises; or
(d) it is not subject to a valid and perfected first
priority Lien in favor of Agent except, with respect to Inventory
stored at sites described in clause (c) above, for Liens for unpaid
rent or normal and customary warehousing charges; or
(e) it consists of goods returned or rejected by such
Loan Party's customers or goods in transit to third parties (other
than to warehouse sites covered by a Collateral Access Agreement); or
(f) it is not first-quality goods, is obsolete or slow
moving, or does not otherwise conform to the representations and
warranties contained in the Loan Documents;
provided that Agent, in the exercise of its Permitted Discretion, may impose
additional restrictions (or eliminate the same) to the standards of eligibility
set forth in this definition. It is understood and agreed that an item of
Inventory which is subject to a ▇▇▇▇-and-hold or other similar arrangement
which renders the related Account ineligible under clause (i) of the definition
of "Eligible Accounts Receivable" if otherwise eligible as Eligible Inventory
under this definition may be included in the Borrowing Base as Eligible
Inventory.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is, or was at any time, maintained or
contributed to by Company or any of its ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice
of violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person for any
damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
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indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Company, any of
its Subsidiaries, any of their respective Affiliates or any Facility.
"ENVIRONMENTAL LAWS" means all statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and requirements having the
force of law relating to (i) environmental matters, including, without
limitation, those relating to fines, injunctions, penalties, damages,
contribution, cost recovery compensation, losses or injuries resulting from the
Release or threatened Release of Hazardous Materials, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, land use or the protection
of human, plant or animal health or welfare from environmental hazards, in any
manner applicable to Company or any of its Subsidiaries or any of their
respective properties, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section
9601 et seq.) ("CERCLA"), the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.), the Federal Water Pollution Control Act ( 33 U.S.C.
Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.),
the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et
seq.), each as amended or supplemented, and any analogous future or present
local, state and federal statutes and regulations promulgated pursuant thereto,
each as in effect as of the date of determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA AFFILIATE", as applied to any Person, means (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the Internal Revenue Code of
which that Person is a member; and (iii) any member of an affiliated service
group within the meaning of Section 414(m) or (o) of the Internal Revenue Code
of which that Person, any corporation described in clause (i) above or any
trade or business described in clause (ii) above is a member. Any former ERISA
Affiliate of a Person
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shall continue to be considered an ERISA Affiliate within the meaning of this
definition with respect to the period such entity was an ERISA Affiliate of the
Person and with respect to liabilities arising after such period for which the
Person could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by Company or any of its ERISA Affiliates from any Pension Plan
with two or more contributing sponsors or the termination of any such Pension
Plan resulting in liability pursuant to Sections 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which might constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on Company or any of its ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal by Company or any
of its ERISA Affiliates in a complete or partial withdrawal (within the meaning
of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any
potential liability therefor, or the receipt by Company or any of its ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization
or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Company or any of its ERISA Affiliates of fines, penalties, taxes or related
charges under Chapter 43 of the Internal Revenue Code or under Section 409 or
502(c), (i) or (l) or 4071 of ERISA in respect of any Employee Benefit Plan;
(ix) the assertion of a material claim (other than routine claims for benefits)
against any Employee Benefit Plan other than a Multiemployer Plan or the assets
thereof, or against Company or any of its ERISA Affiliates in connection with
any such Employee Benefit Plan; (x) receipt from the Internal Revenue Service
of notice of the failure of any Pension Plan (or any other Employee Benefit
Plan intended to be qualified under Section 401(a) of the Internal Revenue
Code) to qualify under Section 401(a) of the Internal Revenue Code, or the
failure of
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any trust forming part of any Pension Plan to qualify for exemption from
taxation under Section 501(a) of the Internal Revenue Code; or (xi) the
imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in
Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXCHANGE NOTE INDENTURE" means the senior indenture, if any,
executed by Company and a trustee named thereunder pursuant to which the
Exchange Notes are issued, in the form of Exhibit V to the Bridge Note
Agreement, as such indenture may be amended from time to time to the extent
permitted under subsection 7.15.
"EXCHANGE NOTES" means the senior secured notes, if any,
issued by Company from time to time in exchange for the Conversion Notes
pursuant to the Exchange Note Indenture in the same principal amount as the
Conversion Notes being so exchanged, in the form of Exhibit A to the Exchange
Note Indenture, which notes shall accrue interest prior to default at a rate no
greater than 18% per annum (of which no greater than 15% per annum may be
payable in cash) plus up to 1.50% per annum payable as additional interest as a
result of any failure to comply with registration requirements with respect to
such notes as required by the customary registration rights accompanying such
notes, in each case as such notes may be amended from time to time to the
extent permitted under subsection 7.15. "EXCHANGE NOTES" shall also refer to
the registered Securities, if any, having the same terms and conditions as the
notes described above which are issued by Company in exchange for such notes
upon exercise of the customary registration rights accompanying such notes.
"EXISTING CREDIT ARRANGEMENTS" means (i) Company's promissory
note dated July 23, 1997, payable to Bank One, Texas, N.A., in the principal
amount of $20,000,000; (ii) Company's promissory note dated December 15, 1993,
payable to NationsBank of Texas, N.A., in the outstanding principal amount of
$350,000; (iii) a Loan Agreement dated as of October 1, 1996 between Company
and Bank One, Texas, N.A., providing for borrowings of up to $5,200,000 under
which there is approximately $1,800,000 principal amount outstanding; and (iv)
a Loan Agreement dated as of April 25, 1997 between Company and Bank One,
Texas, N.A., providing for borrowings of up to $2,200,000 under which there are
no outstandings.
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"EXISTING SHAREHOLDERS" means ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇.
"FACILITIES" means all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon) and
related facilities now, hereafter or heretofore owned, leased, operated or used
by Company or any of its Subsidiaries or any of their respective predecessors
or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by Agent from three Federal funds
brokers of recognized standing selected by Agent.
"FEE PROPERTY" means a Real Property Asset consisting of a fee
interest in real property.
"FINANCIAL PLAN" has the meaning assigned to that term in
subsection 6.1(xiii).
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on April 30 of each calendar year.
"FOREIGN SUBSIDIARY" means a direct or indirect Subsidiary of
Company which is incorporated or organized under the laws of any government or
sovereignty other than any state of the United States of America.
"FUNDING AND PAYMENT OFFICE" means (i) the office of Agent
located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or (ii) such other office
of Agent as may from time to time hereafter be designated as such in a written
notice delivered by Agent to Company and each Lender.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in
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such other statements by such other entity as may be approved by a significant
segment of the accounting profession, in each case as the same are applicable
to the circumstances as of the date of determination.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"GUARANTIES" means the Subsidiary Guaranty.
"GUARANTOR" means, at any time, any of Company's Subsidiaries
that is then a party to any of the Guaranties.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "restricted hazardous waste", "infectious waste", "toxic substances" or
any other formulations intended to define, list or classify substances by
reason of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar meaning and regulatory effect import under any
applicable Environmental Laws; (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (iv) any flammable substances
or explosives; (v) any radioactive materials; (vi) asbestos in any form; (vii)
urea formaldehyde foam insulation; (viii) electrical equipment which contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty parts per million; (ix) pesticides; and (x) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
any governmental authority or which may or could pose a hazard to the health
and safety of the owners, occupants or any Persons in the vicinity of the
Facilities.
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (iv) any obligation owed for all or any part of the deferred purchase
price of property or services (excluding any such obligations incurred under
ERISA), which purchase price is (a) due more than six months from the date of
incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument, and (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person
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regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person. Obligations
under Interest Rate Agreements and Currency Agreements constitute Contingent
Obligations and not Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in
subsection 10.3.
"INSOLVENCY EVENT" means, with respect to any Person, the
occurrence of any of the events described in subsection 8.6 or 8.7; provided
that, solely for purposes of this definition, any references to Company or any
of its Subsidiaries in subsection 8.6 or 8.7 shall be deemed to be a reference
to such Person.
"INSOLVENCY LAWS" means the Bankruptcy Code or any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect in
the United States of America or any state thereof.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of Company and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise), business
or operations of Company and its Subsidiaries, taken as a whole.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement
among Company, BTCC, as Agent under this Agreement, BTCo as Agent under the
Bridge Note Agreement, and BTCo, as Collateral Agent under the Intercreditor
Agreement.
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, the first Business Day of each calendar month, commencing on the
first such date to occur after the Closing Date, and (ii) with respect to any
Eurodollar Rate Loan, the last day of each Interest Period applicable to such
Loan; provided that in the case of each Interest Period of six months "Interest
Payment Date" shall also include the date that is three months after the
commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
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"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
"INVENTORY" means, with respect to any Person, all goods,
merchandise and other personal property which are held by such Person for sale
or lease, including those held for display or demonstration and including
work-in- progress.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (other than a Person that prior
to such purchase or acquisition was a wholly-owned Subsidiary of Company and a
party to the Subsidiary Guaranty), (ii) any direct or indirect redemption,
retirement, purchase or other acquisition for value, by any Subsidiary of
Company from any Person other than Company or any of its Subsidiaries, of any
equity Securities of such Subsidiary, or (iii) any direct or indirect loan,
advance (other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course of
business) or capital contribution by Company or any of its Subsidiaries to any
other Person other than a wholly-owned Subsidiary of Company which is a party
to the Subsidiary Guaranty, including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from sales
to that other Person in the ordinary course of business. The amount of any
Investment shall be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment.
"IP COLLATERAL" means, collectively, the Collateral under the
IP Collateral Documents.
"IP COLLATERAL DOCUMENTS" means, collectively, the Company
Trademark Security Agreement, the Company Patent Security Agreement, the
Subsidiary Trademark Security Agreements and the Subsidiary Patent Security
Agreements.
"ISSUING LENDER" means, with respect to any Letter of Credit,
BTCo or any other Lender which agrees or is otherwise obligated to issue such
Letter of Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
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"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 10.1, and the
term "Lenders" shall include BTCo as an Issuing Lender unless the context
otherwise requires; provided that the term "Lenders", when used in the context
of a particular Commitment, shall mean Lenders having that Commitment.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Standby
Letters of Credit issued or to be issued by Issuing Lenders for the account of
Company pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under Letters
of Credit honored by Issuing Lenders and not theretofore reimbursed by Company.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of the Revolving Loans.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters
of Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of an Issuing Lender
relating to, the Letters of Credit), the Guaranties, the Intercreditor
Agreement and the Collateral Documents and, solely for purposes of the use of
the term "Loan Documents" in the definition of Obligations, the Currency
Agreements to which any Lender or any of its Affiliates is a party.
"LOAN PARTIES" means any of the Company or any Subsidiary of
the Company executing the Subsidiary Guaranty.
"LOCK BOX" means a lockbox maintained by any Loan Party
pursuant to arrangements satisfactory to Agent.
"LOCK BOX ACCOUNT" means a Deposit Account under the exclusive
dominion and control of Agent that is maintained by any Loan Party with a Lock
Box Bank pursuant to a Lock Box Agreement.
"LOCK BOX AGREEMENT" means a Lock Box Agreement executed and
delivered by a Lock Box Bank, Agent and the applicable Loan Party,
substantially in the form of Exhibit XVI annexed hereto, as such Lock Box
Agreement may be amended,
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supplemented or otherwise modified from time to time, and "LOCK BOX AGREEMENTS"
means all such Lock Box Agreements, collectively.
"LOCK BOX BANK" means any commercial bank satisfactory to
Agent at which any Loan Party maintains a Lock Box Account.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company and its Subsidiaries, taken as a whole, (ii)
the impairment in any material respect of the ability of any Loan Party to
perform, or of Agent or Lenders to enforce, the Obligations, or (iii) a
material adverse effect on the value of the Collateral or the amount which
Agent or Lenders would be likely to receive (after giving consideration to
delays in payment and costs of enforcement) in the liquidation of the
Collateral.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Company or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to renew
could have a Material Adverse Effect.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined
in Section 3(37) of ERISA, to which Company or any of its ERISA Affiliates is
contributing, or ever has contributed, or to which Company or any of its ERISA
Affiliates has, or ever has had, an obligation to contribute.
"NEWCO" means FWT Acquisition, Inc., a Delaware corporation.
"NOTES" means one or more of the Revolving Notes.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Company to Agent pursuant to
subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Company to
Agent pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"REQUEST FOR ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of Exhibit III annexed hereto
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delivered by Company to Agent pursuant to subsection 3.1B(i) with respect to
the proposed issuance of a Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Agent, Lenders or any of them under the
Loan Documents, whether for principal, interest (including interest accruing on
or after the occurrence of an Insolvency Event), reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and by its
chief financial officer, its chief operating officer or controller; provided
that every Officers' Certificate with respect to the compliance with a
condition precedent to the making of any Loans hereunder shall include (i) a
statement that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers, such
condition has been complied with; and provided further that with respect to any
certificate required to be delivered pursuant to subsection 4.1, such
certificate may be executed by any one such officer approved by Agent.
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"OTHER BANK CONCENTRATION ACCOUNT" means an account under the
exclusive dominion and control of Agent that is maintained by any Loan Party
with a Bank (other than BTCo) that is satisfactory to Agent pursuant to a
Blocked Account Agreement into which the applicable Lock Box Banks are
instructed to transfer funds on deposit in the Lock Box Accounts pursuant to
the terms of the Lock Box Agreements.
"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 Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
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"PERMITTED DISCRETION" means Agent's good faith and reasonable
judgment based upon any factor which it believes: (i) will or could adversely
affect the value of any Collateral, the enforceability or priority of Agent's
Liens thereon or the amount which Agent and Lenders would be likely to receive
(after giving consideration to delays in payment and costs of enforcement) in
the liquidation of such Collateral; (ii) suggests that any collateral report or
financial information delivered to Agent by any Person on behalf of any Loan
Party is incomplete, inaccurate or misleading in any material respect; (iii)
materially increases the likelihood of a bankruptcy, reorganization or other
insolvency proceeding involving Company or any of its Subsidiaries or any of
the Collateral; or (iv) creates or reasonably could be expected to create a
Potential Event of Default or Event of Default. In exercising such judgment,
Agent may consider such factors already included in or tested by the definition
of Eligible Accounts Receivable or Eligible Inventory, as well as any of the
following: (i) the financial and business climate of any Loan Party's industry
and general macroeconomic conditions, (ii) changes in collection history and
dilution with respect to Loan Parties' Accounts, (iii) changes in demand for,
and pricing of, Loan Parties' Inventory, (iv) changes in any concentration of
risk with respect to such Accounts or Inventory, and (v) any other factors that
change the credit risk of lending to Company on the security of such Accounts
or Inventory. The burden of establishing lack of good faith shall be on the
Company.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges
or claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have
been made therefor;
(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
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(iv) any attachment or judgment Lien not constituting an
Event of Default under subsection 8.8;
(v) leases or subleases granted to others not interfering
in any material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions,
encroachments, minor defects or irregularities in title, and other
similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of Company or any of
its Subsidiaries;
(vii) any (a) interest or title of a lessor or sublessor
under any lease permitted by subsection 7.9, (b) restriction or
encumbrance that the interest or title of such lessor or sublessor may
be subject to, or (c) subordination of the interest of the lessee or
sublessee under such lease to any restriction or encumbrance referred
to in the preceding clause (b);
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; and
(x) licenses of patents, trademarks and other
intellectual property rights granted by Company or any of its
Subsidiaries in the ordinary course of business and not interfering in
any material respect with the ordinary conduct of the business of
Company or such Subsidiary.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies,
limited liability partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and governments
and agencies and political subdivisions thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"PRIME RATE" means the rate that BTCo announces from time to
time as its prime lending rate in the United States for Dollar denominated
loans, as in effect from time to time. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. BTCC
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or any other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"PRO RATA SHARE" means with respect to all payments,
computations and other matters relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender or any Letters of Credit issued or participations
therein purchased by any Lender, the percentage obtained by dividing (x) the
Revolving Loan Exposure of that Lender by (y) the aggregate Revolving Loan
Exposure of all Lenders, as the applicable percentage may be adjusted by
assignments permitted pursuant to subsection 10.1. The initial Pro Rata Share
of each Lender for purposes of the preceding sentence is set forth opposite the
name of that Lender in Schedule 2.1 annexed hereto.
"PURCHASE PRICE ADJUSTMENT NOTES" means the promissory notes
delivered by Company to the Existing Shareholders pursuant to Section 2.7 of
the Recapitalization Agreement with respect to increases in the purchase price
payable to such Existing Shareholders or pursuant to Article III of the
Recapitalization Agreement with respect to payments to be made as a result of
liabilities under Section 338(h)(10) of the Internal Revenue Code as such notes
may be amended from time to time after their issue date to the extent permitted
under subsection 7.15.
"REAL PROPERTY ASSETS" means all real property from time to
time owned in fee by any Loan Party and all rights, title and interest in and
to any and all leases of real property as to which any Loan Party has a
leasehold interest, including without limitation any such fee or leasehold
interests acquired by any Loan Party after the date hereof.
"RECAPITALIZATION" means the transactions contemplated by the
Recapitalization Agreement.
"RECAPITALIZATION AGREEMENT" means that certain
Recapitalization Agreement dated as of November 12, 1997, by and among Company,
Newco and the Existing Shareholders, in the form delivered to Agent and Lenders
prior to their execution of this Agreement and as such agreement may be amended
from time to time thereafter to the extent permitted under subsection 7.15.
"REGISTER" has the meaning assigned to that term in subsection
2.1E.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
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"RELATED AGREEMENTS" means, collectively, the Recapitalization
Agreement, Stockholders Agreement, the Bridge Note Agreement, the Bridge Notes,
any guaranties relating thereto and, if and when executed, the Exchange Note
Indenture, the Takeout Securities Indenture, the Conversion Notes, the Exchange
Notes, the Takeout Securities and any guaranties relating to any of the
foregoing, and the Purchase Price Adjustment Notes, and all other agreements or
instruments delivered pursuant to or in connection with any of the foregoing
including any purchase agreement or registration rights agreement.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, the abandonment or disposal
of any barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"REQUIREMENT OF LAW" means (a) the certificates or articles of
incorporation, by-laws and other organizational or governing documents of a
Person, (b) any law, treaty, rule, regulation or determination of an
arbitrator, court or other governmental authority, or (c) any franchise,
license, lease, permit, certificate, authorization, qualification, easement,
right of way, right or approval binding on a Person or any of its property.
"REQUISITE LENDERS" means Lenders having or holding 51% or
more of the sum of the aggregate Revolving Loan Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Company now or hereafter outstanding, except a dividend payable solely
in shares of that class of stock to the holders of that class, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of Company now or hereafter outstanding, (iii) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of stock of Company now or hereafter
outstanding, and (iv) any payment or prepayment of principal of, premium, if
any, or interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with respect
to, any Subordinated Indebtedness.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender
to make Revolving Loans to Company pursuant to subsection
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2.1A, and "REVOLVING LOAN COMMITMENTS" means such commitments of all Lenders in
the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means November
30, 2000.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) in
the event that Lender is an Issuing Lender, the aggregate Letter of Credit
Usage in respect of all Letters of Credit issued by that Lender (in each case
net of any participations purchased by other Lenders in such Letters of Credit
or any unreimbursed drawings thereunder) plus (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit.
"REVOLVING LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A.
"REVOLVING NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1F on the Closing Date and (ii) any promissory
notes issued by Company pursuant to the last sentence of subsection 10.1B(i) in
connection with assignments of the Revolving Loan Commitments and Revolving
Loans of any Lenders, in each case substantially in the form of Exhibit IV
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (A) (i) the then fair saleable value of the property
of such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then
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existing debts as they become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to such Person;
(ii) such Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction; and (iii) such Person
does not intend to incur, or believe (nor should it reasonably believe) that it
will incur, debts beyond its ability to pay such debts as they become due; and
(B) such Person is "solvent" within the meaning given that term and similar
terms under applicable laws relating to fraudulent transfers and conveyances.
For purposes of this definition, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"STANDBY LETTER OF CREDIT" means any standby letter of credit
or similar instrument issued for the purpose of supporting (i) Indebtedness of
Company or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Subsidiaries, (iii) the obligations of third party
insurers of Company or any of its Subsidiaries arising by virtue of the laws of
any jurisdiction requiring third party insurers, (iv) obligations with respect
to Capital Leases or Operating Leases of Company or any of its Subsidiaries,
and (v) performance, payment, deposit or surety obligations of Company or any
of its Subsidiaries, in any case if required by law or governmental rule or
regulation or in accordance with custom and practice in the industry; provided
that Standby Letters of Credit may not be issued for the purpose of supporting
(a) trade payables or (b) any Indebtedness constituting "antecedent debt" (as
that term is used in Section 547 of the Bankruptcy Code).
"STOCKHOLDERS AGREEMENT" means that certain Stockholders
Agreement dated as of the Closing Date entered into by and among ▇▇▇▇▇, the
Existing Shareholders and the other individuals parties thereto, as such
agreement may be amended, supplemented or otherwise modified from time to time
to the extent permitted under subsection 7.15.
"SUBORDINATED INDEBTEDNESS" means (i) the Indebtedness of
Company evidenced by the Takeout Securities if the Takeout Securities are
subordinated to the Credit Agreement, and (ii) any other Indebtedness of
Company (other than Indebtedness to any of its Subsidiaries) that is
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
satisfactory to Agent and Requisite Lenders.
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"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed
and delivered by Company's Subsidiaries on the Closing Date and to be executed
and delivered by Company's Subsidiaries from time to time thereafter in
accordance with subsection 6.10, substantially in the form of Exhibit XXI
annexed hereto, as such Subsidiary Guaranty may be amended, supplemented or
otherwise modified from time to time.
"SUBSIDIARY PATENT SECURITY AGREEMENT" means each Subsidiary
Patent Collateral Security Agreement and Conditional Assignment executed and
delivered by Company's Subsidiaries on the Closing Date or to be executed and
delivered by Company's Subsidiaries from time to time thereafter in accordance
with subsection 6.10, in each case substantially in the form of Exhibit XXV
annexed hereto, as such Subsidiary Patent Collateral Security Agreement and
Conditional Assignment may be amended, supplemented or otherwise modified from
time to time, and "SUBSIDIARY PATENT SECURITY AGREEMENTS" means all such
Subsidiary Patent Collateral Security Agreement and Conditional Assignments,
collectively.
"SUBSIDIARY PLEDGE AGREEMENT" means each Subsidiary Pledge
Agreement executed and delivered by Company's Subsidiaries on the Closing Date
or to be executed and delivered by Company's Subsidiaries from time to time
thereafter in accordance with subsection 6.10, in each case substantially in
the form of Exhibit XXIII annexed hereto, as such Subsidiary Pledge Agreement
may be amended, supplemented or otherwise modified from time to time, and
"SUBSIDIARY PLEDGE AGREEMENTS" means all such Subsidiary Pledge Agreements,
collectively.
"SUBSIDIARY SECURITY AGREEMENT" means each Subsidiary Security
Agreement executed and delivered by Company's Subsidiaries on the Closing Date
or to be executed and delivered by Company's Subsidiaries from time to time
thereafter in accordance with subsection 6.10, in each case substantially in
the form of Exhibit XXII annexed hereto, as such Subsidiary Security Agreement
may be amended, supplemented or otherwise modified from time to time, and
"SUBSIDIARY SECURITY AGREEMENTS" means all such Subsidiary Security Agreements,
collectively.
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"SUBSIDIARY TRADEMARK SECURITY AGREEMENT" means each
Subsidiary Trademark Collateral Security Agreement and Conditional Assignment
executed and delivered by Company's Subsidiaries on the Closing Date or to be
executed and delivered by Company's Subsidiaries from time to time thereafter
in accordance with subsection 6.10, in each case substantially in the form of
Exhibit XXIV annexed hereto, as such Subsidiary Trademark Collateral Security
Agreement and Conditional Assignment may be amended, supplemented or otherwise
modified from time to time, and "SUBSIDIARY TRADEMARK SECURITY AGREEMENTS"
means all such Subsidiary Trademark Collateral Security Agreement and
Conditional Assignments, collectively.
"TAKEOUT SECURITIES" means either (a) the senior subordinated
unsecured notes, if any, issued by Company pursuant to the Takeout Securities
Indenture, having the terms and conditions substantially as described in the
"Description of Notes" section of that certain Preliminary Offering Memorandum
of Company dated October 31, 1997, or (b) any other securities issued by the
Company to refinance the Bridge Notes, the Conversion Notes or the Exchange
Notes, which Takeout Securities shall, in each case, be in form and substance
satisfactory to Agent and Requisite Lenders, as such Takeout Securities may be
amended from time to time to the extent permitted under subsection 7.15, in
each case all of the proceeds of which are used to refinance all or a part of
the outstanding obligations under the Bridge Notes, the Conversion Notes or the
Exchange Notes; provided that (i) no principal amount of such notes shall have
a scheduled maturity date prior to the tenth anniversary of the Closing Date
and (ii) such notes shall not have an effective yield (without giving effect to
default interest rates or to any other Securities issued by Company to the
holders of such notes concurrently with the issuance of such notes) in excess
of 15% per annum plus up to 1.50% per annum payable as additional interest as a
result of any failure to comply with registration requirements with respect to
such notes as required by the customary registration rights accompanying such
notes. "TAKEOUT SECURITIES" shall also refer to the registered Securities, if
any, having the same terms and conditions as the notes described above which
are issued by Company in exchange for such notes upon exercise of the customary
registration rights accompanying such notes.
"TAKEOUT SECURITIES INDENTURE" means the indenture, if any,
executed by Company and a trustee named therein pursuant to which the Takeout
Securities are issued, (a) having the terms and conditions substantially as
described in the "Description of Notes" section of that certain Preliminary
Offering Memorandum of Company dated October 31, 1997, or (b) having such other
terms and conditions describing the securities issued by the Company to
refinance the Bridge Notes, the Conversion Notes or the Exchange Notes, which
indenture shall be, in each case, in form and
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substance satisfactory to Agent, as such indenture may be amended from time to
time to the extent permitted under subsection 7.15.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided that "TAX ON THE OVERALL NET INCOME" of a Person
shall be construed as a reference to a tax imposed by the jurisdiction in which
that Person's principal office (and/or, in the case of a Lender, its lending
office) is located or in which that Person is deemed to be doing business on
all or part of the net income, profits or gains of that Person (whether
worldwide, or only insofar as such income, profits or gains are considered to
arise in or to relate to a particular jurisdiction, or otherwise).
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at
any date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans made to Company plus (ii) the Letter of Credit
Usage with respect to all Letters of Credit issued for the account of Company.
"TRANSACTION COSTS" means the fees, costs and expenses payable
by any Loan Party on or before the Closing Date in connection with the
transactions contemplated hereby or by the Recapitalization Agreement.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
1.3 OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in subsection 1.1 may, unless
the context otherwise requires, be used in the singular or the plural,
depending on the reference. An Event of Default shall "continue" or be
"continuing" until
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such Event of Default has been waived in accordance with subsection 10.6
hereof.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Company
herein set forth, each Lender hereby severally agrees, subject to the
limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding from time to time, to lend to Company from
time to time during the period from the Closing Date to but excluding the
Revolving Loan Commitment Termination Date an aggregate amount not exceeding
its Pro Rata Share of the aggregate amount of the Revolving Loan Commitments to
be used for the purposes identified in subsection 2.5. The original amount of
each Lender's Revolving Loan Commitment is set forth opposite its name on
Schedule 2.1 annexed hereto and the aggregate original amount of the Revolving
Loan Commitments is $25,000,000; provided that the Revolving Loan Commitments
of Lenders shall be adjusted to give effect to any assignments of the Revolving
Loan Commitments pursuant to subsection 10.1B. Each Lender's Revolving Loan
Commitment shall expire on the Revolving Loan Commitment Termination Date and
all Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Loan Commitments shall be paid in full no
later than that date. Amounts borrowed under this subsection 2.1A may be
repaid and reborrowed to, but excluding the Revolving Loan Commitment
Termination Date, at any time and from time to time without premium or penalty
except as provided in subsection 2.6D.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan
Commitments shall be subject to the following limitations in the
amounts indicated:
(a) in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect; and
(b) in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Borrowing
Base then in effect.
B. BORROWING MECHANICS. Revolving Loans made on any Funding Date
as Base Rate Loans shall not be subject to any minimum amounts. Revolving
Loans made on any Funding Date as Eurodollar Rate Loans shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in
excess of that amount. Whenever Company desires that Lenders make Revolving
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Loans it shall deliver to Agent a Notice of Borrowing no later than 1:00 P.M.
(New York time) at least three Business Days in advance of the proposed Funding
Date (in the case of a Eurodollar Rate Loan) or no later than 1:00 P.M. (New
York time) on the proposed Funding Date (in the case of a Base Rate Loan). The
Notice of Borrowing shall specify (i) the proposed Funding Date (which shall be
a Business Day), (ii) the amount and type of Loans requested, (iii) in the case
of Loans made on the Closing Date, that such Loans shall be Base Rate Loans,
(iv) in the case of Revolving Loans not made on the Closing Date, whether such
Loans shall be Base Rate Loans or Eurodollar Rate Loans, (v) in the case of any
Loans requested to be made as Eurodollar Rate Loans, the initial Interest
Period requested therefor and (vi) in the case of Revolving Loans, that, after
giving effect to the requested Loans, the Total Utilization of Revolving Loan
Commitments will not exceed the Revolving Loan Commitments and the Borrowing
Base then in effect. Revolving Loans may be continued as or converted into
Base Rate Loans and Eurodollar Rate Loans in the manner provided in subsection
2.2D. In lieu of delivering the above-described Notice of Borrowing, Company
may give Agent telephonic notice by the required time of any proposed borrowing
under this subsection 2.1B; provided that such notice shall be promptly
confirmed in writing by delivery of a Notice of Borrowing to Agent on or before
the applicable Funding Date.
Neither Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized to borrow on behalf of Company or for otherwise acting in
good faith under this subsection 2.1B, and upon funding of Loans by Daily
Funding Lender and/or Lenders in accordance with this Agreement pursuant to any
such telephonic notice Company shall have effected Loans hereunder.
The Company shall notify Agent prior to the funding of any
Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds
of any Loans shall constitute a re-certification by Company, as of the
applicable Funding Date, as to the matters to which Company is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in
lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and the Company shall be bound to either (i) make a
borrowing in accordance therewith or (ii) pay all amounts due under subsection
2.6D.
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C. DISBURSEMENT OF FUNDS.
(i) Subject to this subsection 2.1C and subsection 2.1D,
all Loans under this Agreement shall be made by Lenders simultaneously
and proportionately to their respective Pro Rata Shares, it being
understood that no Lender shall be responsible for any default by any
other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender to make the
particular type of Loan requested be increased or decreased as a
result of a default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder.
(ii) Upon receipt by Agent of a Notice of Borrowing
pursuant to subsection 2.1B (or telephonic notice in lieu thereof) for
Revolving Loans that consist of Base Rate Loans and upon satisfaction
or waiver of the conditions precedent specified in subsection 4.1 (in
the case of Loans made on the Closing Date) and, subject to the
provisions set forth in the immediately succeeding paragraph,
subsection 4.2 (in the case of all Loans), Daily Funding Lender shall,
without prior notice to the other Lenders, make such Revolving Loans
for its own account on the applicable Funding Date (subject to
settlement with the other Lenders in accordance with subsection 2.1D)
by making the proceeds of such Revolving Loans available to the
Company on such Funding Date by causing an amount of same day funds
equal to the proceeds of such Revolving Loans to be credited to the
account of Company at the Funding and Payment Office. Such Revolving
Loans shall constitute Revolving Loans by Daily Funding Lender for all
purposes under the Loan Documents, subject to settlement with the
other Lenders pursuant to subsection 2.1D. All interest accrued on
any such Revolving Loans from the date made by Daily Funding Lender to
the Settlement Date with respect thereto shall be for Daily Funding
Lender's own account. Daily Funding Lender shall make Revolving Loans
for its own account pursuant to this subsection 2.1C(ii)
notwithstanding the fact that the principal amount of such Revolving
Loans, when added to the aggregate principal amount of Daily Funding
Lender's Revolving Loans then outstanding, may exceed Daily Funding
Lender's Revolving Loan Commitment then in effect; provided that such
Revolving Loans shall at all times be Obligations owed to Daily
Funding Lender under this Agreement; and provided, further that in no
event shall the aggregate principal amount of all Revolving Loans,
including such Revolving Loans, outstanding at any time exceed the
aggregate Revolving Loan Commitments then in effect minus the Letter
of Credit Usage as of such time.
Notwithstanding anything in this Agreement to the
contrary, if the conditions precedent specified in
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subsection 4.2 cannot be fulfilled with respect to any proposed
Revolving Loans that consist of Base Rate Loans, the Company shall, in
its Notice of Borrowing or otherwise, give immediate written notice
thereof (specifying the circumstances which prevent the conditions
precedent from being fulfilled) to Agent, with a copy to each Lender,
and Daily Funding Lender may (and each Lender hereby authorizes Daily
Funding Lender to), but is not obligated to, continue to make
Revolving Loans that are Base Rate Loans for 20 Business Days from the
date Agent first receives such notice, or until sooner instructed by
Requisite Lenders to cease making such Revolving Loans (the "DAILY
FUNDING LENDER DISCRETIONARY PERIOD"). Once notice is given by the
Company that circumstances exist which prevent the conditions
precedent to borrowing from being fulfilled, no additional notice with
respect to the same circumstances will be effective to commence a new
Daily Funding Lender Discretionary Period.
(iii) Promptly after receipt by Agent of a Notice of
Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu
thereof) for any Loans (other than for Revolving Loans that consist of
Base Rate Loans), Agent shall notify each Lender of the proposed
borrowing. Each Lender shall make the amount of its Loan available to
Agent, in same day funds in Dollars, at the Funding and Payment
Office, not later than 1:00 P.M. (New York time) on the applicable
Funding Date. Except as provided in subsection 3.3B with respect to
Revolving Loans used to reimburse any Issuing Lender for the amount of
a drawing under a Letter of Credit issued by it, upon satisfaction or
waiver of the conditions precedent specified in subsections 4.1 (in
the case of Loans made on the Closing Date) and, subject to the
provisions set forth in the immediately preceding paragraph, 4.2 (in
the case of all Loans), Agent shall make the proceeds of such Loans
available to the Company on the applicable Funding Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such
Loans received by Agent, from Lenders to be credited to the account of
the Company at the Funding and Payment Office.
Unless Agent shall have been notified by any Lender prior to
the Funding Date for any Loans pursuant to this subsection 2.1C(ii)
that such Lender does not intend to make available to Agent the amount
of such Lender's Loan requested on such Funding Date, Agent may assume
that such Lender has made such amount available to Agent on such
Funding Date and Agent may, in its sole discretion, but shall not be
obligated to, make available to the Company a corresponding amount on
such Funding Date. If such corresponding amount is not in fact made
available to Agent by such Lender, Agent shall be entitled to recover
such corresponding amount on demand from such Lender together
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with interest thereon, for each day from such Funding Date until the
date such amount is paid to Agent, at the customary rate set by Agent
for the correction of errors among banks for three Business Days and
thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Agent's demand therefor, Agent
shall promptly notify the Company and the Company shall immediately
pay such corresponding amount to Agent together with interest thereon,
for each day from such Funding Date until the date such amount is paid
to Agent, at the rate payable under this Agreement for Base Rate
Loans. Nothing in this subsection 2.1C shall be deemed to relieve any
Lender from its obligation to fulfill its Commitments hereunder or to
prejudice any rights that Company may have against any Lender as a
result of any default by such Lender hereunder.
D. SETTLEMENT PROCEDURES.
(i) Daily Funding Lender will from time to time notify
the other Lenders, not later than 12:00 Noon (New York time) (a) on at
least one Business Day during each seven calendar-day period, (b) on
each date on which payment of interest on any Revolving Loans is
required to be made pursuant to subsection 2.2C, (c) on the Revolving
Loan Commitment Termination Date, and (d) at such other times as Daily
Funding Lender in its discretion may determine (each such notice by
Daily Funding Lender being a "SETTLEMENT NOTICE" and the date of each
Settlement Notice being a "SETTLEMENT DATE") of the aggregate
principal amount of outstanding Revolving Loans made by Daily Funding
Lender and each other Lender as of the close of business on the
Business Day immediately preceding the applicable Settlement Date.
(ii) If a Settlement Notice indicates that the aggregate
principal amount of outstanding Revolving Loans made by Daily Funding
Lender (including Revolving Loans made for its own account pursuant to
subsection 2.1C(ii)) is in excess of Daily Funding Lender's Pro Rata
Share of the aggregate principal amount of outstanding Revolving Loans
made by all Lenders (the amount of such excess being the "EXCESS
FUNDED AMOUNT"), each other Lender will, not later than 1:00 P.M. (New
York time) on the applicable Settlement Date, pay to Daily Funding
Lender, by depositing same day funds in the account specified by Daily
Funding Lender at the Funding and Payment Office, an amount equal to
such Lender's Adjusted Pro Rata Share of the Excess Funded Amount,
upon which payment Daily Funding Lender shall be deemed to have sold,
and such Lender shall be deemed to have purchased, as of the
applicable Settlement Date, a portion of the outstanding Revolving
Loans made by Daily Funding Lender for its own account pursuant to
subsection 2.1C(ii) on or after the immediately preceding Settlement
Date equal
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to such Lender's Adjusted Pro Rata Share of the Excess Funded Amount.
The obligation of each Lender to purchase a portion of any Revolving
Loan made by Daily Funding Lender as provided in this subsection
2.1D(ii) is subject to the condition that at the time such Revolving
Loan was made by Daily Funding Lender (a) the duly authorized officer
of Daily Funding Lender responsible for the administration of Daily
Funding Lender's credit relationship with Company believed in good
faith that either (X) no Event of Default had occurred and was
continuing or (Y) any Event of Default that had occurred and was
continuing had been waived by Requisite Lenders at the time such
Revolving Loan was made or (b) a Daily Funding Lender Discretionary
Period was in effect.
(iii) If a Settlement Notice indicates that the aggregate
principal amount of outstanding Revolving Loans made by Daily Funding
Lender is less than Daily Funding Lender's Pro Rata Share of the
aggregate principal amount of outstanding Revolving Loans made by all
Lenders (the amount of such difference being the "EXCESS PAYDOWN
AMOUNT"), Daily Funding Lender will, no later than 1:00 P.M. (New York
time) on the applicable Settlement Date, unconditionally pay to each
other Lender, by depositing same day funds in the account specified by
such Lender to Daily Funding Lender, an amount equal to such Lender's
Adjusted Pro Rata Share of the Excess Paydown Amount, upon which
payment such Lender shall be deemed to have sold, and Daily Funding
Lender shall be deemed to have purchased, as of the applicable
Settlement Date, a portion of the outstanding Revolving Loans of such
Lender equal to such Lender's Adjusted Pro Rata Share of the Excess
Paydown Amount.
(iv) Except as provided in subsection 2.1D(ii), the
obligations of Daily Funding Lender and each other Lender pursuant to
subsections 2.1D(ii) and 2.1D(iii) shall be absolute and unconditional
and shall not be affected by any circumstance, including, without
limitation, (a) any set-off, counterclaim, recoupment, defense or
other right which Agent or any Lender may have against Agent, any
other Lender, any Loan Party or any other Person for any reason
whatsoever; (b) the occurrence or continuance of an Event of Default
or a Potential Event of Default; (c) any adverse change in the
condition (financial or otherwise) of any Loan Party; (d) any breach
of this Agreement by Company, Agent or any Lender; or (e) any other
circumstance, happening, or event whatsoever, whether or not similar
to any of the foregoing. In the event that any Person (the "PAYOR")
obligated to make a payment to any other Person (the "PAYEE") pursuant
to this subsection 2.1D fails to make available to the Payee the
amount of such payment required to be made by the Payor, the Payee
shall be entitled to recover such amount on demand from the Payor
together with
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interest at the customary rate set by BTCC for the correction of
errors among Lenders for three Business Days and thereafter at the sum
of the Base Rate plus 1.50% per annum.
(v) In the event that all or any portion of any repayment
of principal of the Revolving Loans is thereafter recovered by or on
behalf of Company from Daily Funding Lender (including any such
recovery in a proceeding under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect) in an amount that is
proportionately greater (based on the respective Pro Rata Shares of
Lenders) than any such recovery from the other Lenders, the loss of
the amount so recovered shall be ratably shared among all Lenders in
the manner contemplated by subsection 10.5.
E. THE REGISTER.
(i) Agent shall maintain, at its address referred to in
subsection 10.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from
time to time (the "REGISTER"). The Register shall be available for
inspection by Company or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(ii) Agent shall record in the Register the Revolving Loan
Commitment and Revolving Loans from time to time of each Lender and
each repayment or prepayment in respect of the principal amount of the
Revolving Loans of each Lender. Any such recordation shall be
conclusive and binding on Company and each Lender, absent manifest
error; provided that failure to make any such recordation, or any
error in such recordation, shall not affect Company's Obligations in
respect of the applicable Loans.
(iii) Each Lender shall record on its internal records
(including, without limitation, the Notes held by such Lender) the
amount of each Loan made by it and each payment in respect thereof.
Any such recordation shall be conclusive and binding on Company,
absent manifest error; provided that failure to make any such
recordation, or any error in such recordation, shall not affect
Company's Obligations in respect of the applicable Loans; and
provided, further that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the Register
shall govern.
(iv) Company, Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or
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transfer of any such Commitment or Loan shall be effective, in each
case unless and until an Assignment Agreement effecting the assignment
or transfer thereof shall have been accepted by Agent and recorded in
the Register as provided in subsection 10.1B(ii). Prior to such
recordation, all amounts owed with respect to the applicable
Commitment or Loan shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Commitments or Loans.
(v) Company hereby designates BTCC to serve as Company's
agent solely for purposes of maintaining the Register as provided in
this subsection 2.1E, and Company hereby agrees that, to the extent
BTCC serves in such capacity, BTCC and its officers, directors,
employees, agents and affiliates shall constitute Indemnitees for all
purposes under subsection 10.3.
F. NOTES. Company shall execute and deliver to each Lender (or
to Agent for that Lender) on the Closing Date a Revolving Note substantially in
the form of Exhibit IV annexed hereto to evidence that Lender's Revolving
Loans, in the principal amount of that Lender's Revolving Loan Commitment and
with other appropriate insertions.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections
2.2G, 2.6 and 2.7, each Loan shall bear interest on the unpaid principal amount
thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to, in the case of Loans, the Base
Rate or the Adjusted Eurodollar Rate. The applicable basis for determining the
rate of interest with respect to any Loan shall be selected by the Company
initially at the time a Notice of Borrowing is given with respect to such Loan
pursuant to subsection 2.1B, and the basis for determining the interest rate
with respect to any Loan may be changed from time to time pursuant to
subsection 2.2D. If on any day a Loan is outstanding with respect to which
notice has not been delivered to Agent in accordance with the terms of this
Agreement specifying the applicable basis for determining the rate of interest,
then for that day that Loan shall bear interest determined by reference to the
Base Rate.
(i) Subject to the provisions of subsections 2.2E and
2.7, the Loans shall bear interest through maturity as follows:
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(a) if a Base Rate Loan, then at the sum of the
Base Rate plus 1.00% per annum; or
(b) if a Eurodollar Rate Loan, then at the sum of
the Adjusted Eurodollar Rate plus 2.25% per annum.
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
(i) the initial Interest Period for any such Loan shall
commence on the Funding Date in respect of such Loan, in the case of a
Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Rate Loan continued as such
pursuant to a Notice of Conversion/Continuation, each successive
Interest Period shall commence on the day on which the next preceding
Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding
Business Day;
(iv) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period shall extend beyond the Revolving
Loan Commitment Termination Date;
(vi) there shall be no more than three Interest Periods
outstanding at any time; and
(vii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan, in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Company shall be
deemed to have selected an Interest Period of one month.
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C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Revolving Loans that are Base Rate
Loans are prepaid pursuant to subsection 2.4A(i), interest accrued on such
Revolving Loans through the date of such prepayment shall be payable on the
next succeeding Interest Payment Date applicable to Base Rate Loans (or, if
earlier, at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Company shall have the option (i) from and after the earlier to
occur of (a) the date which is 90 days after the Closing Date and (b) the date
on which Agent notifies Company that the primary syndication of the Commitments
and the Loans has been completed, to convert at any time all or any part of its
outstanding Revolving Loans equal to $1,000,000 and integral multiples of
$100,000 in excess of that amount from Base Rate Loans to Eurodollar Rate
Loans, or (ii) upon the expiration of any Interest Period applicable to a
Eurodollar Rate Loan, to continue all or any portion of such Loan equal to
$1,000,000 and integral multiples of $100,000 in excess of that amount as a
Eurodollar Rate Loan; or (iii) subject to the payment of all amounts due under
subsection 2.6D, to convert a Eurodollar Rate Loan into a Base Rate Loan at any
time.
The Company shall deliver a Notice of Conversion/ Continuation
to Agent no later than 1:00 P.M. (New York time) of the proposed conversion
date (in the case of a conversion to a Base Rate Loan) or at least three
Business Days in advance of the proposed conversion/continuation date (in the
case of a conversion to, or a continuation of, a Eurodollar Rate Loan. A
Notice of Conversion/Continuation shall specify (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the amount
and type of the Loan to be converted/continued, (iii) the nature of the
proposed conversion/continuation, (iv) in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan, the requested Interest Period, and (v)
in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan,
that no Potential Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above- described Notice of
Conversion/Continuation, the Company may give Agent telephonic notice by the
required time of any proposed conversion/continuation under this subsection
2.2D; provided that such notice shall be promptly confirmed in writing by
delivery of a Notice of Conversion/Continuation to Agent on or before the
proposed conversion/continuation date.
Neither Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by a duly
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authorized officer or other person authorized to act on behalf of Company or
for otherwise acting in good faith under this subsection 2.2D, and upon
conversion or continuation of the applicable basis for determining the interest
rate with respect to any Loans in accordance with this Agreement pursuant to
any such telephonic notice Company shall have effected a conversion or
continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Conversion/Continuation for conversion to, or continuation
of, a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and the
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Loans and, to
the extent permitted by applicable law, any interest payments thereon not paid
when due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post- petition interest in any proceeding
under the Bankruptcy Code or other applicable Insolvency Laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to Base Rate Loans. Payment or
acceptance of the increased rates of interest provided for in this subsection
2.2E is not a permitted alternative to timely payment and shall not constitute
a waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on
any Loan, (i) the date of the making of such Loan or the first day of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan shall be included, and (ii) the
date of payment of such Loan or the expiration date of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted to
a Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such
Eurodollar Rate Loan shall be excluded; provided that if a Loan is repaid on
the same day on which it is made, one day's interest shall be paid on that
Loan.
G. LIMITATION ON INTEREST. It is the intention of the parties
hereto to comply with all applicable usury laws, whether now existing or
hereafter enacted. Accordingly, notwithstanding any provision to the contrary
in this Agreement, the Notes, the other Loan Documents or any other document
evidencing, securing, guaranteeing or otherwise pertaining to the Obligations
of the
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Company to the Lenders, in no contingency or event whatsoever, whether by
acceleration of the maturity of indebtedness of the Company to the Lenders or
otherwise, shall the interest contracted for, charged or received by the
Lenders exceed the maximum amount permissible under applicable law. If from
any circumstances whatsoever fulfillment of any provisions of this Agreement,
the Notes, the other Loan Documents or of any other document evidencing,
securing, guaranteeing or otherwise pertaining to the Obligations of the
Company to the Lenders, at the time performance of such provision shall be due,
shall involve transcending the limit of validity prescribed by law, then, ipso
facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lenders shall ever receive
anything of value as interest or deemed interest by applicable law under this
Agreement, the Notes, the other Loan Documents or any other document
evidencing, securing, guaranteeing or otherwise pertaining to the Obligations
of the Company to the Lenders or otherwise an amount that would exceed the
highest lawful amount (the "Maximum Rate"), such amount that would be excessive
interest shall be applied to the reduction of the principal amount owing in
connection with this Agreement or on account of any other indebtedness of the
Company to the Lenders, and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of principal owing in connection
with this Agreement and such other indebtedness, such excess shall be refunded
to the Company. In determining whether or not the interest paid or payable
with respect to indebtedness of Company to the Lenders, under any specific
contingency, exceeds the maximum nonusurious rate permitted under applicable
law, the Lenders may, at their option, (a) characterize any non- principal
payment as an expense, fee or premium rather than as interest, (b) exclude
voluntary prepayments and the effects thereof, (c) amortize, prorate, allocate
and spread the total amount of interest throughout the full term of such
indebtedness so that the actual rate of interest on account of such
indebtedness does not exceed the maximum amount permitted by applicable law,
and/or (d) allocate interest between portions of the Obligations, to the end
that no such portion shall bear interest at a rate greater than that permitted
by law. Notwithstanding the foregoing, if for any period of time interest on
any Obligations is calculated at the Maximum Rate rather than the applicable
rate under this Agreement, and thereafter such applicable rate becomes less
than the Maximum Rate, the rate of interest payable on such Obligations shall
remain at the Maximum Rate until each Lender shall have received the amount of
interest which such Lender would have received during such period on such
Obligations had the rate of interest not been limited to the Maximum Rate
during such period.
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2.3 FEES.
A. COMMITMENT FEES. Company agrees to pay to Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average
of the daily excess of the Revolving Loan Commitments over the Total
Utilization of Revolving Loan Commitments multiplied by 1/2 of 1% per annum,
such commitment fees to be calculated on the basis of a 360-day year and the
actual number of days elapsed and to be payable quarterly in arrears on March
31, June 30, September 30 and December 31 of each year, commencing on the first
such date to occur after the Closing Date, and on the Revolving Loan Commitment
Termination Date.
B. OTHER FEES. Company agrees to pay to Agent such other fees in
the amounts and at the times separately agreed upon between Company and Agent.
2.4 PREPAYMENTS OF REVOLVING LOANS; GENERAL PROVISIONS REGARDING PAYMENTS;
TERMINATION OF COMMITMENTS.
A. PREPAYMENTS OF REVOLVING LOANS.
(i) Mandatory Prepayments of Revolving Loans.
(a) Prepayments Due to Reductions or Restrictions
of Revolving Loan Commitments or Due to Insufficient Borrowing
Base. Company shall from time to time prepay the Revolving
Loans to the extent necessary so that (1) the Total
Utilization of Revolving Loan Commitments shall not at any
time exceed the Revolving Loan Commitments then in effect and
(2) the Total Utilization of Revolving Loan Commitments shall
not exceed at any time the Borrowing Base then in effect. Any
such mandatory prepayments shall be applied as specified in
subsection 2.4A(ii).
(b) Prepayments of Revolving Loans from Amounts
Transferred to BTCC Account. If any amounts are transferred
to the BTCC Account on any Business Day pursuant to the terms
of any Blocked Account Agreement, if any, then on such
Business Day, if such amounts are transferred to the BTCC
Account prior to 12:00 Noon (New York time) on such Business
Day, or on the next succeeding Business Day, if such amounts
are transferred to the BTCC Account on or after 12:00 Noon
(New York time) on such Business Day, Company shall prepay
Company's Revolving Loans in an amount equal to the amount
transferred to the BTCC Account pursuant to the terms of the
applicable Blocked Account Agreement on such Business Day (to
the extent such amount relates
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to payments received in respect of Accounts of Company or any of its
Subsidiaries) until all of Company's Revolving Loans shall have been
paid in full. Any such mandatory prepayments shall be applied as
specified in subsection 2.4A(ii).
(ii) Application of Prepayments. Any prepayments pursuant
to subsection 2.4A(i) shall be applied as specified by the Company in
the applicable notice of prepayment; provided that in the event
Company fails to specify the Loans to which any such prepayment shall
be applied, such prepayment shall be applied first to Base Rate Loans
to the full extent thereof before application to Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of any
payments required to be made by Company pursuant to subsection 2.6D.
B. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company
of principal, interest, fees and other Obligations hereunder and under
the Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Agent not later than 1:00 P.M. (New York time) on the
date due at the Funding and Payment Office for the account of Lenders.
Funds received by Agent after that time on such due date shall be
deemed to have been paid by the Company on the next succeeding
Business Day. In order to effect timely payment of any interest,
fees, commissions or other amounts due hereunder, Company hereby
authorizes Agent to request Daily Funding Lender to make Revolving
Loans for its own account (subject to settlement pursuant to
subsection 2.1D) in a principal amount equal to such interest, fees,
commissions or other amounts; provided that Agent shall not have the
right to request such Revolving Loans if, after giving effect to such
Revolving Loans, (a) the aggregate outstanding principal amount of
Revolving Loans would exceed the Revolving Loan Commitments then in
effect minus the Letter of Credit Usage, or (b) the Total Utilization
of Revolving Loan Commitments would exceed the Borrowing Base then in
effect. Daily Funding Lender shall make the amount of such Revolving
Loans (which shall be made as Base Rate Loans) available to Agent, in
same day funds, at the Funding and Payment Office, not later than 1:00
P.M. (New York time) on the date requested by Agent, and Company and
Lenders hereby authorize Agent, whether or not the conditions
specified in subsection 4.2 have been satisfied or waived, to apply
the proceeds of such Revolving Loans directly to the payment of such
unpaid interest, fees, commissions or other amounts. Company hereby
agrees that, upon the funding of any such Revolving Loans by Daily
Funding Lender in accordance with the provisions of this subsection
2.4B(i),
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Company shall have effected Revolving Loans hereunder, which Revolving
Loans shall for all purposes of this Agreement be deemed to have been
made by Daily Funding Lender pursuant to and in accordance with the
provisions of subsection 2.1C(ii). Agent shall deliver prompt notice
to Company of the amount of Revolving Loans made pursuant to this
subsection 2.4B together with copies of all invoices or other
statements evidencing the fees, commissions or other amounts due
hereunder (other than interest) paid with the proceeds of such
Revolving Loans; provided that Agent shall give notice to Company five
Business Days in advance of the making of any such Revolving Loans for
the payment of any amounts owed under subsection 10.2 together with
copies of all invoices or other statements evidencing such amounts.
In addition, Company hereby authorizes Agent to charge its accounts
with Agent in order to cause timely payment to be made to Agent of all
principal, interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest.
Except as provided in subsection 2.2C, all payments in respect of the
principal amount of any Loan shall include payment of accrued interest
on the principal amount being repaid or prepaid, and all such payments
(and, in any event, any payments in respect of any Loan on a date when
interest is due and payable with respect to such Loan) shall be
applied to the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments shall be apportioned among all outstanding Loans to
which such payments relate, in each case proportionately to Lenders'
respective Pro Rata Shares of such Loans; provided that (i) payments
of principal in respect of the Revolving Loans pursuant to subsection
2.4A(i)(b) shall be applied to reduce the outstanding Revolving Loans
of Daily Funding Lender (subject to settlement pursuant to subsection
2.1D) prior to application to the outstanding Revolving Loans of any
other Lender and (ii) payments of interest in respect of Revolving
Loans which are Base Rate Loans shall be apportioned ratably among
Lenders in proportion to the average daily amount of such Base Rate
Loans of each Lender outstanding during the period in which such
interest shall have accrued. Agent shall promptly distribute to each
Lender, at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such
Lender may request, its Pro Rata Share of all such payments received
by Agent in respect of Loans and the commitment fees of such Lender
when received by Agent pursuant to subsection 2.3. Notwithstanding
the foregoing provisions of this subsection 2.4B(iii), if, pursuant to
the provisions of subsection
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2.6C, any Notice of Conversion/Continuation is withdrawn as to any
Affected Lender or if any Affected Lender makes Base Rate Loans in
lieu of its Pro Rata Share of any Eurodollar Rate Loans, Agent shall
give effect thereto in apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to
be made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), Lender will make a notation thereon
of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit
or otherwise affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest
on such Note.
C. TERMINATION OF COMMITMENTS. Company may, upon not less than
three Business Days' prior written notice confirmed in writing to Agent (which
original written or telephonic notice Agent will promptly transmit by facsimile
or telephone to each Lender), at any time terminate in whole, without premium
or penalty, the Revolving Loan Commitments; provided that Company upon the
effectiveness of such termination repays in full all outstanding Loans and
fully cash collaterizes all outstanding Letters of Credit or makes such other
arrangements as are satisfactory in form and substance to Agent for the
termination of such Letters of Credit.
2.5 USE OF PROCEEDS.
A. REVOLVING LOANS. The proceeds of any Revolving Loans shall be
applied by Company for working capital and general corporate purposes.
B. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation G, Regulation U, Regulation T or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board or to violate the Exchange Act, in each case as in
effect on the date or dates of such borrowing and such use of proceeds.
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2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 12:00 noon (New York time) on each Interest Rate
Determination Date, Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate
is then being determined for the applicable Interest Period and shall promptly
give notice thereof (in writing or by telephone confirmed in writing) to the
Company and each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that Agent shall have determined (which determination shall be final and
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Agent shall
on such date give notice (by telefacsimile or by telephone confirmed in
writing) to the Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Agent notifies Company and such Lenders that the circumstances giving rise to
such notice no longer exist and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by
Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In
the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not
be unlawful) or (ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after the date of
this Agreement which materially and adversely affect the interbank Eurodollar
market or the position of such Lender in that market, then, and in any such
event, such Lender shall be an "AFFECTED LENDER" and it shall on that day give
notice (by telefacsimile or by telephone confirmed in writing) to Company
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and Agent of such determination (which notice Agent shall promptly transmit to
each other Lender). Thereafter (a) the obligation of the Affected Lender to
make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended
until such notice shall be withdrawn by the Affected Lender, (b) to the extent
such determination by the Affected Lender relates to a Eurodollar Rate Loan
then being requested by Company pursuant to a Notice of Borrowing or a Notice
of Conversion/Continuation, the Affected Lender shall make such Loan as (or
convert such Loan to, as the case may be) a Base Rate Loan (c) the Affected
Lender's obligation to maintain its outstanding Eurodollar Rate Loans (the
"AFFECTED LOANS"), shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation,
Company shall have the option, subject to the provisions of subsection 2.6D, to
rescind such Notice of Borrowing or Notice of Conversion/Continuation as to all
Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of
rescission Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. The Company shall compensate each Lender, upon written request by
that Lender (which request shall set forth the basis for requesting such
amounts), for all reasonable losses, expenses and liabilities (including,
without limitation, any interest paid by that Lender to lenders of funds
borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense
or liability sustained by that Lender in connection with the liquidation or
re-employment of such funds) which that Lender may sustain: (i) if for any
reason (other than a default by that Lender) a borrowing of any Eurodollar Rate
Loan does not occur on a date specified therefor in a Notice of Borrowing or a
telephonic request for borrowing, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment or other principal payment or any conversion of any of
its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by the Company, or
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(iv) as a consequence of any other default by Company in the repayment of its
Eurodollar Rate Loans when required by the terms of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry
or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of
and during the continuation of a Potential Event of Default or an Event of
Default, (i) Company may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest
Period then in effect for that Loan and (ii) subject to the provisions of
subsection 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation
given by Company with respect to a requested borrowing or
conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B, in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after
the date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force
of law):
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(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any franchise Tax levied on
such Lender or any Tax measured with respect to the overall net income
or capital of such Lender ("Excluded Taxes")) with respect to this
Agreement or any of its obligations hereunder or any payments to such
Lender (or its applicable lending office) of principal, interest, fees
or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, or advances or loans
by, or other credit extended by, or any other acquisition of funds by,
any office of such Lender (other than any such reserve or other
requirements with respect to Eurodollar Rate Loans that are reflected
in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable
lending office) or its obligations hereunder or the interbank
Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, Company shall promptly pay to
such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder; provided that a Lender shall not be entitled to avail itself of the
benefit of this subsection 2.7A to the extent that any such increased cost or
reduction in amounts was incurred more than twenty-four months prior to the
time it gives notice to Company (as provided in the next sentence) of the
relevant circumstance, unless such circumstance arose or became applicable
retrospectively, in which case such Lender shall not be limited to such
twenty-four month period so long as such Lender has given such notice to
Company no later than twenty-four months from the time circumstance became
applicable to such Lender. Such Lender shall deliver to the Company (with a
copy to Agent) a written statement, setting forth in reasonable detail the
basis for calculating the additional amounts owed to such Lender under this
subsection 2.7A, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
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B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by
Company under this Agreement and the other Loan Documents shall
(except to the extent required by law) be paid free and clear of, and
without any deduction or withholding on account of, any Tax (other
than Excluded Taxes) imposed, levied, collected, withheld or assessed
by or within the United States of America or any political subdivision
in or of the United States of America or any other jurisdiction from
or to which a payment is made by or on behalf of Company or by any
federation or organization of which the United States of America or
any such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other
Person is required by law to make any deduction or withholding on
account of any such Tax (other than an Excluded Tax) from any sum paid
or payable by Company to Agent or any Lender under any of the Loan
Documents:
(a) Company shall notify Agent of any such
requirement or any change in any such requirement as soon as
Company becomes aware of it;
(b) Company shall pay any such Tax before the
date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on Company) for its
own account or (if that liability is imposed on Agent or such
Lender, as the case may be) on behalf of and in the name of
Agent or such Lender;
(c) the sum payable by Company in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or
payment, Agent or such Lender, as the case may be, receives on
the due date a net sum equal to what it would have received
had no such deduction, withholding or payment been required or
made; and
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or
withholding, and within 30 days after the due date of payment
of any Tax which it is required by clause (b) above to pay,
Company shall deliver to Agent evidence satisfactory to the
other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant taxing
or other authority;
provided that no such additional amount shall be required to be paid
to any Lender under clause (c) above except to the extent that any
change after the date hereof (in the case of
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each Lender listed on the signature pages hereof) or after the date of
the Assignment Agreement pursuant to which such Lender became a Lender
(in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result
in an increase in the rate of such deduction, withholding or payment
from that in effect at the date of this Agreement or at the date of
such Assignment Agreement, as the case may be, in respect of payments
to such Lender.
(iii) Evidence of Exemption from Withholding Taxes.
(a) Each Lender that is organized under the laws
of any jurisdiction other than the United States or any state
or other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "NON-US LENDER") shall deliver to
Agent for transmission to Company, on or prior to the Closing
Date (in the case of each Lender listed on the signature pages
hereof) or on or prior to the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each
other Lender), and at such other times as may be necessary in
the determination of Company or Agent (each in the reasonable
exercise of its discretion), (X) two original copies of
Internal Revenue Service Form 1001 or 4224 (or any successor
forms), properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption
required under the Internal Revenue Code or the regulations
issued thereunder to establish that such Lender is not subject
to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Loan
Documents or (Y) if such Lender is not a "bank" or other
Person described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver either Internal Revenue Service Form
1001 or 4224 pursuant to clause (X) above, a Certificate re
Non-Bank Status together with two original copies of Internal
Revenue Service Form W-8 (or any successor form), properly
completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect
to any payments to such Lender of interest payable under any
of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to
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time after the initial delivery by such Lender of such forms,
certificates or other evidence, whenever a lapse in time or
change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect,
that such Lender shall (1) promptly deliver to Agent for
transmission to Company, two new original copies of Internal
Revenue Service Form 1001 or 4224, or a Certificate re Non-Bank
Status and two original copies of Internal Revenue Service Form
W-8, as the case may be, properly completed and duly executed
by such Lender, together with any other certificate or
statement of exemption required in order to confirm or
establish that such Lender is not subject to deduction or
withholding of United States (as applicable) federal income tax
with respect to payments to such Lender under the Loan
Documents or (2) notify Agent and Company of its inability to
deliver any such forms, certificates or other evidence.
(c) The Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to
satisfy the requirements of clause (a) or (b) of this
subsection 2.7B(iii); provided that if such Lender shall have
satisfied the requirements of subsection 2.7B(iii)(a) on the
Closing Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this subsection 2.7B(iii)(c)
shall relieve the Company of its obligation to pay any
additional amounts pursuant to clause (c) of subsection
2.7B(ii) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or
order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not
subject to withholding as described in subsection
2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision thereof)
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
compliance by any Lender (or its applicable lending office) with any guideline,
request or directive regarding capital adequacy (whether or not having the
force of law) of any such governmental authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
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capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans, Commitments or
Letters of Credit or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit, in the case of any Lender to a
level below that which such Lender or such controlling corporation could have
achieved but for such adoption, effectiveness, phase-in, applicability, change
or compliance (taking into consideration the policies of such Lender or such
controlling corporation with regard to capital adequacy), then from time to
time, within five Business Days after receipt by Company from such Lender of
the statement referred to in the next sentence, Company shall pay to such
Lender such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Agent) a written statement, setting
forth in reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.
Each Lender and Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender or Issuing Lender to receive payments
under subsection 2.7 or subsection 3.6, it will, to the extent not inconsistent
with the internal policies of such Lender or Issuing Lender and any applicable
legal or regulatory restrictions, use reasonable efforts (i) to make, issue,
fund or maintain the Commitments of such Lender or the affected Loans or
Letters of Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, or (ii) take such
other measures as such Lender or Issuing Lender may deem reasonable, if as a
result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender or Issuing Lender pursuant to
subsection 2.7 or subsection 3.6 would be materially reduced and if, as
determined by such Lender or Issuing Lender in its sole discretion, the making,
issuing, funding or maintaining of such Commitments or Loans or Letters of
Credit through such other lending or letter of credit office or in accordance
with such other measures, as the case may be, would not otherwise materially
adversely affect such Commitments or Loans or Letters of Credit or the
interests of such Lender or Issuing Lender; provided that such Lender or
Issuing Lender will not be obligated to utilize such other lending or letter of
credit office pursuant to this subsection 2.8 unless Company agree to pay all
incremental expenses incurred by such Lender or Issuing Lender as
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a result of utilizing such other lending or letter of credit office as
described in clause (i) above. A certificate as to the amount of any such
expenses payable by Company pursuant to this subsection 2.8 (setting forth in
reasonable detail the basis for requesting such amount) submitted by such
Lender or Issuing Lender to Company (with a copy to Agent) shall be conclusive
absent manifest error.
2.9 COLLECTION, DEPOSIT AND TRANSFER OF PAYMENTS IN RESPECT OF ACCOUNTS.
Company shall, and shall cause each of its Subsidiaries to,
maintain in effect at all times a system of accounts and procedures reasonably
satisfactory to Agent for the collection and deposit of payments in respect of
such Person's Accounts and the transfer of amounts so deposited to the
applicable Concentration Account and BTCC Account. Without limiting the
generality of the foregoing:
A. MAINTENANCE OF LOCK BOXES, LOCK BOX ACCOUNTS AND
CONCENTRATION ACCOUNTS.
(i) Except as permitted under subsection 2.9A(ii),
Company shall, and shall cause each of its Subsidiaries to, at all
times maintain any Lock Boxes, Lock Box Accounts and Concentration
Accounts established pursuant to the terms of this Agreement, the Lock
Box Agreements and the Blocked Account Agreements, if any.
(ii) Company shall not, and shall not permit any of its
Subsidiaries to, close any Lock Box Account or Concentration Account
or open a new Lock Box Account or Concentration Account unless it
shall have (a) notified Agent in writing at least 30 days (or such
lesser number of days as may be agreed to by Agent) prior to the
proposed closing or opening, (b) in the case of a new Lock Box
Account, entered into a Lock Box Agreement with the applicable Lock
Box Bank and (c) in the case of a new Other Bank Concentration
Account, entered into a Blocked Account Agreement with the applicable
Concentration Bank.
B. COLLECTION AND DEPOSIT OF PAYMENTS IN RESPECT OF
ACCOUNTS.
(i) Company shall, and shall cause each of its
Subsidiaries to, deliver such notices to account debtors and take all
such other actions as may reasonably be necessary to cause all
payments in respect of such Person's Accounts to be made directly to a
Lock Box.
(ii) Company shall, or shall cause each of its
Subsidiaries to, direct its authorized representative, at least once
on each Business Day, to retrieve all checks and
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other instruments delivered to a Lock Box and, as promptly as possible
on the same Business Day so retrieved, to endorse for payment and
deposit each such check or other instrument in the Lock Box Account
related to such Lock Box. Notwithstanding the foregoing, from and
after such time as Agent shall have notified Company of its election
to exercise its rights under this subsection 2.9B(ii), Company shall
not, and shall not permit its Subsidiaries to, retrieve any items from
any Lock Box unless accompanied by a representative of Agent, and
Company hereby appoint Agent or any of its designees as Company's
attorneys-in-fact with powers, upon notification by Agent as
aforesaid, to (a) access all Lock Boxes and (b) endorse for payment
any checks or other instruments representing payment in respect of any
Accounts of such Persons that are delivered to any Lock Box. All acts
of said attorneys or designees are hereby ratified and approved, and
said attorneys or designees 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 any such acts, omissions, errors or mistakes
constituting gross negligence or wilful misconduct as determined in a
final order by a court of competent jurisdiction). The power of
attorney set forth in this subsection 2.9B(ii) is irrevocable until
all Obligations shall have been paid in full and the Commitments shall
have terminated.
(iii) In the event that Company or any of its Subsidiaries
receives any check, cash, note or other instrument representing
payment of an Account (other than any item delivered to a Lock Box),
Company shall, or shall cause such Subsidiary to, hold such item in
trust for Agent and shall, as soon as practicable (and in any event
within one Business Day) after receipt thereof, cause such item to be
deposited into a Lock Box Account with any necessary endorsements.
(iv) Company hereby agrees, from and after such time, if
any, as Agent shall have notified Company in writing that the
provisions of this subsection 2.9B(iv) are to become effective until
such later time, if any, as Agent shall have notified Company in
writing that such provisions are no longer to be effective, not to
deposit any monies into the Lock Box Accounts or to Concentration
Accounts or to otherwise permit any monies to be deposited into any of
such accounts, except payments received in respect of Company's
Accounts.
C. TRANSFER OF AMOUNTS DEPOSITED IN THE LOCK BOX
ACCOUNTS TO THE CONCENTRATION ACCOUNTS. Company shall cause all amounts
deposited in each Lock Box Account to be transferred on each Business Day to
the applicable Concentration Account in accordance with the terms of the
applicable Lock Box Agreement.
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D. TRANSFER OF AMOUNTS DEPOSITED IN THE CONCENTRATION
ACCOUNTS TO THE BTCC ACCOUNT. Company shall cause all amounts deposited in
each Concentration Account to be transferred on each Business Day to the BTCC
Account. Any amounts so transferred to the BTCC Account first shall be applied
as provided in subsection 2.4A(i)(b) to the extent therein provided and
thereafter, so long as no Event of Default or Potential Event of Default shall
have occurred and be continuing, shall be available for disbursement to the
applicable Loan Parties for working capital and other general corporate
purposes.
E. TREATMENT OF ACCOUNTS. Company shall not, without
Agent's prior written consent, grant any extension of the time of payment of
any Account, compromise or settle any Account for less than the full amount
thereof, release, in whole or in part, any person or property liable for the
payment thereof, or allow any credit or discount whatsoever thereon, except,
when no Event of Default has occurred and is then continuing, in accordance
with its usual and customary business practices.
F. COMPANY TO PROVIDE INFORMATION. Company shall, at
such intervals as Agent may reasonably request, furnish such statements,
schedules and/or information as Agent may request relating to Company's and its
Subsidiaries' Accounts and the collection, deposit and transfer of payments in
respect thereof, including, without limitation, all invoices evidencing such
Accounts.
SECTION 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
THEREIN.
A. LETTERS OF CREDIT. In addition to Company requesting that
Lenders make Revolving Loans pursuant to subsection 2.1A, Company may request,
in accordance with the provisions of this subsection 3.1, from time to time
during the period from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date, that one or more Lenders issue Standby Letters of
Credit for the account of Company for the purposes specified in the definitions
of Standby Letters of Credit. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Company
herein set forth, any one or more Lenders may, but (except as provided in
subsection 3.1B(ii)) shall not be obligated to, issue such Letters of Credit in
accordance with the provisions of this subsection 3.1; provided that neither
Company shall request that any Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan
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Commitments would exceed the Revolving Loan Commitments then in
effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $1,000,000;
(iii) any Letter of Credit for the account of Company if,
after giving effect to such issuance, the Total Utilization of
Revolving Loan Commitments would exceed the Borrowing Base then in
effect;
(iv) any Letter of Credit having an expiration date later
than the earlier of (a) five Business Days prior to the Revolving Loan
Commitment Termination Date and (b) the date which is one year from
the date of issuance of such Letter of Credit; provided that the
immediately preceding clause (b) shall not prevent any Issuing Lender
from agreeing that a Letter of Credit will automatically be extended
for one or more successive periods not to exceed one year each unless
such Issuing Lender elects not to extend for any such additional
period; and provided, further that such Issuing Lender shall elect not
to extend such Letter of Credit if it has knowledge that an Event of
Default has occurred and is continuing (and has not been waived in
accordance with subsection 10.6) at the time such Issuing Lender must
elect whether or not to allow such extension; or
(v) any Letter of Credit denominated in a currency other
than Dollars.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the
issuance of a Letter of Credit, it shall deliver to Agent a Request
for Issuance of Letter of Credit substantially in the form of Exhibit
III annexed hereto no later than 12:00 Noon (New York time) at least
three Business Days, or such shorter period as may be agreed to by the
Issuing Lender in any particular instance, in advance of the proposed
date of issuance. The Request for Issuance of Letter of Credit shall
specify (a) the proposed date of issuance (which shall be a Business
Day), (b) the face amount of the Letter of Credit, (c) the expiration
date of the Letter of Credit, (d) the name and address of the
beneficiary, (e) that, after giving effect to the requested Letter of
Credit, the Total Utilization of Revolving Loan Commitments will not
exceed the Revolving Loan Commitments then in effect and the Total
Utilization of Revolving Loan Commitments will not exceed the
Borrowing Base then in effect and (f) either the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions
thereof, including a precise
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description of any documents to be presented by the beneficiary which,
if presented by the beneficiary prior to the expiration date of the
Letter of Credit, would require the Issuing Lender to make payment
under the Letter of Credit; provided that the Issuing Lender, in its
reasonable discretion, may require changes in the text of the proposed
Letter of Credit or any such documents; and provided, further that no
Letter of Credit shall require payment against a conforming draft to
be made thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such
draft is required to be presented is located) that such draft is
presented if such presentation is made after 10:00 A.M. (in the time
zone of such office of the Issuing Lender) on such business day.
Company shall notify the applicable Issuing Lender (and Agent,
if Agent is not such Issuing Lender) prior to the issuance of any Letter of
Credit in the event that any of the matters to which it is required to certify
in the applicable Request for Issuance of Letter of Credit is no longer true
and correct as of the proposed date of issuance of such Letter of Credit, and
upon the issuance of any Letter of Credit it shall be deemed to have re-
certified, as of the date of such issuance, as to the matters to which it is
required to certify in the applicable Request for Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
Agent of a Request for Issuance of Letter of Credit pursuant to
subsection 3.1B(i) requesting the issuance of a Letter of Credit, in
the event Agent elects to issue such Letter of Credit, Agent shall
promptly so notify the Company, and Agent shall be the Issuing Lender
with respect thereto. In the event that Agent, in its sole
discretion, elects not to issue such Letter of Credit, Agent shall
promptly so notify the Company, whereupon Company may request any
other Lender to issue such Letter of Credit by delivering to such
Lender a copy of the applicable Request for Issuance of Letter of
Credit. Any Lender so requested to issue such Letter of Credit shall
promptly notify Company and Agent whether or not, in its sole
discretion, it has elected to issue such Letter of Credit, and any
such Lender which so elects to issue such Letter of Credit shall be
the Issuing Lender with respect thereto. In the event that all other
Lenders shall have declined to issue such Letter of Credit,
notwithstanding the prior election of Agent not to issue such Letter
of Credit, Agent shall be obligated to issue such Letter of Credit and
shall be the Issuing Lender with respect thereto, notwithstanding the
fact that the Letter of Credit Usage with respect to such Letter of
Credit and with respect to all other Letters of Credit issued by
Agent, when aggregated with Agent's outstanding Revolving Loans, may
exceed Agent's Revolving Loan Commitment then in effect.
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(iii) Issuance of Letter of Credit. Upon satisfaction or
waiver (in accordance with subsection 10.6) of the conditions set
forth in subsection 4.3, the Issuing Lender shall issue the requested
Letter of Credit in accordance with the Issuing Lender's standard
operating procedures.
(iv) Notification to Lenders. Upon the issuance of any
Letter of Credit the applicable Issuing Lender shall promptly notify
Agent and each other Lender of such issuance, which notice shall be
accompanied by a copy of such Letter of Credit. Promptly after
receipt of such notice (or, if Agent is the Issuing Lender, together
with such notice), Agent shall notify each Lender of the amount of
such Lender's respective participation in such Letter of Credit,
determined in accordance with subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of
each calendar quarter ending after the Closing Date, so long as any
Letter of Credit shall have been outstanding during such calendar
quarter, each Issuing Lender shall deliver to each other Lender a
report setting forth for such calendar quarter the daily maximum
amount available to be drawn under the Letters of Credit issued by
such Issuing Lender that were outstanding during such calendar
quarter.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Letter of Credit and drawings thereunder in an
amount equal to such Lender's Pro Rata Share of the maximum amount which is or
at any time may become available to be drawn thereunder.
3.2 LETTER OF CREDIT FEES.
Company agrees to pay the following amounts to each Issuing
Lender with respect to Letters of Credit issued by such Issuing Lender at its
request:
(i) with respect to each Letter of Credit, (a) a fronting
fee equal to the greater of (X) $500 and (Y) 0.25% per annum of the
daily maximum amount available to be drawn under such Letter of Credit
and (b) a letter of credit fee equal to 2.25% per annum multiplied by
the daily maximum amount available to be drawn under such Letter of
Credit, in each case payable in arrears on and to (but excluding) each
March 31, June 30, September 30 and December 31 of each year and
computed on the basis of a 360-day year for the actual number of days
elapsed; and
(ii) with respect to the issuance, amendment or transfer
of each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees
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payable under clause (i) above), documentary and processing charges in
accordance with such Issuing Lender's standard schedule for such
charges in effect at the time of such issuance, amendment, transfer or
payment, as the case may be.
Promptly upon receipt by such Issuing Lender of any amount described in clause
(i)(b) of this subsection 3.2, such Issuing Lender shall distribute to each
other Lender its Pro Rata Share of such amount.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to exercise
reasonable care to determine that the documents required to be delivered under
such Letter of Credit have been delivered and that they comply on their face
with the requirements of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS DRAWN UNDER LETTERS OF
CREDIT. In the event an Issuing Lender has determined to honor a drawing under
a Letter of Credit issued by it, such Issuing Lender shall immediately notify
the Company and Agent, and the Company shall reimburse such Issuing Lender on
or before the Business Day immediately following the date on which such drawing
is honored (the "REIMBURSEMENT DATE") in an amount in Dollars and in same day
funds equal to the amount of such drawing; provided that, anything contained in
this Agreement to the contrary notwithstanding, (i) unless the Company shall
have notified Agent and such Issuing Lender prior to 12:00 Noon (New York time)
on the date such drawing is honored that Company intends to reimburse such
Issuing Lender for the amount of such drawing with funds other than the
proceeds of Revolving Loans, Company shall be deemed to have given a timely
Notice of Borrowing to Agent requesting Lenders to make Revolving Loans that
are Base Rate Loans on the Reimbursement Date in an amount in Dollars equal to
the amount of such drawing and (ii) subject to satisfaction or waiver of the
conditions specified in subsection 4.2B, Lenders shall, on the Reimbursement
Date, make Revolving Loans that are Base Rate Loans in the amount of such
drawing, the proceeds of which shall be applied directly by Agent to reimburse
such Issuing Lender for the amount of such drawing; and provided, further that
if for any reason proceeds of Revolving Loans are not received by such Issuing
Lender on the Reimbursement Date in an amount equal to the amount of such
drawing, Company shall reimburse such Issuing Lender, on demand, in an amount
in same day funds equal to the excess of the amount of such drawing over the
aggregate amount of such Revolving Loans, if any, which are so received.
Nothing in this subsection 3.3B shall be deemed to relieve any Lender from its
obligation to
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make Revolving Loans on the terms and conditions set forth in this Agreement,
and Company shall retain any and all rights it may have against any Lender
resulting from the failure of such Lender to make such Revolving Loans under
this subsection 3.3B.
C. PAYMENT BY LENDERS OF UNREIMBURSED DRAWINGS UNDER LETTERS OF
CREDIT.
(i) Payment by Lenders. In the event that the Company
shall fail for any reason to reimburse any Issuing Lender as provided
in subsection 3.3B in an amount equal to the amount of any drawing
honored by such Issuing Lender under a Letter of Credit issued by it,
such Issuing Lender shall promptly notify each other Lender of the
unreimbursed amount of such drawing and of such other Lender's
respective participation therein based on such Lender's Pro Rata
Share. Each Lender shall make available to such Issuing Lender an
amount equal to its respective participation, in Dollars and in same
day funds, at the office of such Issuing Lender specified in such
notice, not later than 12:00 Noon (New York time) on the first
business day (under the laws of the jurisdiction in which such office
of such Issuing Lender is located) after the date notified by such
Issuing Lender. In the event that any Lender fails to make available
to such Issuing Lender on such business day the amount of such
Lender's participation in such Letter of Credit as provided in this
subsection 3.3C, such Issuing Lender shall be entitled to recover such
amount on demand from such Lender together with interest thereon at
the rate customarily used by such Issuing Lender for the correction of
errors among banks for three Business Days and thereafter at the Base
Rate. Nothing in this subsection 3.3C shall be deemed to prejudice
the right of any Lender to recover from any Issuing Lender any amounts
made available by such Lender to such Issuing Lender pursuant to this
subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by such Issuing Lender in respect of
which payment was made by such Lender constituted gross negligence or
willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received
From Company. In the event any Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or
any portion of any drawing honored by such Issuing Lender under a
Letter of Credit issued by it, such Issuing Lender shall distribute to
each other Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such drawing such other Lender's
Pro Rata Share of all payments subsequently received by such Issuing
Lender from Company in reimbursement of such drawing when such
payments are received. Any such distribution shall be made to a
Lender at its primary address set forth
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below its name on the appropriate signature page hereof or at such
other address as such Lender may request.
D. INTEREST ON AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to
pay to each Issuing Lender, with respect to drawings made under any
Letters of Credit issued by such Issuing Lender at its request,
interest on the amount paid by such Issuing Lender in respect of each
such drawing from the date of such drawing to but excluding the date
such amount is reimbursed by the Company (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B) at a rate equal to (a) for the period from the date
of such drawing to but excluding the Reimbursement Date, the rate then
in effect under this Agreement with respect to Revolving Loans that
are Base Rate Loans and (b) thereafter, a rate which is 2% per annum
in excess of the rate of interest otherwise payable under this
Agreement with respect to Revolving Loans that are Base Rate Loans.
Interest payable pursuant to this subsection 3.3D(i) shall be computed
on the basis of a 360-day year for the actual number of days elapsed
in the period during which it accrues and shall be payable on demand
or, if no demand is made, on the date on which the related drawing
under a Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing under a
Letter of Credit issued by it, (a) such Issuing Lender shall
distribute to each other Lender, out of the interest received by such
Issuing Lender in respect of the period from the date of such drawing
to but excluding the date on which such Issuing Lender is reimbursed
for the amount of such drawing (including any such reimbursement out
of the proceeds of Revolving Loans pursuant to subsection 3.3B), the
amount that such other Lender would have been entitled to receive in
respect of the letter of credit fee that would have been payable in
respect of such Letter of Credit for such period pursuant to
subsection 3.2 if no drawing had been made under such Letter of
Credit, and (b) in the event such Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or
any portion of such drawing, such Issuing Lender shall distribute to
each other Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such drawing such other Lender's
Pro Rata Share of any interest received by such Issuing Lender in
respect of that portion of such drawing so reimbursed by other Lenders
for the period from the date on which such Issuing Lender was so
reimbursed by other Lenders to but excluding the date on which such
portion of such drawing is reimbursed
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by the Company. Any such distribution shall be made to a Lender at
its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Lender may
request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of the Company to reimburse each Issuing Lender
for drawings made under the Letters of Credit issued by it and to repay any
Revolving Loans made by Lenders pursuant to subsection 3.3B and the obligations
of Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of any Letter
of Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), any Issuing Lender or
other Lender or any other Person or, in the case of a Lender, against
Company, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between Company or one of its Subsidiaries and
the beneficiary for which any Letter of Credit was procured);
(iii) any draft or document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by the applicable Issuing Lender under any
Letter of Credit against presentation of a draft or document which
does not comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto;
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential
Event of Default shall have occurred and be continuing;
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provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided
in subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful
misconduct of such Issuing Lender as determined by a final judgment of a court
of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of such Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto government or governmental authority (all such acts or omissions
herein called "GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between Company on the
one hand and any Issuing Lender on the other hand, Company assumes all risks of
the acts and omissions of, or misuse of the Letters of Credit issued by such
Issuing Lender by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, such Issuing Lender shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any such Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) failure of the beneficiary of any
such Letter of Credit to comply fully with any conditions required in order to
draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission
or otherwise of any document required in order to make a drawing
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under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including without
limitation any Governmental Acts, and none of the above shall affect or impair,
or prevent the vesting of, any of such Issuing Lender's rights or powers
hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by any Issuing Lender under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted without gross negligence or willful misconduct,
shall not put such Issuing Lender under any resulting liability to Company.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Company shall retain any and all rights it may have against any
Issuing Lender for any liability arising out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
In the event that any Issuing Lender or Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after
the date hereof, or compliance by any Issuing Lender or Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(i) subjects such Issuing Lender or Lender (or its
applicable lending or letter of credit office) to any additional Tax
(other than any Excluded Tax) with respect to the issuing or
maintaining of any Letters of Credit or the purchasing or maintaining
of any participations therein or any other obligations under this
Section 3, whether directly or by such being imposed on or suffered by
any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit,
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compulsory loan, FDIC insurance or similar requirement in respect of
any Letters of Credit issued by any Issuing Lender or participations
therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter of credit office) regarding this Section
3 or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender
or Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender
or Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received
or receivable hereunder; provided that an Issuing Lender or Lender shall not be
entitled to avail itself of the benefit of this subsection 3.6 to the extent
that any such increased cost or reduction in amounts was incurred more than
twenty-four months prior to the time it gives notice to Company (as provided in
the next sentence) of the relevant circumstances, unless such circumstance
arose or became applicable retrospectively, in which case such Issuing Lender
or Lender shall not be limited to such twenty-four month period so long as such
Issuing Lender or Lender has given such notice to Company no later than
twenty-four months from the time such circumstance became applicable to such
Issuing Lender or Lender. Such Issuing Lender or Lender shall deliver to the
Company a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Issuing Lender or Lender under
this subsection 3.6, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of
Letters of Credit hereunder are subject to the satisfaction of the following
conditions.
4.1 CONDITIONS TO INITIAL REVOLVING LOANS.
The obligations of Lenders to make the initial Revolving Loans
are, in addition to the conditions precedent specified in subsection 4.2,
subject to prior or concurrent satisfaction of the following conditions:
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A. COMPANY DOCUMENTS. On or before the Closing Date, Company
shall deliver or cause to be delivered to Lenders (or to Agent for Lenders with
sufficient originally executed copies, where appropriate, for each Lender and
its counsel) the following, each, unless otherwise noted, dated the Closing
Date:
(i) Certified copies of its Certificate of Incorporation,
together with a good standing certificate from the Secretary of State
of its jurisdiction of incorporation and except where failure to be in
good standing, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect, each other state
in which it is qualified as a foreign corporation to do business and,
to the extent generally available, a certificate or other evidence of
good standing as to payment of any applicable franchise or similar
taxes from the appropriate taxing authority of each of such
jurisdictions, each dated a recent date prior to the Closing Date;
(ii) Copies of its Bylaws, certified as of the Closing
Date by its corporate secretary or an assistant secretary;
(iii) Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement
and the other Loan Documents and Related Agreements to which it is a
party, certified as of the Closing Date by its corporate secretary or
an assistant secretary as being in full force and effect without
modification or amendment;
(iv) Signature and incumbency certificates of its officers
executing this Agreement and the other Loan Documents to which it is a
party;
(v) Executed originals of this Agreement, the Notes (duly
executed in accordance with subsection 2.1F, drawn to the order of
each applicable Lender and with appropriate insertions), the
Intercreditor Agreement and the other Loan Documents to which it is a
party; and
(vi) Such other documents as Agent may reasonably request.
B. USE OF PROCEEDS. On or before the Closing Date, (i) Company
shall have applied cash proceeds of not greater than $78,000,000 from the
Bridge Note issuance to redeem approximately 63% of Company's outstanding
common stock from the Existing Shareholders, (ii) Newco shall have applied cash
proceeds of not less than $36,000,000 in common equity contributions to
purchase approximately 80% of Company's then outstanding common stock from the
Existing Shareholders, and (iii) the Existing Shareholders shall have retained
approximately 20% of Company's outstanding
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common stock, representing a retained investment of not less than $9,000,000.
C. CAPITALIZATION, ETC. The capital and ownership structure of
Company and its Subsidiaries, both before and after giving effect to the
Recapitalization, shall be as set forth on Schedule 4.1C annexed hereto, and
Agent shall have received copies of, and shall be satisfied with the form and
substance of any and all employment contracts with senior management of Company
and its Subsidiaries.
D. BRIDGE NOTES. On or prior to the Closing Date (i) the Bridge
Note Agreement, the Bridge Notes and any guaranties relating thereto shall be
in full force and effect and shall not have been amended, supplemented, waived
or otherwise modified without the consent of Agent, and executed or conformed
copies thereof (including all exhibits and schedules thereto) and any
amendments thereto and all documents executed in connection therewith shall
have been delivered to Agent, (ii) all conditions precedent to the funding of
the loans under the Bridge Note Agreement shall have been satisfied or waived
with the consent of Agent, (iii) Company shall have borrowed under the Bridge
Note Agreement an aggregate principal amount of $100,000,000, and (iv) Company
shall have provided evidence satisfactory to Agent that the proceeds of the
Bridge Notes shall have been applied to the redemption of outstanding shares of
Company's common stock from the Existing Shareholders and to the payment in
full of Company's Existing Credit Arrangements. On or prior to the Closing
Date, BTCo as Agent for the lenders under the Bridge Note Agreement and BTCo as
Collateral Agent shall have executed and delivered the Intercreditor Agreement
to BTCC, as Agent for the lenders under this Agreement.
E. TERMINATION AND REPAYMENT OF EXISTING INDEBTEDNESS. On the
Closing Date, the aggregate amount of outstanding existing Indebtedness of
Company and its Subsidiaries under the Existing Credit Arrangements shall have
repaid in full from the proceeds of the Bridge Notes and Company shall have
terminated any commitments to lend or make other extensions of credit
thereunder and all liens securing any such Indebtedness shall be terminated and
all collateral released. Agent shall have received an Officers' Certificate
of Company stating that after giving effect to the actions described in this
subsection 4.1E, there shall be no Indebtedness of the Loan Parties (other than
Indebtedness under the Loan Documents, the Bridge Note Agreement and the
Purchase Price Adjustment Notes. A certified copy of the Purchase Price
Adjustment Notes shall be delivered to Agent and such Purchase Price Adjustment
Notes shall be satisfactory in form and substance to Agent.
F. NECESSARY CONSENTS. Company shall have obtained all consents
necessary or advisable in connection with the Recapitalization, the
transactions contemplated by the Loan
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Documents and the continued operation of the business conducted by Company and
its Subsidiaries in substantially the same manner as conducted prior to the
consummation of the Recapitalization, and each of the foregoing shall be in
full force and effect, other than those the failure to obtain, which either
individually or in the aggregate, would not be reasonably likely to have a
Material Adverse Effect. All applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose adverse conditions on the
Recapitalization or the financing thereof, and no action, request for stay,
petition for review or rehearing, reconsideration or appeal shall be pending
and any time for agency action to set aside its consent on its own motion has
expired.
G. RECAPITALIZATION.
(i) the aggregate cash consideration paid to the Existing
Shareholders in respect of such holders' equity interests in Company
shall not exceed $114,000,000;
(ii) Transaction Costs shall not exceed $8,000,000 and
Agent shall have received evidence to its satisfaction to such effect;
(iii) the Recapitalization Agreement shall be in full force
and effect and shall not have been amended, supplemented, waived or
otherwise modified without the consent of Agent, and executed or
conformed copies thereof (including all exhibits and schedules
thereto) and any amendments thereto and all documents executed in
connection therewith shall have been delivered to Agent;
(iv) all conditions to the Recapitalization set forth in
the Recapitalization Agreement shall have been satisfied or the
fulfillment of any such conditions shall have been waived with the
consent of Agent;
(v) the Recapitalization shall have become effective in
accordance with the terms of the Recapitalization Agreement; and
(vi) Agent shall have received an Officers' Certificate of
Company to the effect set forth in clauses (i) - (v).
H. FINANCIAL STATEMENTS; PRO FORMA BALANCE SHEET. On or before
the Closing Date, Lenders shall have received from Company (i) audited
financial statements of Company and its Subsidiaries for Fiscal Year ending
April 30, 1997, consisting of balance sheets and the related consolidated and
consolidating statements of income, stockholders' equity and cash flows for
such Fiscal Year, (ii) unaudited financial statements of Company and its
Subsidiaries as at August 31, 1997, consisting of a balance sheet
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and the related consolidated and consolidating statements of income,
stockholders' equity and cash flows for the three- month period ending on such
date, and (iii) unaudited financial statements of Company and its Subsidiaries
as at September 30, 1997, consisting of a balance sheet and the related
consolidated and consolidating statements of income, stockholders' equity and
cash flows for the one-month period ending on such date, all in reasonable
detail and certified by the chief financial officer (or other officer
reasonably acceptable to Agent, of Company that they fairly present the
financial condition of Company and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments and, in the case of (ii) and (iii), the absence of footnotes, and
(iv) pro forma consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the Closing Date, prepared in accordance with GAAP and
reflecting the consummation of the Recapitalization and the financings and
other transactions contemplated hereby, which pro forma financial statements
shall be in form and substance satisfactory to Lenders.
I. NO MATERIAL ADVERSE EFFECT. Since April 30, 1997, no Material
Adverse Effect (in the sole good faith opinion of Agent) shall have occurred.
J. SOLVENCY ASSURANCES. On the Closing Date, Agent and Lenders
shall have received (i) a letter from Houlihan, Lokey, ▇▇▇▇▇▇ & ▇▇▇▇▇ Financial
Advisors, Inc., dated the Closing Date and addressed to Agent and Lenders, in
form and substance satisfactory to Agent and with appropriate attachments, and
(ii) a Financial Condition Certificate dated the Closing Date, substantially in
the form annexed hereto as Exhibit VI and with appropriate attachments, in each
case demonstrating that, after giving effect to the consummation of the
Recapitalization and the financing transactions contemplated hereby, Company
and its Subsidiaries, taken as a whole, will be Solvent.
K. SECURITY INTERESTS IN PERSONAL PROPERTY. Company and
Company's Subsidiaries shall have taken or caused to be taken (and Agent shall
have received satisfactory evidence thereof) such actions (other than the
filing or recording of items described in clauses (ii), (iii) and (iv) below)
in such a manner so that Agent has a valid and perfected first priority
security interest as of such date in the entire personal property Collateral.
Such actions shall include, without limitation, the following:
(i) delivery to Agent of certificates (which certificates
shall be registered in the name of Agent or properly endorsed in blank
for transfer or accompanied by irrevocable undated stock powers duly
endorsed in blank, all in form and substance satisfactory to Agent)
representing
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the capital stock pledged pursuant to the Company Pledge Agreement and
the Subsidiary Pledge Agreements and delivery to Agent of all other
instruments (duly endorsed where appropriate) evidencing the
Collateral;
(ii) delivery to Agent of the IP Collateral Documents,
together with accurate and complete schedules thereto and any cover
sheets required for filing with the United States Patent and Trademark
Office (the "PTO");
(iii) delivery to Agent of a Lock Box Agreement or a
Blocked Account Agreement executed by each Person that is a party
thereto with respect to each Deposit Account listed on Schedule I
annexed to the Company Security Agreement and the Subsidiary Security
Agreements (other than the BT Concentration Account);
(iv) delivery to Agent of Uniform Commercial Code
financing statements as to the Collateral for all jurisdictions as may
be necessary or desirable to perfect the security interests in the
Collateral;
(v) delivery to Agent of certificates of title with
respect to all rolling stock of Loan Parties and the taking of all
actions necessary to cause Agent to be noted as lienholder thereon or
otherwise necessary to perfect the first priority Lien granted to
Agent on behalf of Lenders in such rolling stock;
(vi) delivery to Agent of opinions of counsel under the
law of Texas and New York with respect to the creation and perfection
of the security interests in favor of Agent in any personal property
Collateral;
(vii) delivery to Agent of such other documents and
instruments that Agent reasonably deems necessary or advisable to
establish, preserve and perfect the first priority Liens granted to
Agent on behalf of Lenders under the Collateral Documents; and
(viii) evidence reasonably satisfactory to Agent that all
other filings, terminations, recordings and other actions Agent deems
necessary or advisable to establish, preserve and perfect the first
priority Liens granted to Agent in personal property shall have been
made.
L. COLLATERAL AUDIT; BORROWING BASE CERTIFICATE. On or before
the Closing Date, Company shall have provided such cooperation and assistance
as Agent may request in order to permit Agent (or an independent auditor
satisfactory to Agent) to complete audits of the Inventory and Accounts of
Company and its Subsidiaries and shall have delivered to Agent and Lenders a
Borrowing Base Certificate substantially in the form of
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Exhibit VII annexed hereto, prepared as of a recent date prior to the Closing
Date.
M. OPINIONS OF COMPANY'S COUNSEL. Lenders shall have received
originally executed copies of one or more favorable written opinions of Akin,
Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., counsel for Company, in form and substance
reasonably satisfactory to Agent and its counsel, dated as of the Closing Date
and setting forth substantially the matters in the opinions designated in
Exhibit VIII annexed hereto and as to such other matters as Agent acting on
behalf of Lenders may reasonably request.
N. OPINIONS OF O'MELVENY & ▇▇▇▇▇. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & ▇▇▇▇▇, dated as of the Closing Date, substantially in the form of
Exhibit IX annexed hereto and as to such other matters as Agent acting on
behalf of Lenders may reasonably request.
O. OPINIONS OF COUNSEL IN RECAPITALIZATION. Agent and its
counsel shall have received copies of each of the opinions of counsel delivered
to the parties under the Recapitalization Agreement together with a letter from
each such counsel authorizing Lenders to rely upon such opinion to the same
extent as though it were addressed to Lenders.
P. AUDITOR'S LETTER. Agent shall have received an executed
Auditor's Letter.
Q. EVIDENCE OF INSURANCE. Company shall deliver to Agent
certificates of insurance naming Agent on behalf of Lenders as loss payee under
all casualty insurance policies maintained by Company and its Subsidiaries, and
as an additional insured under all liability and business interruption
insurance policies maintained by Company and its Subsidiaries, all as required
pursuant to subsection 6.4 or pursuant to the Collateral Documents. All such
certificates of insurance shall contain such endorsements as are reasonably
required by Agent.
R. FEES. Company shall have paid to Agent, for distribution (as
appropriate) to Agent and Lenders, the fees payable on the Closing Date
referred to in subsection 2.3.
S. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company shall have delivered to Agent an Officers' Certificate, in form and
substance satisfactory to Agent, to the effect that the representations and
warranties in Section 5 hereof are true, correct and complete in all material
respects on and as of the Closing Date to the same extent as though made on and
as of that date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations and
warranties were true, correct and complete in
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all material respects on and as of such earlier date) and that Company shall
have performed in all material respects all agreements and satisfied all
conditions which this Agreement provides shall be performed or satisfied by it
on or before the Closing Date except as otherwise disclosed to and agreed to in
writing by Agent.
T. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Agent and such counsel, and Agent and
such counsel shall have received all such counterpart originals or certified
copies of such documents as Agent may reasonably request.
4.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:
A. Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, an originally executed
Notice of Borrowing, in each case signed by the chief executive officer, the
chief financial officer or the treasurer of the Company or by any executive
officer of Company designated by any of the above- described officers on behalf
of the Company in a writing delivered to Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein
and in the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same
extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier
date, in which case such representations and warranties shall have
been true, correct and complete in all material respects on and as of
such earlier date;
(ii) No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of Default or
a Potential Event of Default;
(iii) Company shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before that
Funding Date;
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(iv) No order, judgment or decree of any court, arbitrator
or governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding
Date shall not violate any law including, without limitation,
Regulation G, Regulation T, Regulation U or Regulation X of the Board
of Governors of the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Company or any of
its Subsidiaries or any property of Company or any of its Subsidiaries
that has not been disclosed by Company in writing pursuant to
subsection 5.6 or 6.1(x) prior to the making of the last preceding
Loans (or, in the case of the initial Loans, prior to the execution of
this Agreement), and there shall have occurred no development not so
disclosed in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed, that, in either event, in
the opinion of Agent or of Requisite Lenders, would be expected to
have a Material Adverse Effect; and no injunction or other restraining
order shall have been issued and no hearing to cause an injunction or
other restraining order to be issued shall be pending or noticed with
respect to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by this
Agreement or the making of Loans hereunder.
4.3 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not
the applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the conditions set forth in subsection 4.1
shall have been satisfied.
B. On or before the date of issuance of such Letter of Credit,
Agent shall have received, in accordance with the provisions of subsection
3.1B(i), an originally executed Request for Issuance of Letter of Credit, in
each case signed by the chief executive officer, the chief financial officer or
the treasurer of Company or by any executive officer of Company designated by
any of the above-described officers on behalf of Company in a writing delivered
to Agent, together with all other information specified in subsection 3.1B(i)
and such other
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documents or information as the applicable Issuing Lender may reasonably
require in connection with the issuance of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2B shall be satisfied to the
same extent as if the issuance of such Letter of Credit were the making of a
Loan and the date of issuance of such Letter of Credit were a Funding Date.
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Loans, to induce Issuing Lenders to issue Letters of Credit and to
induce other Lenders to purchase participations therein, Company represents and
warrants to each Lender, on the date of this Agreement, on each Funding Date
and on the date of issuance of each Letter of Credit, that the following
statements are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each Loan Party has all requisite corporate
power and authority to own and operate its properties, to carry on its business
as now conducted and as proposed to be conducted, to enter into the Loan
Documents and the Related Agreements to which it is a party and to carry out
the transactions contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party is qualified
to do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
in jurisdictions where the failure to be so qualified or in good standing has
not had and will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are engaged
only in the businesses permitted to be engaged in pursuant to subsection 7.14.
D. SUBSIDIARIES. All of the Subsidiaries of Company are
identified in Schedule 5.1 annexed hereto, as said Schedule 5.1 may be
supplemented from time to time pursuant to the provisions of subsection
6.1(xvii). The capital stock of Company and of each of the Subsidiaries of
Company identified in Schedule 5.1 annexed hereto (as so supplemented) is duly
authorized, validly issued, fully paid and nonassessable and none of such
capital stock constitutes Margin Stock. Each of the Subsidiaries of Company
identified in Schedule 5.1 annexed hereto (as so
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supplemented) is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation set
forth therein, has all requisite corporate power and authority to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, in each case except where failure to be
so qualified or in good standing or a lack of such corporate power and
authority has not had and will not have a Material Adverse Effect. Schedule
5.1 annexed hereto (as so supplemented) correctly sets forth, the ownership
interest of Company and each of its Subsidiaries in each of the Subsidiaries of
Company identified therein. The capital and ownership structure of Company and
its Subsidiaries, both before and after giving effect to the Recapitalization
and the related transactions contemplated in connection therewith, are as set
forth on Schedule 4.1C annexed hereto.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents and the Related Agreements have been duly
authorized by all necessary corporate action on the part of each Loan Party
that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by any
Loan Party of the Loan Documents and the Related Agreements to which it is a
party and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to any
Loan Party, the Certificate or Articles of Incorporation or Bylaws of any Loan
Party or any order, judgment or decree of any court or other agency of
government binding on any Loan Party, (ii) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of any Loan Party, except for such conflicts, breaches
or defaults which could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or assets of any
Loan Party (other than any Liens created under any of the Loan Documents in
favor of Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of any Loan Party, except for such approvals or consents which will
be obtained on or before the Closing Date.
C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by any Loan Party of the Loan Documents and the Related Agreements
to which it is a party and the consummation of the transactions contemplated by
the Loan Documents and such
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Related Agreements do not and will not require any registration with, consent
or approval of, or notice to, or other action to, with or by, any federal,
state or other governmental authority or regulatory body, except for (i)
filings required by federal or state securities laws and (ii) such other
registrations, consents, approvals, notices or other actions which have been
made, obtained, given or taken on or before the Closing Date or such later date
as may be required by the applicable governmental authority or regulatory body.
D. BINDING OBLIGATION. Each of the Loan Documents and the
Related Agreements has been duly executed and delivered by each Loan Party that
is a party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
E. VALID ISSUANCE OF COMPANY COMMON STOCK, THE BRIDGE NOTES, THE
CONVERSION NOTES, THE EXCHANGE NOTES AND THE TAKEOUT SECURITIES.
(i) Company Common Stock. The Company Common Stock
outstanding on the Closing Date is duly and validly issued, fully paid
and nonassessable. Other than as set forth in the Stockholder's
Agreement, no stockholder of Company has or will have any preemptive
rights to subscribe for any additional equity Securities of Company.
(ii) The Bridge Notes, the Conversion Notes, the Exchange
Notes and the Takeout Securities. Company has the corporate power and
authority to issue the Bridge Notes, the Conversion Notes, the
Exchange Notes and the Takeout Securities. Each of the Bridge Notes,
the Conversion Notes, the Exchange Notes and the Takeout Securities,
when issued and paid for, will be the legally valid and binding
obligations of Company, enforceable against Company in accordance with
their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles
relating to enforceability. The subordination provisions of the
Takeout Securities, if and when issued, are and/or will be enforceable
against the holders thereof in accordance with their terms and the
Loans, Letter of Credit and all other monetary Obligations hereunder
are and/or will be within the definitions of "Senior Indebtedness" and
"Designated Senior Indebtedness" included in such provisions. Each of
the Bridge Notes, the Conversion Notes, the Exchange Notes and the
Takeout Securities, when issued and sold, will either (a) have been
registered or qualified
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under applicable federal and state securities laws or (b) be exempt
therefrom.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders'
request, the financial statements and information described in subsection 4.1.
All such statements were prepared in conformity with GAAP and fairly present,
in all material respects, the financial position (on a consolidated and, where
applicable, consolidating basis) of the entities described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a consolidated and, where applicable, consolidating basis) of
the entities described therein for each of the periods then ended, subject, in
the case of any such unaudited financial statements, to the changes resulting
from audit and normal year-end adjustments and absence of footnotes. None of
the Loan Parties has (and none of the Loan Parties will have following the
funding of the initial Loans) any Contingent Obligation, contingent liability
or liability for taxes, long-term lease or unusual forward or long-term
commitment that is required by GAAP to be, but is not, or to the extent not
required by GAAP which is known to or reasonably should be known to the
Company, but is not, reflected in the foregoing financial statements or the
most recent financial statements delivered pursuant to subsection 6.1 or the
notes thereto and which in any such case is material in relation to the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company and its Subsidiaries, taken as a whole.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since April 30, 1997, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Since April 30, 1997, neither Company nor any of its Subsidiaries has
directly or indirectly declared, ordered, paid or made, or set apart any sum or
property for, any Restricted Junior Payment or agreed to do so except as
permitted by subsection 7.5 or as may be disclosed in the Recapitalization
Agreement or the Preliminary Offering Memorandum of the Company dated October
31, 1997.
5.5 TITLE TO PROPERTIES; LIENS.
Company and Company's Subsidiaries have (i) good and
indefeasible title to (in the case of fee interests in real property), (ii)
valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for assets disposed of since the date of such
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financial statements in the ordinary course of business or as otherwise
permitted under subsection 7.7. Except as permitted by this Agreement, all
such properties and assets are free and clear of Liens. Schedule 5.5 annexed
hereto sets forth all of the Real Property Assets of Company and its
Subsidiaries as of the Closing Date.
5.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 5.6 annexed hereto, there are
no actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of Company or any of Company's
Subsidiaries) at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of Company,
threatened against or affecting Company or any of Company's Subsidiaries or any
property of Company or any of Company's Subsidiaries that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect. Neither Company nor any of Company's Subsidiaries is (i) in violation
of any applicable laws that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect or (ii) subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all tax
returns and reports of Company and Company's Subsidiaries required to be filed
by any of them have been timely filed, and all taxes, assessments, fees and
other governmental charges upon Company and Company's Subsidiaries and upon
their respective properties, assets, income, businesses and franchises which
are due and payable have been paid when due and payable. Company does not know
of any proposed material tax assessment against Company or any of Company's
Subsidiaries which is not being actively contested by Company or such
Subsidiary in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. Neither Company nor any of Company's Subsidiaries is in
default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any of its
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Contractual Obligations, and no condition exists that, with the giving of
notice or the lapse of time or both, would constitute such a default, except
where the consequences, direct or indirect, of such default or defaults, if
any, would not have a Material Adverse Effect.
B. Neither Company nor any of Company's Subsidiaries is a party
to or is otherwise subject to any agreements or instruments or any charter or
other internal restrictions which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
C. All Material Contracts of Company and Company's Subsidiaries
are in full force and effect and no defaults currently exist thereunder, except
where the consequences, direct or indirect, of such default or defaults, if
any, would not have a Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
Neither Company nor any of Company's Subsidiaries is subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of Company's Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more
than 25% of the value of the assets (either of Company only or of Company and
its Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
or instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Company and each of its ERISA Affiliates are in compliance in
all material respects with all applicable provisions and requirements of ERISA
and the regulations and published interpretations thereunder and the terms of
each Employee Benefit Plan, and have performed all their material obligations
under each Employee Benefit Plan.
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B. No ERISA Event has occurred or is reasonably expected to occur
which could result in any material liability to Company or any of its ERISA
Affiliates.
C. Except to the extent required under Section 4980B of the
Internal Revenue Code, no Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employees of Company or any of its ERISA Affiliates.
D. In accordance with the most recent actuarial valuation for any
Pension Plan, the amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with respect to
which assets exceed benefit liabilities), does not exceed $200,000 prior to
March 31, 1998, or $100,000 at any time thereafter.
5.12 CERTAIN FEES.
Except as set forth in Schedule 5.12 annexed hereto, no
broker's or finder's fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby, and Company hereby
indemnifies Lenders against, and agrees that it will hold Lenders harmless
from, any claim, demand or liability for any such broker's or finder's fees
alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 5.13 annexed hereto:
(i) the operations of Company and each of its
Subsidiaries (including, without limitation, all operations and
conditions at or in the Facilities) comply with all Environmental Laws
except for any such noncompliance which would not reasonably be
expected to have a Material Adverse Effect;
(ii) Company and each of its Subsidiaries have obtained
all Governmental Authorizations under Environmental Laws necessary to
their respective operations, and all such Governmental Authorizations
are being maintained in good standing, and Company and each of its
Subsidiaries are in compliance with such Governmental Authorizations
except for any such failure to obtain, maintain or comply which would
not reasonably be expected to have a Material Adverse Effect;
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(iii) neither Company nor any of its Subsidiaries has
received (a) any notice or claim to the effect that it is or may be
liable to any Person as a result of or in connection with any
Hazardous Materials or (b) any letter or request for information under
Section 104 of the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. Section 9604) or comparable state laws,
and, to the best of the Company' knowledge, none of the operations of
Company or any of its Subsidiaries is the subject of any federal or
state investigation relating to or in connection with any Hazardous
Materials at any Facility or at any other location except for such of
the foregoing which would not reasonably be expected to have a
Material Adverse Effect;
(iv) none of the operations of Company or any of its
Subsidiaries is subject to any judicial or administrative proceeding
alleging the violation of or liability under any Environmental Laws
which if adversely determined could reasonably be expected to have a
Material Adverse Effect;
(v) neither Company nor any of its Subsidiaries nor any
of their respective Facilities or operations are subject to any
outstanding written order or agreement with any governmental authority
or private party relating to (a) any actual or potential violation of
or liability under Environmental Laws or (b) any Environmental Claims
except for such of the foregoing which would not reasonably be
expected to have a Material Adverse Effect;
(vi) neither Company nor any of its Subsidiaries has any
contingent liability in connection with any Release of any Hazardous
Materials by Company or any of its Subsidiaries except for such of the
foregoing which would not reasonably be expected to have a Material
Adverse Effect;
(vii) neither Company nor any of its Subsidiaries nor, to
the best knowledge of the Company, any predecessor of Company or any
of its Subsidiaries has filed any notice under any Environmental Law
indicating past or present treatment, storage or disposal of hazardous
waste, as defined under 40 C.F.R. Parts 260-270 or any state
equivalent;
(viii) no Hazardous Materials exist on, under or about any
Facility in a manner that would reasonably be expected to give rise to
an Environmental Claim having a Material Adverse Effect, and neither
Company nor any of its Subsidiaries has filed any notice or report of
a Release of any Hazardous Materials that would reasonably be expected
to give rise to an Environmental Claim having a Material Adverse
Effect;
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(ix) neither Company nor any of its Subsidiaries nor, to
the best knowledge of Company, any of their respective predecessors
has disposed of any Hazardous Materials in a manner that would
reasonably be expected to give rise to an Environmental Claim having a
Material Adverse Effect;
(x) to the best knowledge of Company, no underground
storage tanks or surface impoundments are on or at any Facility; and
(xi) no Lien in favor of any Person relating to or in
connection with any Environmental Claim has been filed or has been
attached to any Facility except for any such Lien which would not
reasonably be expected to have a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
5.15 SOLVENCY.
Company and each of its Subsidiaries is and, upon the
incurrence of any Obligations by Company on any date on which this
representation is made, will be, Solvent.
5.16 DISCLOSURE.
No representation or warranty of Company or any of its
Subsidiaries contained in any Loan Document or Related Agreement or in any
other document, certificate or written statement furnished to Lenders by or on
behalf of Company or any of its Subsidiaries for use in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits to state a material fact (known to Company, in the case
of any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by the Company to be reasonable at the time made, it being recognized
by Lenders that such projections as to future events are not to be viewed as
facts and that actual results during the period or periods covered by any such
projections may differ from the projected results and that such projections are
subject to significant uncertainties and contingencies, many of which are
beyond Company's control, and that no assurance can be given that such
projections will be realized. There are no facts known (or which should upon
the reasonable exercise of diligence be known) to the Company (other than
matters of a general economic nature) that,
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individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such
other documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
5.17 RELATED AGREEMENTS.
A. Company has delivered to Lenders complete and correct copies
of the Related Agreements and of all exhibits and schedules thereto.
B. Except to the extent otherwise set forth herein or in the
schedules hereto, each of the representations and warranties in the
Recapitalization Agreement is true and correct in all material respects as of
the Closing Date, subject to the qualifications set forth in the schedules to
the Recapitalization Agreement.
C. Notwithstanding anything in the Recapitalization Agreement to
the contrary, the representations and warranties of Company set forth in
subsection 5.17B shall, solely for purposes of this Agreement, survive the
Closing Date for the benefit of Lenders.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all
of the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Agent and Lenders:
(i) Monthly Financials: as soon as available and in any
event within 40 days after the end of each of the first three months
ending after the Closing Date and within 30 days after the end of each
month thereafter, (a) the consolidated and consolidating balance
sheets of Company and its Subsidiaries as at the end of such month and
the related consolidated and consolidating statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries
for such month and for the period from the
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beginning of the then current Fiscal Year to the end of such month,
setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and
the corresponding figures from the Financial Plan for the current
Fiscal Year, to the extent prepared on a monthly basis, all in
reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the
financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and
normal year-end adjustments and the absence of footnotes, and (b) a
narrative report describing the operations of Company and its
Subsidiaries in the form prepared for presentation to senior
management for such month and for the period from the beginning of the
then current Fiscal Year to the end of such month;
(ii) Quarterly Financials: as soon as available and in
any event within 45 days after the end of each of the first three
Fiscal Quarters, and within 90 days of the end of the fourth Fiscal
Quarter, (a) the consolidated and consolidating balance sheets of
Company and its Subsidiaries as at the end of such Fiscal Quarter and
the related consolidated and consolidating statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries
for such Fiscal Quarter and for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter, setting
forth in each case in comparative form the corresponding figures for
the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal
Year, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments and the absence of footnotes,
and (b) a narrative report describing the operations of Company and
its Subsidiaries in the form prepared for presentation to senior
management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter;
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Year and the related
consolidated and consolidating statements of income, stockholders'
equity and cash flows of Company and its Subsidiaries for such Fiscal
Year, setting forth in each case in comparative form the corresponding
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figures for the previous Fiscal Year and the corresponding figures
from the Financial Plan for the Fiscal Year covered by such financial
statements, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as
at the dates indicated and the results of their operations and their
cash flows for the periods indicated, (b) a narrative report
describing the operations of Company and its Subsidiaries in the form
prepared for presentation to senior management for such Fiscal Year,
and (c) in the case of such consolidated financial statements, (1) a
report thereon of a nationally recognized independent accounting firm,
which report shall be unqualified as to scope of audit, shall express
no doubts about the ability of Company and its Subsidiaries to
continue as a going concern, and shall state that such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in
such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing standards
and (2) a letter from such accounting firm, substantially in the form
of Exhibit XI annexed hereto but acknowledging that such accountants
were advised that Lenders would receive such consolidated financial
statements as audited by such accountants and that Lenders will use
such financial statements and report in their credit analyses of
Company and its Subsidiaries and with such other changes as are
approved by Agent;
(iv) Officers' and Compliance Certificates: together with
each delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (i), (ii) and (iii) above, (a) an Officers'
Certificate of Company stating that the signers have reviewed the
terms of this Agreement and have made, or caused to be made under
their supervision, a review in reasonable detail of the transactions
and condition of Company and its Subsidiaries during the accounting
period covered by such financial statements and that such review has
not disclosed the existence during or at the end of such accounting
period, and that the signers do not have knowledge of the existence as
at the date of such Officers' Certificate, of any condition or event
that constitutes an Event of Default or Potential Event of Default,
or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action Company have
taken, are taking and propose to take with respect thereto; and (b) a
Compliance
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Certificate demonstrating in reasonable detail compliance during and
at the end of the applicable accounting periods with the restrictions
contained in Section 7;
(v) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3, the consolidated financial statements of Company and
its Subsidiaries delivered pursuant to subdivisions (i), (ii), (iii)
or (xiii) of this subsection 6.1 will differ in any material respect
from the consolidated financial statements that would have been
delivered pursuant to such subdivisions had no such change in
accounting principles and policies been made, then (a) together with
the first delivery of financial statements pursuant to subdivision
(i), (ii), (iii) or (xiii) of this subsection 6.1 following such
change, consolidated financial statements of Company and its
Subsidiaries for (y) the current Fiscal Year to the effective date of
such change and (z) the two full Fiscal Years immediately preceding
the Fiscal Year in which such change is made, in each case prepared on
a pro forma basis as if such change had been in effect during such
periods, and (b) together with each delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this subsection
6.1 following such change, a written statement of the chief accounting
officer or chief financial officer of Company setting forth the
differences (including without limitation any differences that would
affect any calculations relating to the financial covenants set forth
in subsection 7.6) which would have resulted if such financial
statements had been prepared without giving effect to such change;
(vi) Accountants' Certification: together with each
delivery of consolidated financial statements of Company and its
Subsidiaries pursuant to subdivision (iii) above, a written statement
by the independent certified public accountants giving the report
thereon (a) stating that their audit examination has included a review
of the terms of this Agreement and the other Loan Documents as they
relate to accounting matters, (b) stating whether, in connection with
their audit examination, any condition or event that constitutes an
Event of Default or Potential Event of Default with respect to the
covenants set forth in Section 7, has come to their attention and, if
such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants
shall not be liable by reason of any failure to obtain knowledge of
any such Event of Default or Potential Event of Default that would not
be disclosed in the course of their audit examination, and (c) stating
that based on their audit examination nothing has come to their
attention that causes them to believe either or both that the
information
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contained in the certificates delivered therewith pursuant to
subdivision (iv) above is not correct or that the matters set forth in
the Compliance Certificates delivered therewith pursuant to clause (b)
of subdivision (iv) above for the applicable Fiscal Year are not
stated in accordance with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of
all reports submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit
of the financial statements of Company and its Subsidiaries made by
such accountants, including, without limitation, any comment letter
submitted by such accountants to management in connection with their
annual audit;
(viii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders or by any Subsidiary of Company to its
security holders other than Company or another Subsidiary of Company,
(b) all regular and periodic reports and all registration statements
(other than on Form S-8 or a similar form) and prospectuses, if any,
filed by Company or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by Company or
any of its Subsidiaries to the public concerning material developments
in the business of Company or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer
of Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Agent) or taken any other action with respect to a claimed Event of
Default or Potential Event of Default, (b) that any Person has given
any notice to Company or any of its Subsidiaries or taken any other
action with respect to a claimed default or event or condition of the
type referred to in subsection 8.2, (c) of any condition or event that
would be required to be disclosed in a current report filed by Company
with the Securities and Exchange Commission on Form 8-K (Items 1, 2,
4, 5 and 6 of such Form as in effect on the date hereof) if Company
were required to file such reports under the Exchange Act, or (d) of
the occurrence of any event or change that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect, an
Officers' Certificate specifying the nature and period of existence of
such condition, event or change, or specifying the notice
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given or action taken by any such Person and the nature of such
claimed Event of Default, Potential Event of Default, default, event
or condition, and what action Company have taken, are taking and
propose to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon
any officer of Company obtaining knowledge of (X) the institution of,
or non-frivolous threat of, any non-frivolous action, suit, proceeding
(whether administrative, judicial or otherwise), governmental
investigation or arbitration against or affecting Company or any of
its Subsidiaries or any property of Company or any of its Subsidiaries
(collectively, "PROCEEDINGS") not previously disclosed in writing by
Company to Lenders or (Y) any material development in any Proceeding
that, in any case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of
each Fiscal Quarter, a schedule of all Proceedings involving an
alleged liability of, or claims against or affecting, Company or any
of its Subsidiaries equal to or greater than $500,000, and promptly
after request by Agent such other information as may be reasonably
requested by Agent to enable Agent and its counsel to evaluate any of
such Proceedings;
(xi) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Company or any of
its ERISA Affiliates 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;
(xii) ERISA Notices: with reasonable promptness, copies of
(a) each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by Company or any of its ERISA Affiliates with the
Internal Revenue Service with respect to each Pension Plan; (b) all
material notices received by Company or any of its ERISA Affiliates
from a Multiemployer Plan sponsor concerning an ERISA Event; and (c)
such other documents or governmental reports or filings
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relating to any Employee Benefit Plan as Agent shall reasonably
request;
(xiii) Financial Plans: as soon as practicable and in any
event no later than 30 days prior to the beginning of each Fiscal
Year, a consolidated and consolidating plan and financial forecast for
such Fiscal Year (the "FINANCIAL PLAN" for such Fiscal Year),
including without limitation (a) a forecasted consolidated and
consolidating balance sheet and forecasted consolidated and
consolidating statements of income and cash flows of Company and its
Subsidiaries for such Fiscal Year, together with a pro forma
Compliance Certificate for such Fiscal Year and an explanation of the
assumptions on which such forecasts are based, and (b) forecasted
consolidated and consolidating statements of income and cash flows of
Company and its Subsidiaries for each month of such Fiscal Year,
together with an explanation of the assumptions on which such
forecasts are based;
(xiv) Insurance: as soon as practicable and in any event
by the last day of each Fiscal Year, a report in form and substance
satisfactory to Agent outlining all material insurance coverage
maintained as of the date of such report by Company and its
Subsidiaries and all material insurance coverage planned to be
maintained by Company and its Subsidiaries in the immediately
succeeding Fiscal Year and confirming the status of Agent as loss
payee under all such insurance to the extent required by subsection
6.4;
(xv) Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental
audits and reports, whether prepared by personnel of Company or any of
its Subsidiaries or by independent consultants, with respect to
significant environmental matters at any Facility or which relate to
an Environmental Claim in either case which could reasonably be
expected to result in a Material Adverse Effect;
(xvi) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of Company;
(xvii) New Subsidiaries: promptly upon any Person becoming
a Subsidiary of Company, a written notice setting forth with respect
to such Person (a) the date on which such Person became a Subsidiary
of Company and (b) all of the data required to be set forth in
Schedule 5.1 annexed hereto with respect to all Subsidiaries of
Company (it being understood that such written notice shall be deemed
to supplement Schedule 5.1 annexed hereto for all purposes of this
Agreement;
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(xviii) Material Contracts: promptly, and in any event
within 10 Business Days after any Material Contract of Company or any
of its Subsidiaries is terminated or amended in a manner that is
materially adverse to Company or such Subsidiary, as the case may be,
or any new Material Contract is entered into, a written statement
describing such event with copies of such material amendments or new
contracts, and an explanation of any actions being taken with respect
thereto; and
(xix) Borrowing Base Certificates: as soon as available
and in any event within five (5) Business Days or, in the case of
months which are the last month of a Fiscal Quarter, within ten (10)
Business Days, after the last Business Day of each month ending after
the Closing Date, a Borrowing Base Certificate dated as of the last
Business Day of such month, together with any additional schedules and
other information as Agent may reasonably request, which Borrowing
Base Certificate with respect to Inventory for the months ended on
April 30, July 31, October 31, and January 31, shall be based on an
actual physical count of such Inventory and for all other months may
be based on Company's estimated gross profit margin for such monthly
period; Company, in addition to such monthly Borrowing Base
Certificates, may from time to time deliver to Agent and Lenders on
any Business Day after the Closing Date a Borrowing Base Certificate
dated as of such Business Day, together with any additional schedules
and other information as Agent may reasonably request), and the most
recent Borrowing Base Certificate described in this clause (xix) that
is delivered to Agent shall be used in calculating the Borrowing Base
as of any date of determination; and
(xx) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, Company will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its corporate existence and all rights and franchises material
to its business.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause each of its Subsidiaries to, pay
all taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any material penalty accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
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supplies) for sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
material penalty or fine shall be incurred with respect thereto; provided that
no such charge or claim need be paid if (i) being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if
such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor or (ii) failure to pay,
individually or in the aggregate for all such failures, could not reasonably be
expected to result in a Material Adverse Effect. Notwithstanding anything to
the contrary contained in the foregoing sentence, within 30 days of the Closing
Date, Company will pay in full any delinquent franchise taxes.
B. The Company will not, and will not permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Company or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
Company will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained in good repair, working order and condition,
ordinary wear and tear excepted, all of their respective material properties
used or useful in the business of Company and its Subsidiaries (including,
without limitation, Intellectual Property) and from time to time will make or
cause to be made all appropriate repairs, renewals and replacements thereof.
Company will maintain or cause to be maintained, with financially sound and
reputable insurers, insurance with respect to its properties and business and
the properties and businesses of its Subsidiaries against loss or damage of the
kinds customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses. Without
limiting the generality of the foregoing, Company will maintain or cause to be
maintained public liability insurance, third party property damage insurance
and replacement value insurance on the Collateral (other than growing crops)
under such policies of insurance, with such insurance companies, in such
amounts and covering such risks as are at all times satisfactory to Agent in
its commercially reasonable judgment. Each such policy of insurance that
insures against loss or damage with respect to any Collateral or against losses
due to business interruption shall name Agent for the benefit of Lenders as the
loss payee thereunder for any covered loss in excess of $500,000 and shall have
attached thereto a loss payable clause acceptable to Agent that shall (i)
contain an agreement by the insurer that any loss thereunder shall be payable
to Agent notwithstanding any action, inaction or breach of representation or
warranty by Company, (ii) provide that there shall be no recourse against Agent
for payment of premiums or other amounts with respect thereto, and (iii)
provide that at
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least 30 days (15 days in the event of nonpayment of premium) prior written
notice of cancellation, material amendment, reduction in scope or limits of
coverage or of lapse shall be given to Agent by the insurer. Upon receipt by
Agent of any insurance proceeds as loss payee (i) in respect of any such
business interruption insurance, (a) Agent shall, so long as no Event of
Default or Potential Event of Default shall have occurred and be continuing,
deliver such insurance proceeds to Company, and (b) if an Event of Default or
Potential Event of Default shall have occurred and be continuing, Agent shall,
and Company hereby authorizes Agent to, apply such insurance proceeds to prepay
the Loans, and (ii) in respect of any such insurance against loss or damage
with respect to any Collateral, (a) to the extent that Company or any of its
Subsidiaries intends to use any such insurance proceeds to repair, restore or
replace the assets of Company or Subsidiary in respect of which such insurance
proceeds were received, Agent shall, so long as no Event of Default or
Potential Event of Default shall have occurred and be continuing, (A) in the
event the aggregate amount of such insurance proceeds in respect of any covered
loss does not exceed $1,000,000, deliver such insurance proceeds to Company,
and Company shall, or shall cause such Subsidiary to, use such insurance
proceeds to effect such repair, restoration or replacement, and (B) in the
event the aggregate amount of such insurance proceeds exceeds $1,000,000, hold
such proceeds in a cash collateral account and so long as Company or any of its
Subsidiaries proceeds to repair, restore or replace the assets of Company or
such Subsidiary in respect of which such insurance proceeds were received,
Agent shall from time to time disburse to Company or such Subsidiary amounts
necessary to pay the cost of such repair, restoration or replacement after the
receipt by Agent of invoices or other documentation reasonably satisfactory to
Agent describing the amount of costs so incurred; provided however that if in
the reasonable good faith belief of Agent, Company or such Subsidiary is not
proceeding diligently with the repair, restoration or replacement, Agent shall,
and Company hereby authorize Agent to, apply such insurance proceeds to prepay
the Loans and (b) if an Event of Default or Potential Event of Default shall
have occurred and be continuing or to the extent that neither Company nor any
of its Subsidiaries intends to use any such insurance proceeds to repair,
restore or replace assets of Company or any of its Subsidiaries as described
above, Agent shall, and Company hereby authorize Agent to, apply such insurance
proceeds to prepay the Loans.
6.5 INSPECTION; LENDER MEETING.
Company shall, and shall cause each of its Subsidiaries to,
permit (i) any authorized representatives designated by any Lender to visit and
inspect any of the properties of Company or any of its Subsidiaries, including
its and their financial and accounting records, and to make copies and take
extracts therefrom, and to discuss its and their affairs, finances and
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accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), and (ii) any authorized representatives designated by
Agent to conduct four audits of all Inventory and Accounts of Loan Parties
during each twelve-month period after the Closing Date, and such additional
audits as Agent may deem necessary or advisable at any time after the
occurrence and during the continuance of an Event of Default, all upon
reasonable notice and at such reasonable times during normal business hours as
may be reasonably requested. Without in any way limiting the foregoing,
Company will, upon the request of Agent or Requisite Lenders, participate in a
meeting of Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or such other location as may be agreed to by
Company and Agent) at such time as may be agreed to by Company and Agent.
6.6 COMPLIANCE WITH LAWS, ETC.
Company shall, and shall cause each of its Subsidiaries to,
comply with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority, noncompliance with which could reasonably
be expected to cause, individually or in the aggregate at any time, a Material
Adverse Effect.
6.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
A. Company shall, and shall cause each of its Subsidiaries to,
exercise all due diligence in order to comply in all material respects and
cause (i) all tenants under any leases or occupancy agreements affecting any
portion of the Facilities and (ii) all other Persons on or occupying such
property, to comply in all material respects with all Environmental Laws,
except where failure to comply, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
B. Company agrees that Agent may, from time to time and in its
reasonable discretion and upon a reasonable belief that Company has breached
any covenant or representation with respect to environmental matters or that
there has been a material violation of Environmental Laws at any Facility or by
Company, retain, at Company's expense, an independent professional consultant
to review any report relating to Hazardous Materials prepared by or for Company
and to conduct its own reasonable investigation of such matter at any Facility
currently owned, leased, operated or used by Company or any of its
Subsidiaries, and Company agrees to use its commercially reasonable efforts to
obtain permission for Agent's professional consultant to conduct its own
investigation of any such matter at any Facility previously owned, leased,
operated or used by Company or any of its Subsidiaries. Company hereby grants
to Agent and its agents, employees, consultants and contractors the right to
enter into or
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on to the Facilities currently owned, leased, operated or used by Company or
any of its Subsidiaries upon reasonable notice to Company to perform such
assessments on such property as are reasonably necessary to conduct such a
review and/or investigation. Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by Company and Agent, during normal
business hours and, to the extent reasonably practicable, shall be conducted so
as not to interfere with the ongoing operations at any such Facility or to
cause any damage or loss to any property at such Facility. Company and Agent
hereby acknowledge and agree that any report of any investigation conducted at
the request of Agent pursuant to this subsection 6.7B will be obtained and
shall be used by Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the Loans and to protect Lenders' security
interests, if any, created by the Loan Documents. Agent agrees to deliver a
copy of any such report to Company with the understanding that Company
acknowledges and agrees that (i) it will indemnify and hold harmless Agent and
each Lender from any costs, losses or liabilities relating to Company's use of
or reliance on such report, (ii) neither Agent nor any Lender makes any
representation or warranty with respect to such report, and (iii) by delivering
such report to Company, neither Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report.
C. Company shall promptly advise Lenders in writing and in
reasonable detail of (i) any material Release of any Hazardous Materials
required to be reported to any federal, state or local governmental or
regulatory agency under any applicable Environmental Laws, (ii) any and all
written communications with respect to any Environmental Claims that have a
reasonable possibility of giving rise to a Material Adverse Effect or with
respect to any material Release of Hazardous Materials required to be reported
to any federal, state or local governmental or regulatory agency, (iii) any
remedial action taken by Company or any other Person in response to (x) any
Hazardous Materials on, under or about any Facility, the existence of which has
a reasonable possibility of resulting in an Environmental Claim having a
Material Adverse Effect, or (y) any Environmental Claim that could have a
Material Adverse Effect, (iv) Company's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of any Facility
that could reasonably be expected to cause such Facility or any part thereof to
be subject to any material restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws, and (v) any
request for information from any governmental agency that suggests such agency
is investigating whether Company or any of its Subsidiaries may be potentially
responsible for a Release of Hazardous Materials.
D. Company shall promptly notify Lenders of (i) any proposed
acquisition of stock, assets, or property by Company or
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any of its Subsidiaries that could reasonably be expected to expose Company or
any of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have a Material Adverse Effect or that could
reasonably be expected to have a material adverse effect on any Governmental
Authorization then held by Company or any of its Subsidiaries and (ii) any
proposed action to be taken by Company or any of its Subsidiaries to commence
manufacturing, industrial or other operations that could reasonably be expected
to subject Company or any of its Subsidiaries to material additional
obligations or requirements under Environmental Laws.
E. Company shall, at its own expense, provide copies of such
documents or information as Agent may reasonably request in relation to any
matters disclosed pursuant to this subsection 6.7.
6.8 COMPANY'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
Company shall promptly take, and shall cause each of its
Subsidiaries promptly to take, any and all remedial action in connection with
the presence, storage, use, disposal, transportation or Release of any
Hazardous Materials on, under or about any Facility in order to comply with all
applicable Environmental Laws and Governmental Authorizations except where
failure to comply, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. In the event Company or any
of its Subsidiaries undertakes any remedial action with respect to any
Hazardous Materials on, under or about any Facility, Company or such Subsidiary
shall conduct and complete such remedial action in compliance with all
applicable Environmental Laws, except where failure to comply, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, and in accordance with the policies, orders and directives of
all federal, state and local governmental authorities except when, and only to
the extent that, Company's or such Subsidiary's liability for such presence,
storage, use, disposal, transportation or discharge of any Hazardous Materials
is being contested in good faith by Company or such Subsidiary.
6.9 REFINANCING OF BRIDGE NOTES; CONVERSION TO TERM LOANS UNDER THE BRIDGE
NOTE AGREEMENT.
If not earlier refinanced through the issuance of Takeout
Securities pursuant to the Takeout Securities Indenture as permitted under
Section 7.1(vi), Company shall, on the Conversion Date, convert the entire
aggregate principal amount outstanding under the Bridge Notes to a term loan
pursuant to the terms of the Bridge Note Agreement, such term loan to be
evidenced by the Conversion Notes.
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6.10 EXECUTION OF GUARANTIES AND COLLATERAL DOCUMENTS BY FUTURE
SUBSIDIARIES.
A. EXECUTION OF SUBSIDIARY GUARANTY AND COLLATERAL
DOCUMENTS. In the event that any Person becomes a Domestic Subsidiary of
Company after the date hereof, Company will promptly notify Agent of that fact
and cause such Domestic Subsidiary to execute and deliver to Agent a
counterpart of the Subsidiary Guaranty and a Subsidiary Pledge Agreement, a
Subsidiary Security Agreement, a Subsidiary Trademark Security Agreement, a
Subsidiary Patent Security Agreement and to take all such further action and
execute all such further documents and instruments as may be reasonably
required to grant and perfect in favor of Agent, for the benefit of Lenders, a
first-priority security interest in all of the personal property assets of such
Domestic Subsidiary described in the applicable Collateral Documents. With
respect to any such Domestic Subsidiary, Company shall also deliver to Agent a
pledge amendment to the Company Pledge Agreement or the applicable Subsidiary
Pledge Agreement, as appropriate, granting to Agent on behalf of Lenders a
first priority security interest in one hundred percent (100%) of the capital
stock of such Domestic Subsidiary. With respect to any such Foreign
Subsidiary, Company shall deliver to Agent a pledge amendment to the Company
Pledge Agreement or shall execute a Company Pledge Agreement under the laws of
the jurisdiction of organization or incorporation of such Foreign Subsidiary,
in each case granting to Agent on behalf of Lenders a first priority security
interest in 65% of the capital stock of such Foreign Subsidiary, and, in each
case, Company shall take, or cause to be taken, all such other actions as Agent
shall deem necessary or desirable to perfect such security interest.
B. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC.
Company shall deliver to Agent, together with the applicable Guaranty and such
Collateral Documents, (i) certified copies of such Subsidiary's Articles or
Certificate of Incorporation, together with a good standing certificate from
the Secretary of State of the jurisdiction of its incorporation, each to be
dated a recent date prior to their delivery to Agent, (ii) a copy of such
Subsidiary's Bylaws, certified by its corporate secretary or an assistant
corporate secretary as of a recent date prior to their delivery to Agent, (iii)
a certificate executed by the secretary or an assistant secretary of such
Subsidiary as to (a) the incumbency and signatures of the officers of such
Subsidiary executing such Guaranty and the Collateral Documents to which such
Subsidiary is a party and (b) the fact that the attached resolutions of the
Board of Directors of such Subsidiary authorizing the execution, delivery and
performance of such Guaranty and such Collateral Documents are in full force
and effect and have not been modified or rescinded, and (iv) a favorable
opinion of counsel to such Subsidiary, in form and substance satisfactory to
Agent and its counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the
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due authorization, execution and delivery by such Subsidiary of such Guaranty
and such Collateral Documents, (c) the enforceability of such Guaranty and such
Collateral Documents against such Subsidiary, and (d) such other matters as
Agent may reasonably request, all of the foregoing to be satisfactory in form
and substance to Agent and its counsel.
SECTION 7. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all
of the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 7.
7.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Company may become and remain liable with respect to
the Obligations;
(ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
7.4 and, upon any matured obligations actually arising pursuant
thereto, the Indebtedness corresponding to the Contingent Obligations
so extinguished;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness in respect of Capital Leases or
purchase money Indebtedness; provided that the aggregate amount of
such Indebtedness does not exceed $100,000 at any time outstanding;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries, and any
wholly-owned Subsidiary of Company may become and remain liable with
respect to Indebtedness to Company or any other wholly-owned
Subsidiary of Company; provided that (a) all such intercompany
Indebtedness shall be evidenced by promissory notes that are pledged
to Agent pursuant to the terms of the applicable Collateral Document,
(b) all such intercompany Indebtedness owed by Company to any of its
Subsidiaries shall be subordinated in right of payment to the payment
in full of the Obligations pursuant to the terms of the applicable
promissory notes or an intercompany subordination agreement, and (c)
any payment by any
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Subsidiary of Company under any guaranty of the Obligations shall
result in a pro tanto reduction of the amount of any intercompany
Indebtedness owed by such Subsidiary to Company or to any of its
Subsidiaries for whose benefit such payment is made;
(v) Company may become and remain liable with respect to
up to $100,000,000 in aggregate principal amount of Indebtedness
evidenced by the Bridge Notes (as well as any payment-in-kind Bridge
Notes issued in lieu of cash interest thereon) and (a) Indebtedness
evidenced by the Conversion Notes, to the extent such Indebtedness has
been converted from Indebtedness under the Bridge Notes in accordance
with the terms of the Bridge Note Agreement (as well as any
payment-in-kind Bridge Notes issued in lieu of cash interest thereon),
(b) Indebtedness evidenced by the Takeout Securities issued pursuant
to the Takeout Securities Indenture, so long as all of the net
proceeds thereof are used to refinance in whole or in part an equal
principal amount of the Bridge Notes, the Conversion Notes, or the
Exchange Notes, and (c) Indebtedness evidenced by the Exchange Notes
issued pursuant to the Exchange Note Indenture to the extent such
Indebtedness has been exchanged for an equal principal amount of the
Conversion Notes(as well as any payment-in-kind Bridge Notes issued in
lieu of cash interest thereon);
(vi) the Purchase Price Adjustment Notes in the maximum
aggregate principal amount of $10,000,000; and
(vii) Company and its Subsidiaries may become and remain
liable with respect to other Indebtedness in an aggregate principal
amount not to exceed $250,000 at any time outstanding.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
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(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens on the Real Property Assets of Company and its
Subsidiaries and Liens on the personal property of Company and its
Subsidiaries other than Accounts, Inventory and intangibles (including
without limitation all Intellectual Property) securing the Bridge
Notes, the Conversion Notes or the Exchange Notes;
(iv) Liens securing Contingent Obligations of Company
under Currency Agreements with any Lender or any Affiliate of any
Lender that are permitted under subsection 7.4(vi); and
(v) Other Liens securing Indebtedness in an aggregate
amount not to exceed $100,000 at any time outstanding.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, none of the
Company or any of its Subsidiaries shall enter into any agreement (other than
the Bridge Note Agreement, the Exchange Note Indenture and the Takeout
Securities Indenture) prohibiting the creation or assumption of any Lien upon
any of its properties or assets, whether now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR
OTHER SUBSIDIARIES. Except as provided herein, as may be provided for in any
Indebtedness permitted pursuant to subsection 7.1(v) or as may be imposed in
connection with an Asset Sale permitted pursuant to subsection 7.7, Company
will not, and will not permit any of its Subsidiaries to, create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any such Subsidiary to (i) pay
dividends or make any other distributions on any of such Subsidiary's capital
stock owned by Company or any other Subsidiary of Company, (ii) repay or prepay
any Indebtedness owed by such Subsidiary to Company or any other Subsidiary of
Company,
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(iii) make loans or advances to Company or any other Subsidiary of Company, or
(iv) transfer any of its property or assets to Company or any other Subsidiary
of Company.
7.3 INVESTMENTS; JOINT VENTURES.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
(i) Company and its Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries
of Company;
(iii) Company and its Subsidiaries may make intercompany
loans to the extent permitted under subsection 7.1(iv);
(iv) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted by subsection 7.8;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
and
(vi) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time
$1,000,000.
7.4 CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of Letters of
Credit;
(ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations arising under their
respective Guaranties;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets;
(iv) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of
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any Indebtedness of Company or any of its Subsidiaries permitted by
subsection 7.1;
(v) Company's Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of guaranties made
under the Bridge Note Agreement, and Subsidiaries of Company may
become and remain liable with respect to Contingent Obligations under
guaranties made under the Exchange Note Indenture or under guaranties
made under the Takeout Securities Indenture;
(vi) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations under Currency
Agreements entered into in the ordinary course of business with a
Lender or an Affiliate of a Lender in a notional amount not to exceed
$1,000,000 for all such Currency Agreements; and
(vii) Company and its Subsidiaries may become and remain
liable with respect to other Contingent Obligations; provided that the
maximum aggregate liability, contingent or otherwise, of Company and
its Subsidiaries in respect of all such Contingent Obligations shall
at no time exceed $100,000.
7.5 RESTRICTED JUNIOR PAYMENTS; CERTAIN OTHER PAYMENTS.
A. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment; provided that Company may make
payments of regularly scheduled interest in respect of the Takeout Securities
in accordance with the terms of and to the extent required by (and subject to
the subordination provisions, if any, contained in) the Takeout Securities
Indenture.
B. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for payment on the Bridge Notes, the Conversion Notes or the Exchange
Notes; provided that (i) Company may make payments of regularly scheduled
interest in respect of the Bridge Notes, the Conversion Notes and the Exchange
Notes, in each case in accordance with the terms of and to the extent required
by the Bridge Note Agreement or the Exchange Note Indenture and (ii) Company
may (a) refinance the Bridge Notes, Conversion Notes or Exchange Notes with the
proceeds of the Takeout Securities, (b) convert the Bridge Notes into the
Conversion Notes, or (c) exchange the Conversion Notes for the Exchange Notes.
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7.6 FINANCIAL COVENANTS.
A. MINIMUM INTEREST COVERAGE RATIO. Company shall not permit the
ratio of (i) Consolidated EBITDA to (ii) Consolidated Interest Expense for any
four-Fiscal Quarter period ending during any of the periods set forth below to
be less than the correlative ratio indicated:
MINIMUM
PERIOD INTEREST COVERAGE RATIO
------------------------ -----------------------
Closing Date to October 30, 1998 1.50:1.00
November 1, 1998 to October 30, 1999 1.60:1.00
November 1, 1999 to October 30, 2000 1.80:1.00
November 1, 2000 to October 30, 2001 1.90:1.00
B. MAXIMUM LEVERAGE RATIO. Company shall not permit the ratio of
(i) Consolidated Total Debt as of the last day of any Fiscal Quarter occurring
during any of the periods set forth below to (ii) Consolidated EBITDA for the
four-Fiscal Quarter period ending on such last day to exceed the correlative
ratio indicated:
PERIOD MAXIMUM LEVERAGE RATIO
------------------------- ----------------------
Closing Date to October 30, 1998 6.75:1.00
November 1, 1998 to October 30, 1999 6.25:1.00
November 1, 1999 to October 30, 2000 5.75:1.00
November 1, 2000 to October 30, 2001 5.25:1.00
C. MINIMUM CONSOLIDATED EBITDA. Company shall not permit
Consolidated EBITDA for any four-Fiscal Quarter period ending as of the last
day of any Fiscal Quarter occurring during any of the periods set forth below
to be less than the correlative amount indicated:
MINIMUM CONSOLIDATED
PERIOD EBITDA
---------------------------- --------------------
Closing Date to October 30, 1998 $16,300,000
November 1, 1998 to October 30, 1999 $18,200,000
November 1, 1999 to October 30, 2000 $19,800,000
November 1, 2000 to October 30, 2001 $20,200,000
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Company shall not, and shall not permit any of its
Subsidiaries to, alter the corporate, capital or legal structure of Company or
any of its Subsidiaries, or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or
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convey, sell, lease or sub-lease (as lessor or sub-lessor), transfer or
otherwise dispose of, in one transaction or a series of transactions, all or
any part of its business, property or fixed assets, whether now owned or
hereafter acquired, or acquire by purchase or otherwise all or substantially
all the business, property or fixed assets of, or stock or other evidence of
beneficial ownership of, any Person or any division or line of business of any
Person, except:
(i) any Subsidiary of Company may be merged with or into
Company or any wholly-owned Subsidiary of Company, or may be
liquidated, wound up or dissolved, or all or any part of its business,
property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions,
to Company or any wholly-owned Subsidiary of Company; provided that,
in the case of such a merger described in the foregoing clause (a) or
(b), Company or such wholly-owned Subsidiary shall be the continuing
or surviving corporation;
(ii) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted under subsection 7.8;
(iii) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in
an amount at least equal to the fair market value thereof (as
reasonably determined by the Board of Directors of Company); and
(iv) subject to subsection 7.13, Company and its
Subsidiaries may make Asset Sales of assets having a fair market value
not in excess of $250,000 per Fiscal Year; provided that (x) the
consideration received for such assets shall be in an amount at least
equal to the fair market value thereof (as reasonably determined by
the Board of Directors of Company); and (y) at least seventy five
percent (75%) of the consideration received shall be cash or Cash
Equivalents.
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Company shall not, and shall not permit its Subsidiaries to,
make or incur Consolidated Capital Expenditures, in any period indicated below,
in an aggregate amount in excess of the corresponding amount set forth below
opposite such period:
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MAXIMUM CONSOLIDATED
PERIOD CAPITAL EXPENDITURES
----------------------- ----------------------
Closing Date to October 30, 1998 $9,500,000
November 1, 1998 to October 30, 1999 $4,800,000
November 1, 1999 to October 30, 2000 $4,800,000
November 1, 2000 to October 30, 2001 $4,800,000
7.9 FISCAL YEAR.
Company shall not change its Fiscal Year-end from April 30.
7.10 SALES AND LEASE-BACKS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, become or remain liable as lessee or
as a guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) which Company or any of its
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than Company or any of its Subsidiaries) or (ii) which Company or
any of its Subsidiaries intends to use for substantially the same purpose as
any other property which has been or is to be sold or transferred by Company or
any of its Subsidiaries to any Person (other than Company or any of its
Subsidiaries) in connection with such lease; provided that Company and its
Subsidiaries may become and remain liable as lessee, guarantor or other surety
with respect to any such lease if and to the extent that (i) such Lease, if a
Capital Lease, is permitted pursuant to subsection 7.1(iii) and (ii) the
consideration received is at least equal to the fair market value of the
property sold as determined in good faith by Company's Board of Directors.
7.11 SALE OR DISCOUNT OF RECEIVABLES.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, sell with recourse, or discount or
otherwise sell for less than the face value thereof, any of its notes or
accounts receivable other than sales for collection of defaulted receivables
over 120 days past due.
7.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any holder of 5%
or more of any class of equity Securities of Company or with any Affiliate of
Company or of any such holder, on terms that are less favorable
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to Company or that Subsidiary, as the case may be, than those that might be
obtained at the time from Persons who are not such a holder or Affiliate;
provided that the foregoing restriction shall not apply to (i) any transaction
between Company and any of its wholly-owned Subsidiaries and Guarantors; or
between any of its wholly-owned Subsidiaries and Guarantors; (ii) reasonable
and customary fees paid to members of the Boards of Directors of Company and
its Subsidiaries; (iii) fees payable to ▇▇▇▇▇ Capital Corp. and disclosed in
the Preliminary Offering Memorandum of Company dated October 31, 1997; (iv)
compensation payable to the Existing Shareholders pursuant to employment
agreements between Company and such Existing Shareholders and disclosed in such
Preliminary Offering Memorandum; and (v) reimbursement payments to Newco with
respect to Newco's expenses incurred in connection with the Recapitalization
and related transactions.
7.13 DISPOSAL OF SUBSIDIARY STOCK.
Except pursuant to the Collateral Documents and except for any
sale of 100% of the capital stock or other equity Securities of any of its
Subsidiaries in compliance with the provisions of subsection 7.7(iv), Company
shall not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other
equity Securities of any of its Subsidiaries, except to qualify
directors if required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly
to sell, assign, pledge or otherwise encumber or dispose of any shares
of capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to Company, another Subsidiary of
Company, or to qualify directors if required by applicable law.
7.14 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall
not permit any of its Subsidiaries to, engage in any business other than (i)
the businesses engaged in by Company and its Subsidiaries on the Closing Date
and similar or related businesses and (ii) such other lines of business as may
be consented to by Requisite Lenders.
7.15 AMENDMENTS OF CERTAIN DOCUMENTS; DESIGNATION OF DESIGNATED SENIOR
DEBT.
A. Company shall not, and shall not permit any of its
Subsidiaries to, amend or otherwise change the terms of the Bridge Note
Agreement, the Exchange Note Indenture or the Takeout Securities Indenture or
any of the exhibits to any of the
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foregoing or of any Subordinated Indebtedness or any agreement related thereto
or any guaranty entered into by any Loan Party in connection therewith
(collectively, the "RESTRICTED AGREEMENTS"), or make any payment consistent
with an amendment thereof or change thereto, if the effect of such amendment or
change is to increase the interest rate on such Indebtedness or any such
Restricted Agreement, change any dates upon which payments of principal or
interest are due thereon, change any of the covenants with respect thereto in a
manner which is more restrictive to Company or any of its Subsidiaries, change
any event of default or condition to an event of default with respect thereto,
change the redemption, prepayment or defeasance provisions thereof, change any
subordination provisions thereof (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the effect
of such amendment or change, together with all other amendments or changes
made, is to increase the obligations of the obligor thereunder or to confer any
additional rights on the holders of such Indebtedness or any such Restricted
Agreement (or a trustee or other representative on their behalf) which would be
adverse to any Loan Party or Lenders.
B. Company shall not, and shall not permit any of its
Subsidiaries to, agree to any material amendment to, or waive any of its
material rights under, or otherwise change any material terms of any of the
Related Agreements (other than the Related Agreements subject to subsection
7.15A) without the prior written consent of Requisite Lenders.
C. Company shall not, and shall not permit any of its
Subsidiaries to, designate any Indebtedness as "Designated Senior Debt" (as
defined in the Takeout Securities Indenture) for purposes of the Takeout
Securities Indenture without the prior written consent of Requisite Lenders.
7.16 DEPOSIT ACCOUNTS.
Company shall not, and shall not permit any of its
Subsidiaries to, maintain any Deposit Account which is not a Lock Box Account
or a Concentration Account or a disbursement account under the exclusive
dominion and control of Agent.
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of
Default") shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of or
interest on any Loan when due, whether at stated maturity, by acceleration, by
notice of voluntary prepayment, by mandatory
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prepayment or otherwise; failure by Company to pay when due any amount payable
to an Issuing Lender in reimbursement of any drawing under a Letter of Credit;
or failure by Company to pay any fee or any other amount due under this
Agreement within five days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay
when due any principal of or interest on one or more items of
Indebtedness (other than Indebtedness referred to in subsection 8.1)
or Contingent Obligations in an individual principal amount of
$100,000 or more or with an aggregate principal amount of $250,000 or
more, in each case beyond the end of any grace period provided
therefor; or (ii) breach or default by Company or any of its
Subsidiaries with respect to any other material term of (a) one or
more items of Indebtedness or Contingent Obligations in the individual
or aggregate principal amounts referred to in clause (i) above or (b)
any loan agreement, mortgage, indenture or other agreement relating to
such item(s) of Indebtedness or Contingent Obligation(s), if the
effect of such breach or default is to cause, or to permit the holder
or holders of that Indebtedness or Contingent Obligation(s) (or a
trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due
and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or
receiving of notice, lapse of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by Company or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Company or any of its
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Company or any of its Subsidiaries shall default in the
performance of or compliance with any term contained in this Agreement or any
of the other Loan Documents, other than any such term referred to in any other
subsection of this Section 8, and such default shall not have been remedied or
waived within 15
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days after the earlier of (i) an officer of Company becoming aware of such
default or (ii) receipt by Company of notice from Agent or any Lender of such
default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of Company or any of its
Subsidiaries in an involuntary case under the Bankruptcy Code or under
any other Insolvency Laws which decree or order is not stayed; or any
other similar relief shall be granted under any applicable Insolvency
Laws; or (ii) an involuntary case shall be commenced against Company
or any of its Subsidiaries under the Bankruptcy Code or under any
other Insolvency Laws; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Company or any of its Subsidiaries, or over all or
a substantial part of its property, shall have been entered; or there
shall have occurred the involuntary appointment of an interim
receiver, trustee or other custodian of Company or any of its
Subsidiaries for all or a substantial part of its property; or a
warrant of attachment, execution or similar process shall have been
issued against any substantial part of the property of Company or any
of its Subsidiaries, and any such event described in this clause (ii)
shall continue for 60 days unless dismissed, bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Company or any of its Subsidiaries shall have an
order for relief entered with respect to it or commence a voluntary
case under the Bankruptcy Code or under any other Insolvency Laws, or
shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case,
under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Company or any of its
Subsidiaries shall make any assignment for the benefit of creditors;
or (ii) Company or any of its Subsidiaries shall be unable, or shall
fail generally, or shall admit in writing its inability, to pay its
debts as such debts become due; or the Board of Directors of Company
or any of its Subsidiaries (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the
actions referred to in clause (i) above or this clause (ii); or
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8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $100,000 or
(ii) in the aggregate at any time an amount in excess of $250,000 (in either
case not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Company or any of its Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of 60 days
(or in any event later than five days prior to the date of any proposed sale
thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company
or any of its Subsidiaries decreeing the dissolution or split up of Company or
that Subsidiary and such order shall remain undischarged or unstayed for a
period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually
or in the aggregate results in or might reasonably be expected to result in
liability of Company or any of its ERISA Affiliates in excess of $100,000
during the term of this Agreement; or there shall exist an amount of unfunded
benefit liabilities (as defined in Section 4001(a)(18) of ERISA), individually
or in the aggregate for all Pension Plans (excluding for purposes of such
computation any Pension Plans with respect to which assets exceed benefit
liabilities), which exceeds $200,000 at any time prior to March 31, 1998, or
$100,000 at any time thereafter; or
8.11 MATERIAL ADVERSE EFFECT.
Any event or change shall occur that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect; or
8.12 CHANGE IN CONTROL.
(i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company to any Person or group
of related Persons for purposes of Section 13(d) of the Exchange Act
(a "Group"), together with any Affiliates thereof (whether or not
otherwise in compliance with the provisions of this Agreement), other
than a wholly owned Guarantor;
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(ii) the approval by the holders of capital stock of the
Company of any plan or proposal for the liquidation or dissolution of
the Company (whether or not otherwise in compliance with the
provisions of this Agreement);
(iii) any Person or Group (other than ▇▇▇▇▇, the Existing
Shareholders, their successors and assigns who are Affiliates, members
of their families and their heirs and executors) shall become the
owner, directly or indirectly, beneficially or of record of shares
representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Company
on a fully diluted basis; or
(iv) during any period of two consecutive years,
individuals who at the beginning of such period constituted the
Company's Board of Directors (together with any new directors whose
election or appointment by such board or whose nomination for election
by the stockholders of the Company was approved by a vote of a
majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Company's Board of Directors
then in office; or
(v) any "Change of Control" (as defined in any of the
Bridge Note Agreement, the Exchange Note Indenture or the Takeout
Securities Indenture) shall occur; or
(vi) ▇▇▇▇▇ shall no longer, directly or indirectly,
beneficially own or control, shares representing at least 51% of the
aggregate ordinary voting power represented by the issued and
outstanding capital stock of Company on a fully diluted basis.
8.13 INVALIDITY OF ANY GUARANTY.
Any Guaranty for any reason, other than the satisfaction in
full of all Obligations, ceases to be in full force and effect (other than in
accordance with its terms) or is declared to be null and void, or any Loan
Party denies that it has any further liability, including without limitation
with respect to future advances by Lenders, under any Loan Document to which it
is a party, or gives notice to such effect; or
8.14 FAILURE OF SECURITY.
Any Collateral Document shall, at any time, cease to be in
full force and effect (other than by reason of a release of Collateral in
accordance with the terms thereof) or shall be declared null and void, or the
validity or enforceability thereof shall be contested by any Loan Party, or
Agent shall not have or
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cease to have a valid and perfected first priority security interest in the
Collateral; or
8.15 ACTION RELATING TO CERTAIN INDEBTEDNESS.
Any event shall occur which, under the terms of the Bridge
Note Agreement, the Exchange Note Indenture or the Takeout Securities
Indenture, as the case may be, shall require Company or any of its Subsidiaries
to purchase, redeem or otherwise acquire or offer to purchase, redeem or
otherwise acquire all or any portion of any such Indebtedness; or Company or
any of its Subsidiaries shall for any other reason purchase, redeem or
otherwise acquire or offer to purchase, redeem or otherwise acquire, or make
any other payments in respect of, all or any portion of any such Indebtedness,
except to the extent expressly permitted by subsection 7.5; or
8.16 FAILURE TO CONSUMMATE RECAPITALIZATION.
The Recapitalization shall not be consummated in accordance
with this Agreement on or prior to the Closing Date, or the Recapitalization
shall be unwound, reversed or otherwise rescinded in whole or in part for any
reason; or
THEN (i) upon the occurrence of any Event of Default described
in subsection 8.6 or 8.7, each of (a) the unpaid principal amount of and
accrued interest on the Loans, (b) an amount equal to the maximum amount that
may at any time be drawn under all Letters of Credit then outstanding (whether
or not any beneficiary under any such Letter of Credit shall have presented, or
shall be entitled at such time to present, the drafts or other documents or
certificates required to draw under such Letter of Credit), and (c) all other
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which
are hereby expressly waived by Company, and the obligation of each Lender to
make any Loan, the obligation of Agent to issue any Letter of Credit and the
right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any
other Event of Default, Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) through (c) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Agent to issue
any Letter of Credit and the right of any Lender to issue any Letter of Credit
hereunder shall thereupon terminate; provided that the foregoing shall not
affect in any way the obligations of Lenders under subsection 3.3C(i).
Any amounts described in clause (b) above, when received by
Agent, shall be held by Agent pursuant to the terms
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of the Collateral Account Agreement and shall be applied as therein provided.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as
a result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to
bind Lenders to a decision which may be made at the election of Requisite
Lenders and are not intended to benefit Company and do not grant Company the
right to require Lenders to rescind or annul any acceleration hereunder, even
if the conditions set forth herein are met.
SECTION 9. AGENT
9.1 APPOINTMENT.
BTCC is hereby appointed Agent hereunder and under the other
Loan Documents and each Lender hereby authorizes Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents.
Agent agrees to act upon the express conditions contained in this Agreement and
the other Loan Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Agent and Lenders and Company shall have no rights as
a third party beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement, Agent shall act solely as an agent
of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Company or
any of its Subsidiaries.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; DUTIES SPECIFIED. Each Lender irrevocably authorizes
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto.
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Agent shall have only those duties and responsibilities that are expressly
specified in this Agreement and the other Loan Documents. Agent may exercise
such powers, rights and remedies and perform such duties by or through its
agents or employees. Agent shall not have, by reason of this Agreement or any
of the other Loan Documents, a fiduciary relationship in respect of any Lender;
and nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon Agent any
obligations in respect of this Agreement or any of the other Loan Documents
except as expressly set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Agent shall not be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or
any other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Agent to Lenders or by or on behalf of
Company to Agent or any Lender in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of Company or any other Person liable for the payment of any
Obligations, nor shall Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents or as to the use
of the proceeds of the Loans or the use of the Letters of Credit or as to the
existence or possible existence of any Event of Default or Potential Event of
Default. Anything contained in this Agreement to the contrary notwithstanding,
Agent shall not have any liability arising from confirmations of the amount of
outstanding Loans or the Letter of Credit Usage or the component amounts
thereof.
C. EXCULPATORY PROVISIONS. Neither Agent nor any of its
officers, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by Agent under or in connection with any of the Loan
Documents except to the extent caused by Agent's gross negligence or willful
misconduct. If Agent shall request instructions from Lenders with respect to
any act or action (including the failure to take an action) in connection with
this Agreement or any of the other Loan Documents, Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have
received instructions from Requisite Lenders. Without prejudice to the
generality of the foregoing, (i) Agent shall be entitled to rely, and shall be
fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for
Company and its Subsidiaries), accountants, experts and other
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professional advisors selected by it; and (ii) no Lender shall have any right
of action whatsoever against Agent as a result of Agent acting or (where so
instructed) refraining from acting under this Agreement or any of the other
Loan Documents in accordance with the instructions of Requisite Lenders. Agent
shall be entitled to refrain from exercising any power, discretion or authority
vested in it under this Agreement or any of the other Loan Documents unless and
until it has obtained the instructions of Requisite Lenders.
D. AGENT ENTITLED TO ACT AS LENDER. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the Letters of
Credit, Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties
and functions delegated to it hereunder, and the term "Lender" or "Lenders" or
any similar term shall, unless the context clearly otherwise indicates, include
Agent in its individual capacity. Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Company or any of its Affiliates as
if it were not performing the duties specified herein, and may accept fees and
other consideration from Company for services in connection with this Agreement
and otherwise without having to account for the same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. Agent
shall not have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of
Lenders or to provide any Lender with any credit or other information with
respect thereto, whether coming into its possession before the making of the
Loans or at any time or times thereafter, and Agent shall not have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Agent, to the extent that Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without
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limitation, counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against
Agent in exercising its powers, rights and remedies or performing its duties
hereunder or under the other Loan Documents or otherwise in its capacity as
Agent in any way relating to or arising out of this Agreement or the other Loan
Documents; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent's gross negligence
or willful misconduct. If any indemnity furnished to Agent for any purpose
shall, in the opinion of Agent, be insufficient or become impaired, Agent may
call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished.
9.5 SUCCESSOR AGENT.
Agent may resign at any time by giving 30 days' prior written
notice thereof to Lenders and Company, and Agent may be removed at any time
with or without cause by an instrument or concurrent instruments in writing
delivered to Company and Agent and signed by Requisite Lenders. Upon any such
notice of resignation or any such removal, Requisite Lenders shall have the
right, upon five Business Days' notice to Company, to appoint a successor
Agent. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent and the retiring or removed Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring or removed
Agent's resignation or removal hereunder as Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
9.6 COLLATERAL DOCUMENTS AND GUARANTIES.
Each Lender hereby further authorizes Agent to enter into each
Collateral Document as secured party on behalf of and for the benefit of
Lenders and agrees to be bound by the terms of each Collateral Document;
provided that, subject to any provision of subsection 10.6 requiring the
consent of any additional Lenders, Agent shall not enter into or consent to any
amendment, modification, termination or waiver of any provision contained in
any Collateral Document or any Guaranty without the prior consent of Requisite
Lenders, but Agent may (i) release any Lien covering any items of Collateral
that are the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have consented and (ii) release any
Guarantor from its Guaranty if all of the capital stock of such Guarantor is
sold to a Person that is not any Affiliate of Company pursuant to a sale or
other disposition permitted hereunder or to which
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Requisite Lenders have consented. Anything contained in any of the Loan
Documents to the contrary notwithstanding, each Lender agrees that no Lender
shall have any right individually to realize upon any of the Collateral under
any Collateral Document or to enforce any of the Guaranties, it being
understood and agreed that all rights and remedies under the Collateral
Documents and the Guaranties may be exercised solely by Agent for the benefit
of Lenders in accordance with the terms thereof.
SECTION 10. MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Subject to subsection 10.1B, each Lender shall have
the right at any time to (i) sell, assign or transfer to any Eligible Assignee,
or (ii) sell participations to any Person in, all or any part of its
Commitments or any Loan or Loans made by it or its Letters of Credit or
participations therein or any other interest herein or in any other Obligations
owed to it; provided that no such sale, assignment, transfer or participation
shall, without the consent of Company, require Company to file a registration
statement with the Securities and Exchange Commission or apply to qualify such
sale, assignment, transfer or participation under the securities laws of any
state; provided, further that no such sale, assignment or transfer described in
clause (i) above shall be effective unless and until an Assignment Agreement
effecting such sale, assignment or transfer shall have been accepted by Agent
and recorded in the Register as provided in subsection 10.1B(ii); and provided,
further that no such sale, assignment, transfer or participation of any Letter
of Credit or any participation therein may be made separately from a sale,
assignment, transfer or participation of a corresponding interest in the
Revolving Loan Commitment and the Revolving Loans of the Lender effecting such
sale, assignment, transfer or participation. Except as otherwise provided in
this subsection 10.1, no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment or transfer of, or any granting of participations in, all or any
part of its Commitments or the Loans, the Letters of Credit or participations
therein, or the other Obligations owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment,
Loan, Letter of Credit or participation therein, or other Obligation
may (a) be assigned in any amount to another Lender, or to an
Affiliate of the assigning Lender or another Lender, with the giving
of notice to Company and Agent or (b) be assigned in an aggregate
amount of not less than $5,000,000 (or such lesser amount as shall
constitute
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the aggregate amount of the Commitments, Loans, Letters of Credit and
participations therein, and other Obligations of the assigning Lender)
to any other Eligible Assignee with the consent of Agent. To the
extent of any such assignment in accordance with either clause (a) or
(b) above, the assigning Lender shall be relieved of its obligations
with respect to its Commitments, Loans, Letters of Credit or
participations therein, or other Obligations or the portion thereof so
assigned. The parties to each such assignment shall execute and
deliver to Agent, for its acceptance and recording in the Register, an
Assignment Agreement, together with a processing and recordation fee
of $3,500 and such forms, certificates or other evidence, if any, with
respect to United States federal income tax withholding matters as the
assignee under such Assignment Agreement may be required to deliver to
Agent pursuant to subsection 2.7B(iii)(a). Upon such execution,
delivery, acceptance and recordation, from and after the effective
date specified in such Assignment Agreement, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a
Lender hereunder and (z) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment Agreement, relinquish its rights and be
released from its obligations under this Agreement, subject to
subsection 10.9B (and, in the case of an Assignment Agreement covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a
party hereto; provided that, anything contained in any of the Loan
Documents to the contrary notwithstanding, if such Lender is the
Issuing Lender with respect to any outstanding Letters of Credit such
Lender shall continue to have all rights and obligations of an Issuing
Lender with respect to such Letters of Credit until the cancellation
or expiration of such Letters of Credit and the reimbursement of any
amounts drawn thereunder). The Commitments hereunder shall be
modified to reflect the Commitment of such assignee and any remaining
Commitment of such assigning Lender and, if any such assignment occurs
after the issuance of the Notes hereunder, the assigning Lender shall,
upon the effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Agent for cancellation,
and thereupon new Notes shall be issued to the assignee and/or to the
assigning Lender, substantially in the form of Exhibit IV annexed
hereto, as the case may be, with appropriate insertions, to reflect
the new Commitments, of the assignee and/or the assigning Lender.
(ii) Acceptance by Agent; Recordation in Register. Upon
its receipt of an Assignment Agreement executed by an
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assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to
in subsection 10.1B(i) and any forms, certificates or other evidence
with respect to United States federal income tax withholding matters
that such assignee may be required to deliver to Agent pursuant to
subsection 2.7B(iii)(a), Agent shall, if Agent and Company have
consented to the assignment evidenced thereby (in each case to the
extent such consent is required pursuant to subsection 10.1B(i)), (a)
accept such Assignment Agreement by executing a counterpart thereof as
provided therein (which acceptance shall evidence any required consent
of Agent to such assignment), (b) record the information contained
therein in the Register, and (c) give prompt notice thereof to
Company. Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection
10.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than
an Affiliate of the Lender granting such participation, shall not be entitled
to require such Lender to take or omit to take any action hereunder except
action directly affecting (i) the extension of the scheduled final maturity
date of any Loan allocated to such participation or (ii) a reduction of the
principal amount of or the rate of interest payable on any Loan allocated to
such participation, and all amounts payable by Company hereunder (including
without limitation amounts payable to such Lender pursuant to subsections 2.6D,
2.7 and 3.6) shall be determined as if such Lender had not sold such
participation. Company and each Lender hereby acknowledges and agrees that,
solely for purposes of subsections 10.4 and 10.5, (a) any participation will
give rise to a direct obligation of Company to the participant and (b) the
participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that (i) no Lender shall, as between
Company and such Lender, be relieved of any of its obligations hereunder as a
result of any such assignment and pledge and (ii) in no event shall such
Federal Reserve Bank be considered to be a "Lender" or be entitled to require
the assigning Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including
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prospective assignees and participants), subject to subsection 10.19.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Company (including without limitation
any opinions requested by Lenders as to any legal matters arising hereunder)
and of Company's performance of and compliance with all agreements and
conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including, without limitation, with respect to
confirming compliance with environmental and insurance requirements; (iii) the
reasonable fees, expenses and disbursements of counsel to Agent (including
allocated costs of internal counsel) in connection with the negotiation,
preparation, execution and administration of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Company; (iv) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Agent on
behalf of Lenders pursuant to the Loan Documents, including without limitation
costs of conducting record searches, examining Collateral, opening bank
accounts and lockboxes, depositing checks, receiving and transferring funds
(including charges for checks for which there are insufficient funds), and fees
and taxes in connection with the filing of financing statements, costs of
preparing and recording Loan Documents, fees and expenses of counsel for
providing such opinions as Agent or Requisite Lenders may reasonably request,
and fees and expenses of legal counsel to Agent; (v) all other actual and
reasonable costs and expenses incurred by Agent in connection with the
syndication of the Commitments and the negotiation, preparation and execution
of the Loan Documents and any consents, amendments, waivers or other
modifications thereto and the transactions contemplated thereby; and (vi) after
the occurrence of an Event of Default, all costs and expenses, including
reasonable attorneys' fees (including allocated costs of internal counsel) and
costs of settlement, incurred by Agent and Lenders in enforcing any Obligations
of or in collecting any payments due from any Loan Party hereunder or under the
other Loan Documents by reason of such Event of Default or in connection with
any refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
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10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless Agent and Lenders,
and the officers, directors, employees, agents and affiliates of Agent and
Lenders (collectively called the "INDEMNITEES") from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including without limitation the reasonable fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by any Person,
whether or not any such Indemnitee shall be designated as a party or a
potential party thereto), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including without limitation securities and commercial laws, statutes, rules
or regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of this Agreement
or the other Loan Documents or the Related Agreements or the transactions
contemplated hereby or thereby (including without limitation Lenders' agreement
to make the Loans hereunder or the use or intended use of the proceeds of any
of the Loans or the issuance of Letters of Credit hereunder or the use or
intended use of any of the Letters of Credit) or the statements contained in
the commitment letter delivered by any Lender to Company with respect thereto
(collectively called the "INDEMNIFIED LIABILITIES"); provided that Company
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise from
the gross negligence or willful misconduct of that Indemnitee as determined by
a final judgment of a court of competent jurisdiction. To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Company shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them.
Without limiting the generality of the foregoing, Company
further agrees to fully and promptly pay, perform, discharge, defend (subject
to Indemnitee's selection of counsel), indemnify and hold harmless each
Indemnitee from and against any Indemnified Environmental Liabilities; provided
that Company shall not have any obligation to any Indemnitee hereunder with
respect to any Indemnified Environmental Liabilities to the extent such
Indemnified Environmental Liabilities arise from the gross negligence or
willful misconduct of that Indemnitee as
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determined by a final judgment of a court of competent jurisdiction. To the
extent that the undertaking to defend, indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is violative of
any law or public policy, Company shall contribute the maximum portion that it
is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Environmental Liabilities incurred by the
Indemnitees or any of them. As used herein, "INDEMNIFIED ENVIRONMENTAL
LIABILITIES" means any liabilities, obligations, losses, damages (including,
without limitation, natural resource damages), penalties, actions, judgments,
suits, claims (including Environmental Claims), costs (including, without
limitation, the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation, or other response action necessary to
remove, remediate, clean up, or ▇▇▇▇▇ any Hazardous Materials or any activity
relating to Hazardous Materials that is in violation of any Environmental Laws
or that presents a material risk of giving rise to an Environmental Claim),
expenses and disbursements of any kind or nature whatsoever, whether direct,
indirect or consequential and whether based on any federal, state or foreign
laws, statutes, rules or regulations (including without limitation securities
and commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of: (i) any Release, threatened Release or disposal
of any Hazardous Materials at any of the Facilities; (ii) the Release,
threatened Release, or disposal at any location of any Hazardous Materials
generated at or originating from any of the Facilities by or at the direction
of Company or any of its Subsidiaries; (iii) any Environmental Claim in
connection with any of the Facilities; or (iv) the operation of or violation of
any Environmental Law at any of the Facilities.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default and after
consultation with Agent each Lender is hereby authorized by Company at any time
or from time to time, without prior notice to Company or to any other Person,
any such prior notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender to or for the credit or
the account of Company against and on account of the obligations and
liabilities of Company to that Lender under this Agreement, the Letters of
Credit and participations therein and the other Loan
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Documents, including, but not limited to, all claims of any nature or
description arising out of or connected with this Agreement, the Letters of
Credit and participations therein or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Company hereby further grants to
Agent and each Lender a security interest in all deposits and accounts
maintained with Agent or such Lender as security for the Obligations.
10.5 RATABLE SHARING.
AMOUNTS OWED BY COMPANY. Lenders hereby agree among
themselves that if any of them shall, whether by voluntary payment, by
realization upon security, through the exercise of any right of set-off or
banker's lien, by counterclaim or cross action or by the enforcement of any
right under the Loan Documents or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code or under any other
Insolvency Laws, receive payment or reduction of a proportion of the aggregate
amount of principal, interest, amounts payable in respect of Letters of Credit,
fees and other amounts then due and owing to that Lender from Company hereunder
or under the other Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE
FROM COMPANY" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due From Company to such
other Lender, then the Lender receiving such proportionately greater payment
shall (i) notify Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the
Aggregate Amounts Due From Company to the other Lenders so that all such
recoveries of Aggregate Amounts Due From Company shall be shared by all Lenders
in proportion to the Aggregate Amounts Due From Company to them; provided that
if all or part of such proportionately greater payment received by such
purchasing Lender is thereafter recovered from such Lender upon the bankruptcy
or reorganization of Company or otherwise, those purchases shall be rescinded
and the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by Company to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.
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10.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, and no consent to any departure by
Company therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that any such amendment,
modification, termination, waiver or consent which: increases the amount of the
Commitments or reduces the principal amount of any of the Loans or reduces any
Letter of Credit reimbursement obligations; changes in any manner the
definition of "Pro Rata Share" or the definition of "Requisite Lenders";
changes in any manner the provisions contained in the second paragraph of
subsection 2.1C(ii); changes in any manner any provision of this Agreement
which, by its terms, expressly requires the approval or concurrence of all
Lenders; postpones the scheduled final maturity date (but not the date of any
scheduled installment of principal) of any of the Loans or postpones any date
faxed for any payment in respect of Letter of Credit reimbursement obligations;
postpones the date on which any interest or any fees are payable; decreases the
interest rate borne by any of the Loans (other than any waiver of any increase
in the interest rate applicable to any of the Loans pursuant to subsection
2.2E) or the amount of any fees payable hereunder (other than fees which are
exclusively for the account of the Agent or Issuing Lender); increases the
advance rate with respect to Revolving Loans (except for the restoration by the
Agent of an advance rate in whole or in part to its original level after the
prior reduction thereof by the Agent); except as otherwise expressly provided
in this Agreement, and other than in connection with the financing,
refinancing, sale or other disposition of any asset of the Company or any of
its Subsidiaries permitted under this Agreement, releases any Liens in favor of
the Lenders on any of the Collateral; or changes in any manner the provisions
contained in subsection 8.1 or this subsection 10.6 shall be effective only if
evidenced by a writing signed by or on behalf of all Lenders. In addition, (i)
no amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the Lender which is the
holder of that Note and (ii) no amendment, modification, termination or waiver
of any provision of Section 9 or of any other provision of this Agreement
which, by its terms, expressly requires the approval or concurrence of Agent
shall be effective without the written concurrence of Agent. Agent may, but
shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of that Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on Company in
any case shall entitle Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this subsection 10.6 shall be
binding
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upon each Lender at the time outstanding, each future Lender and, if signed by
Company, on Company.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in
writing and may be personally served, telexed or sent by telefacsimile or
United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of telefacsimile
or telex, or three Business Days after depositing it in the United States mail
with postage prepaid and properly addressed; provided that notices to Agent
shall not be effective until received. For the purposes hereof, the address of
each party hereto shall be as set forth under such party's name on the
signature pages hereof or (i) as to Company and Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of
the Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Company set forth in subsections 2.6D, 2.7,
3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4, 10.5, and 10.19 shall survive the payment of the Loans,
the cancellation or expiration of the Letters of Credit and the reimbursement
of any amounts drawn thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or
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privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement and
the other Loan Documents are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Agent or Lenders (or to Agent for the benefit of
Lenders), or Agent or Lenders enforce any security interests or exercise their
rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by Lenders pursuant hereto or thereto, shall be deemed to
constitute Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
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10.14 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the permitted successors and permitted assigns of Lenders
(it being understood that Lenders' rights of assignment are subject to
subsection 10.1). None of Company's rights or obligations hereunder nor any
interest therein may be assigned or delegated by Company without the prior
written consent of all Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OBLIGATION
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT COMPANY
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER
LOAN DOCUMENT OR SUCH OBLIGATION. Company hereby agrees that service of all
process in any such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to Company at its address provided in
subsection 10.8, such service being hereby acknowledged by Company to be
sufficient for personal jurisdiction in any action against Company in any such
court and to be otherwise effective and binding service in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Lender to bring proceedings
against Company in the courts of any other jurisdiction.
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10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of
this waiver is intended to be all-encompassing of any and all disputes that may
be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in
their related future dealings. Each party hereto further warrants and
represents that it has reviewed this waiver with its legal counsel and that it
knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement in accordance with such Lender's
customary procedures for handling confidential information of this nature and
in accordance with safe and sound banking practices, it being understood and
agreed by Company that in any event a Lender may after the proposed recipient
of such information has agreed to be bound by this subsection 10.19, make
disclosures to Affiliates of such Lender or disclosures reasonably required by
any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any Loans or any
participations therein or disclosures required or requested by any governmental
agency or representative thereof or pursuant to legal process; provided that,
unless specifically prohibited by applicable law or court order, each Lender
shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure
of such information; and
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provided, further that in no event shall any Lender be obligated or required to
return any materials furnished by Company or any of its Subsidiaries.
10.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Company and Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
COMPANY:
FWT, INC.
By:
---------------------------------
Title:
------------------------------
Notice Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
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LENDERS:
BT COMMERCIAL CORPORATION,
as a Lender and as Agent
By:
---------------------------------
Title:
------------------------------
Notice Address:
NOTICE:
BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop #4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Bhartai Baliga
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
DOMESTIC LENDING OFFICE:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Bharti Baliga
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
EURODOLLAR LENDING OFFICE:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Bharti Baliga
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
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BANKERS TRUST COMPANY,
as an Issuing Lender
By:
---------------------------------
Title:
-------------------------------
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
--------------------------
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT I
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to that certain Credit Agreement dated as of November
12, 1997, as amended, supplemented or otherwise modified to the date hereof
(said Credit Agreement, as so amended, supplemented or otherwise modified,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among FWT, Inc., a
Texas corporation ("COMPANY"), the financial institutions listed therein as
Lenders ("LENDERS"), and BT Commercial Corporation, as Agent ("AGENT"), this
represents Company's request to borrow from Lenders as follows:
1. Requested Funding Date: ___________________, _________
2. Amount of borrowing: $___________________
3. Type of Loans: Revolving Loans
4. Interest rate option: [ ] a. Base Rate Loan(s)
[ ] b. Eurodollar Rate Loans with an
initial Interest Period of
____________ month(s)
The proceeds of such Loans are to be credited to the account of the Company at
the Funding and Payment Office.
The undersigned hereby, to the best of his or her knowledge,
certifies that:
(i) The representations and warranties contained in the
Credit Agreement and the other Loan Documents are true, correct and
complete in all material respects on and as of the date hereof to the
same extent as though made on and as of the date hereof, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were
true, correct and complete in all material respects on and as of such
earlier date;
(ii) No event has occurred and is continuing or would
result from the consummation of the borrowing contemplated hereby that
would constitute an Event of Default or a Potential Event of Default;
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(iii) Company has performed in all material respects all
agreements and satisfied all conditions which the Credit Agreement
provides shall be performed or satisfied by it on or before the date
hereof; and
(iv) After giving effect to the requested Loans, the Total
Utilization of Revolving Loan Commitments will not exceed the Revolving
Loan Commitments then in effect and the Borrowing Base then in effect.
DATED: FWT, INC.
----------------------
By:
--------------------------
Title:
-----------------------
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EXHIBIT II
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Credit Agreement dated as of November
12, 1997, as amended, supplemented or otherwise modified to the date hereof
(said Credit Agreement, as so amended, supplemented or otherwise modified,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among FWT, Inc., a
Texas corporation ("COMPANY"), the financial institutions listed therein as
Lenders ("LENDERS"), and BT Commercial Corporation, as Agent ("AGENT"), this
represents Company's request to convert or continue Loans as follows:
1. Date of conversion/continuation: __________________, _______
2. Amount of Loans being converted/continued: $___________________
3. Type of Loans being Revolving Loans
converted/continued:
4. Nature of conversion/continuation:
[ ] a. Conversion of Base Rate Loans to Eurodollar Rate
Loans
[ ] b. Conversion of Eurodollar Rate Loans to Base
Rate Loans
[ ] c. Continuation of Eurodollar Rate Loans as such
5. If Loans are being continued as or converted to Eurodollar Rate
Loans, the duration of the new Interest Period that commences
on the conversion/ continuation date: _______________
month(s)
In the case of a conversion to or continuation of Eurodollar
Rate Loans, the undersigned hereby, to the best of his or her knowledge,
certifies that no Event of Default or Potential Event of Default has occurred
and is continuing under the Credit Agreement.
DATED: FWT, INC.
---------------------
By:
--------------------------
Title:
-----------------------
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EXHIBIT III
[FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT]
REQUEST FOR ISSUANCE OF LETTER OF CREDIT
Pursuant to that certain Credit Agreement dated as of November
12, 1997, as amended, supplemented or otherwise modified to the date hereof
(said Credit Agreement, as so amended, supplemented or otherwise modified,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among FWT, Inc., a
Texas corporation ("COMPANY"), the financial institutions listed therein as
Lenders ("LENDERS"), and BT Commercial Corporation, as Agent ("AGENT"), this
represents Company's request for the issuance of a Letter of Credit by BTCo as
follows:
1. Date of issuance of Letter of Credit: ________________, ______
2. Face amount of Letter of Credit: $________________________
3. Expiration date of Letter of Credit: ________________, ________
4. Name and address of beneficiary:
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
5. Attached hereto is:
[ ] a. the verbatim text of such proposed Letter of Credit
[ ] b. the proposed terms and conditions of such Letter of
Credit, including a precise description of any
documents to be presented by the beneficiary which, if
presented by the beneficiary prior to the expiration
date of such Letter of Credit, would require the
Issuing Lender to make payment under such Letter of
Credit.
The undersigned hereby, to the best of his or her knowledge,
certifies that:
(i) The representations and warranties contained in the
Credit Agreement and the other Loan Documents are true, correct and
complete in all material respects on and as of the date hereof to the
same extent as though made on and as of the date hereof, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were
true, correct and complete in all material respects on and as of such
earlier date;
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(ii) No event has occurred and is continuing or would
result from the issuance of the Letter of Credit contemplated hereby
that would constitute an Event of Default or a Potential Event of
Default;
(iii) The Company has performed in all material respects all
agreements and satisfied all conditions which the Credit Agreement
provides shall be performed or satisfied by it on or before the date
hereof; and
(iv) After giving effect to the requested Letter of Credit,
the Total Utilization of Revolving Loan Commitments will not exceed the
Revolving Loan Commitments then in effect and the Borrowing Base then
in effect.
DATED: FWT, INC.
----------------------
By:
--------------------------
Title:
-----------------------
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EXHIBIT IV
[FORM OF REVOLVING NOTE]
FWT, INC.
PROMISSORY NOTE DUE NOVEMBER 30, 2000
$[1] [2]
November 12, 1997
FOR VALUE RECEIVED, FWT, INC., a Texas corporation ("COMPANY"),
promises to pay to [3] ("PAYEE") or its registered assigns, on or before
November 30, 2000, the lesser of (x) [4] ($[1]) and (y) the unpaid principal
amount of all advances made by Payee to Company as Revolving Loans under the
Credit Agreement referred to below.
Company also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Credit Agreement dated as of November 12, 1997 by and among FWT, Inc.,
a Texas corporation, the financial institutions listed therein as Lenders, and
BT Commercial Corporation, as Agent (said Credit Agreement, as it may be
amended, supplemented or otherwise modified from time to time, being the
"CREDIT AGREEMENT", the terms defined therein and not otherwise defined herein
being used herein as therein defined).
This Note is one of Company's "Revolving Notes" in the
aggregate principal amount of $25,000,000 and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Revolving Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the Funding and Payment Office or at such other place as shall be designated
in writing for such purpose in accordance with the terms of the Credit
Agreement. Unless and until an Assignment Agreement
------------------------------
[1] Insert amount of Lender's Revolving Loan Commitment in numbers.
[2] Insert place of delivery of Note.
[3] Insert Lender's name in capital letters.
[4] Insert amount of Lender's Revolving Loan Commitment in words.
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effecting the assignment or transfer of this Note shall have been accepted by
Agent and recorded in the Register as provided in subsection 10.1B(ii) of the
Credit Agreement, Company and Agent shall be entitled to deem and treat Payee
as the owner and holder of this Note and the Loans evidenced hereby. Payee
hereby agrees, by its acceptance hereof, that before disposing of this Note or
any part hereof it will make a notation hereon of all principal payments
previously made hereunder and of the date to which interest hereon has been
paid; provided, however, that the failure to make a notation of any payment
made on this Note shall not limit or otherwise affect the obligations of
Company hereunder with respect to payments of principal of or interest on this
Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to prepayment as provided in subsection
2.4A of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of
this Note or the Credit Agreement shall alter or impair the obligations of the
Company which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the
currency herein prescribed.
Company promises to pay all costs and expenses, including
reasonable attorneys' fees, to the extent provided in subsection 10.2 of the
Credit Agreement, incurred in the collection and enforcement of this Note.
Company and any endorsers of this Note hereby consent to renewals and
extensions of time at or after the maturity hereof, without
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notice, and hereby waive diligence, presentment, protest, demand and notice of
every kind and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, Company has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
FWT, INC.
By:
----------------------------------------
Title:
-------------------------------------
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TRANSACTIONS
ON
REVOLVING NOTE
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- ----------- ------------- --------------- --------------- -------
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EXHIBIT V
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY THAT:
(1) We are the duly elected [Title] and [Title] of FWT,
Inc., a Texas corporation ("COMPANY");
(2) We have reviewed the terms of that certain Credit
Agreement dated as of November 12, 1997, as amended, supplemented or
otherwise modified to the date hereof (said Credit Agreement, as so
amended, supplemented or otherwise modified, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined in this
Certificate (including Attachment No. 1 annexed hereto and made a part
hereof) being used in this Certificate as therein defined), by and
among Company, the financial institutions listed therein as Lenders,
and BT Commercial Corporation, as Agent, and the terms of the other
Loan Documents, and we have made, or have caused to be made under our
supervision, a review in reasonable detail of the transactions and
condition of Company and its Subsidiaries during the accounting period
covered by the attached financial statements; and
(3) The examination described in paragraph (2) above did
not disclose, and we have no knowledge of, the existence of any
condition or event which constitutes an Event of Default or Potential
Event of Default during or at the end of the accounting period covered
by the attached financial statements or as of the date of this
Certificate[, except as set forth below].
[Set forth [below] [in a separate attachment to this
Certificate] are all exceptions to paragraph (3) above listing, in detail, the
nature of the condition or event, the period during which it has existed and
the action which Company has taken, is taking, or proposes to take with respect
to each such condition or event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------]
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The foregoing certifications, together with the computations
set forth in Attachment No. 1 annexed hereto and made a part hereof and the
financial statements delivered with this Certificate in support hereof, are
made and delivered this __________ day of _____________, ______ pursuant to
subsection 6.1(iv) of the Credit Agreement.
FWT, INC.
By:
-----------------------------------------
Title:
--------------------------------------
By:
-----------------------------------------
Title:
--------------------------------------
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ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a
Compliance Certificate dated as of ____________, _____ and pertains to the
period from ____________, 199_ to ____________, _____. Subsection references
herein relate to subsections of the Credit Agreement.
A. INDEBTEDNESS
1. Indebtedness in respect of Capital Leases
or purchase money Indebtedness: $_____________
2. Maximum Indebtedness in respect of Capital
Leases and purchase money Indebtedness
permitted under subsection 7.1(iii): $_____________
3. Aggregate outstanding amount of Purchase
Price Adjustment Notes: $_____________
4. Maximum permitted amount of Purchase
Price Adjustment Notes: $10,000,000
5. Other Indebtedness outstanding under
subsection 7.1(vi): $_____________
6. Maximum other Indebtedness permitted under
subsection 7.1(vi): $250,000
B. LIENS
1. Indebtedness secured by Liens under
subsection 7.2A(v): $_____________
2. Maximum permitted under subsection 7.2A(v): $100,000
C. INVESTMENTS
1. Investments under subsection 7.3(vi): $_____________
2. Maximum permitted under subsection 7.3(vi): $1,000,000
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D. CONTINGENT OBLIGATIONS
1. Currency Agreements outstanding under
subsection 7.4(vi): $_____________
2. Maximum permitted amount of Currency
Agreements permitted under subsection 7.4(vi): $1,000,000
3. Contingent Obligations under subsection 7.4(vii): $_____________
4. Maximum permitted under subsection 7.4(vii): $100,000
E. MINIMUM INTEREST COVERAGE RATIO (for the four-Fiscal Quarter
period ending _____________, _____)
1. Consolidated Net Income: $_____________
2. Consolidated Interest Expense: $_____________
3. Provisions for taxes based on income: $_____________
4. Total depreciation expense: $_____________
5. Total amortization expense: $_____________
6. Other non-cash items reducing Consolidated
Net Income: $_____________
7. Other non-cash items increasing Consolidated
Net Income: $_____________
8. Consolidated EBITDA (1+2+3+4+5+6-7): $_____________
9. Interest Coverage Ratio (8):(2): ____:1.00
10. Minimum ratio required under subsection 7.6A: ____:1.00
F. MAXIMUM LEVERAGE RATIO (as of _____________, _____)
1. Consolidated Total Debt: $_____________
2. Consolidated EBITDA (E.8 above): $_____________
3. Leverage Ratio (1):(2): ____:1.00
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4. Maximum ratio permitted under subsection 7.6B: ____:1.00
G. MINIMUM CONSOLIDATED EBITDA (for the four-Fiscal Quarter
period ending ____________, _____)
1. Consolidated EBITDA (E.8 above): $_____________
2. Minimum required under subsection 7.6C: $_____________
H. FUNDAMENTAL CHANGES
1. Aggregate fair market value of assets sold in
Asset Sale during Fiscal Year under subsection
7.7(iv): $_____________
2. Maximum permitted under subsection 7.7(iv): $250,000
I. CONSOLIDATED CAPITAL EXPENDITURES
1. Consolidated Capital Expenditures for Fiscal
Year-to-date: $_____________
2. Maximum Consolidated Capital Expenditures
permitted under subsection 7.8: $_____________
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EXHIBIT VI
[FORM OF FINANCIAL CONDITION CERTIFICATE]
FINANCIAL CONDITION CERTIFICATE
This FINANCIAL CONDITION CERTIFICATE (this "CERTIFICATE") is
delivered in connection with that certain Credit Agreement dated as of November
12, 1997 (the "CREDIT AGREEMENT") by and among FWT, Inc., a Texas corporation
("COMPANY"), the financial institutions referred to therein as Lenders
("LENDERS") and BT Commercial Corporation, as Agent ("AGENT"). Capitalized
terms used herein without definition have the same meanings as in the Credit
Agreement.
A. I am, and at all pertinent times mentioned herein have
been, the duly qualified and acting chief executive officer of Company. In
such capacity I am a senior officer of Company and I have participated actively
in the management of its financial affairs and am familiar with its financial
statements and those of its Subsidiaries. I have, together with other officers
of Company, acted on behalf of Company in connection with the negotiation of
the Credit Agreement and I am familiar with the terms and conditions thereof.
B. I have carefully reviewed the contents of this
Certificate, and I have conferred with counsel for Company for the purpose of
discussing the meaning of its contents.
C. In connection with preparing for the consummation of
the transactions and financings contemplated by the Credit Agreement (the
"PROPOSED TRANSACTIONS"), I have participated in the preparation of, and I have
reviewed, pro forma projections of net income and cash flows for Company and
its Subsidiaries for the fiscal years of Company ending April 30, 1998 through
April 30, 2002, inclusive (the "PROJECTED FINANCIAL STATEMENTS"). The
Projected Financial Statements give effect to the consummation of the Proposed
Transactions and assume that the debt obligations of Company will be paid from
the cash flow generated by the operations of Company and other cash resources.
The Projected Financial Statements were prepared on the basis of information
available at July 31, 1997. I know of no facts that have occurred since such
date that would lead me to believe that the Projected Financial Statements are
inaccurate in any material respect. The Projected Financial Statements do not
reflect (i) any potential changes in interest rates from those assumed in the
Projected Financial Statements, (ii) any potential material, adverse changes in
general business conditions, or (iii) any potential changes in income tax laws.
D. I have also participated in the preparation of, and I
have reviewed, a pro forma summary balance sheet of Company and its
Subsidiaries (the "FAIR VALUE SUMMARY BALANCE SHEET") as of November 12, 1997,
the expected Closing Date, giving
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effect to the Proposed Transactions. The Fair Value Summary Balance Sheet has
been prepared as described in paragraphs F and G below and not in accordance
with GAAP.
E. In connection with the preparation of the Projected
Financial Statements, I have made such investigations and inquiries as I have
deemed necessary and prudent therefor and, specifically, have relied on
historical information with respect to revenues, expenses and other relevant
items supplied by the supervisory personnel of Company directly responsible for
the various operations involved. The assumptions upon which the Projected
Financial Statements are based are stated therein. Although any assumptions
and any projections by necessity involve uncertainties and approximations, I
believe, based on my discussions with other members of management, that the
assumptions on which the Projected Financial Statements are based are
reasonable. Based thereon, I believe that the projections for Company, taken
as a whole, reflected in the Projected Financial Statements provide reasonable
estimations of future performance, subject, as stated above, to the
uncertainties and approximations inherent in any projections.
F. The Fair Value Summary Balance Sheet has been prepared
in a manner which I believe reflects a conservative estimate of the fair value
of the assets of Company and the probable liability on all of its debts,
contingent or otherwise. For purposes of this Certificate, I understand "fair
value" of any assets to mean the amount which may be realized within a
reasonable time, either through collection of such assets or through sale of
such assets at the regular market value thereof, conceiving of the latter as
the amount which could be obtained for the property in question within such
period by a capable and diligent businessman from an interested buyer who is
willing to purchase under ordinary selling conditions. The specific
methodology used by management for valuing Company is set forth in paragraph G
below.
G. For purposes of constructing the Fair Value Summary
Balance Sheet, I have utilized the following procedures:
With respect to the asset values reflected in the Fair Value
Summary Balance Sheet, I have relied on the analysis of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇ as set forth in its letter of November 12, 1997, a copy of which is
attached hereto as Exhibit C.
With respect to liabilities reflected in the Fair Value Summary
Balance Sheet, I have included long-term liabilities reported by Company in its
September 30, 1997 financial statements and debts to be incurred or assumed by
Company under the Credit Agreement and the Proposed Transactions. In addition,
with respect to contingent liabilities (such as litigation, guaranties and
pension plan liabilities), I have consulted with legal, financial and other
personnel of Company and have reflected as liabilities our best judgment as to
the maximum exposure that can reasonably be expected to result therefrom in
light of all the facts and circumstances existing at this time, recognizing
that any such estimation is inherently subject to uncertainties.
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Based on the foregoing, I have reached the following
conclusions:
1. Company is not now, nor will the incurrence of the
Obligations under the Credit Agreement and the incurrence of the other
obligations contemplated by the Proposed Transactions render Company
"insolvent" as defined in this paragraph 1. The recipients of this
Certificate and I have agreed that, in this context, "insolvent" means
that the present fair value of assets is less than the amount that will
be required to pay the probable liability on existing debts as they
become absolute and matured. We have also agreed that the term "debts"
includes any legal liability, whether matured or unmatured, liquidated
or unliquidated, absolute, fixed or contingent. My conclusion
expressed above is supported by the Fair Value Summary Balance Sheet.
Valuation of Company on the basis thereof would reflect the net value
of Company as being at least $20,000,000.
2. By the incurrence of the Obligations under the Credit
Agreement and the incurrence of the other obligations contemplated by
the Proposed Transactions, Company will not incur debts beyond its
ability to pay as such debts mature. I have based my conclusion in
part on the Projected Financial Statements, which demonstrate that
Company will have positive cash flow after paying all of its scheduled
anticipated indebtedness (including any scheduled payments under the
Credit Agreement, the other obligations contemplated by the Proposed
Transactions and other permitted indebtedness). I have concluded that
the realization of current assets in the ordinary course of business
will be sufficient to pay recurring current debt and short-term and
long-term debt service as such debts mature, and that the cash flow
(including earnings plus non-cash charges to earnings) will be
sufficient to provide cash necessary to repay the Loans and other
Obligations under the Credit Agreement, the other obligations
contemplated by the Proposed Transactions and other long-term
indebtedness as such debt matures.
3. The incurrence of the Obligations under the Credit
Agreement and the incurrence of the other obligations contemplated by
the Proposed Transactions will not leave Company with property
remaining in its hands constituting "unreasonably small capital." In
reaching this conclusion, I understand that "unreasonably small
capital" depends upon the nature of the particular business or
businesses conducted or to be conducted, and I have reached my
conclusion based on the needs and anticipated needs for capital of the
businesses conducted or anticipated to be conducted by Company and its
Subsidiaries in light of the Projected Financial Statements and
available credit capacity.
4. To the best of my knowledge, Company has not executed
the Credit Agreement or any documents mentioned therein, or made any
transfer or incurred any obligations thereunder, with actual intent to
hinder, delay or defraud either present or future creditors.
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I understand that Agent and Lenders are relying on the truth
and accuracy of the foregoing in connection with the extension of credit to
Company pursuant to the Credit Agreement.
I represent the foregoing information to be, to the best of my
knowledge and belief, true and correct and execute this Certificate this 12th
day of November, 1997.
FWT, INC.
By:
----------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
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EXHIBIT VII
[FORM OF BORROWING BASE CERTIFICATE]
BORROWING BASE CERTIFICATE
[DATE]
Reference is made to the Credit Agreement dated as of November
12, 1997 (as it may be amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT") by and among FWT, INC., a Texas corporation
("COMPANY"), the Lenders listed on the signature pages thereof, and BT
COMMERCIAL CORPORATION, as Agent. Terms defined in the Credit Agreement and
undefined herein are used herein as defined therein.
Pursuant to subsection [4.1L][6.1(xix)] of the Credit
Agreement, the undersigned Chief Financial Officer of Company, hereby certifies
that attached hereto as Annex 1 is a true and accurate calculation of the
Borrowing Base as of __________, _____ determined in accordance with the
requirements of the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has caused this certificate
to be duly executed as of ____________, ____.
FWT, INC.
By:
-------------------------------------
Name:
---------------------------
Title:
--------------------------
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ANNEX 1 TO
FWT, INC.
BORROWING BASE CERTIFICATE
(000'S)
Borrowing Base Certificate #: _______________ As of Date: _______________
Total
-----------------
I. RECEIVABLES
A. Total Accounts Receivable (Note: parenthetical references are to
-----------------
clauses in the definition of "Eligible Accounts Receivable")
Less:
Sales to Affiliate(a)
-----------------
Pymt. Terms more than 30 days(b)
-----------------
Unpaid more than 60 days (or 90 days first 9 mos.)(c)
-----------------
50% or more of Account Debtor Past Due(d)
-----------------
Accounts exceed 25% of A/R of Loan Parties(e)
-----------------
Subject to a claim or setoff(f)
-----------------
Insolvency Event Accounts(g)
-----------------
Non-US Dollar/Foreign Accounts(h)
-----------------
▇▇▇▇/Hold; Sale/Return; Consignment(i)
-----------------
Uncertain Collection(j)
-----------------
Account Debtor is U.S. Government(k)
-----------------
Goods not Shipped, Delivered, Accepted (valid sale)(l)
-----------------
Account not comply legal requirements(m)
-----------------
Account subject to Security Deposit(n)
-----------------
Account not subject to first priority Lien for Agent(o)
-----------------
Other Ineligibility Imposed by Agent
-----------------
B. Total Ineligible Accounts
-----------------
▇. ▇▇▇▇▇ Eligible Accounts (I.A. - I.B.)
-----------------
D. Less:
Returns, discounts, deductions, claims, credits, etc.
-----------------
E. Net Eligible Accounts (I.C. - I.D.)
-----------------
II. INVENTORY
A. Total Inventory (Note: parenthetical references are to clauses in
-----------------
the definition of "Eligible Inventory")
Less:
Inventory not owned solely by Loan Party(a)
-----------------
Inventory not located in the U.S.(b)
-----------------
Annex 1
1
163
Inventory not located on property of Loan Party(c)
-----------------
Inventory not subject to first priority Lien for Agent(d)
-----------------
Inventory returned by third party or in transit(e)
-----------------
Inventory not first-quality goods(f)
-----------------
Other Ineligibility imposed by Agent
-----------------
B. Total Ineligible Inventory
-----------------
C. Eligible Inventory (II.A. - II.B.)
-----------------
III. BORROWING BASE
A.1. Net Eligible Accounts (I.E.)
-----------------
2. Multiplied by Advance Rate of 85% 0.85
3. Total Accounts Availability (III.A.1. x .085)
-----------------
B.1. Eligible Inventory (II.C)
-----------------
2. Multiplied by Advance Rate of 60% 0.60
3. Total Inventory Availability
-----------------
C. Total Borrowing Base Availability (III.A.3. + III.B.3.)
-----------------
1. Less:
Reserve Established by Agent
-----------------
D. Net Borrowing Base (III.C. - III.C.1.)
-----------------
E. Loans outstanding
-----------------
F. Letter of Credit Obligations
-----------------
G. TOTAL UTILIZATION (III.E. + III.F.)
-----------------
H. NET AVAILABILITY FOR COMPANY
-----------------
(III.D minus III.G)
-----
Annex 1
2
164
EXHIBIT VIII
[FORM OF OPINION OF AKIN, GUMP, STRAUSS, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.]
November ___, 1997
BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop #4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Bhartai Baliga
and
The Lenders Listed on
Schedule A Hereto
Re: Credit Agreement dated as of November __, 1997 among
FWT, Inc., the financial institutions listed therein
as Lenders, and BT Commercial Corporation, as Agent
Ladies and Gentlemen:
We have acted as counsel to FWT, Inc., a Texas corporation
("Company"), in connection with that certain Credit Agreement dated as of
November __, 1997 among Company, the financial institutions listed therein as
Lenders ("Lenders"), and BT Commercial Corporation, as Agent ("Agent"). This
opinion is rendered to you in compliance with subsection 4.1M of the Credit
Agreement. Capitalized terms used herein without definition have the same
meanings as in the Credit Agreement.
In our capacity as such counsel, we have examined originals, or
copies identified to our satisfaction as being true copies, of such records,
documents or other instruments as in our judgment are necessary or appropriate
to enable us to render the opinions expressed below. These records, documents
and instruments included the following:
(a) The Certificate of Incorporation of Company, as
amended to date;
(b) The Bylaws of Company, as amended to date;
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(c) All records of proceedings and actions of the Board of
Directors of Company relating to the Credit Agreement, the other Loan
Documents and the Related Agreements (as hereinafter defined) and the
transactions contemplated thereby;
(d) The Credit Agreement;
(e) Revolving Notes delivered today (the "Notes");
(f) the Company Pledge Agreement;
(g) the Company Security Agreement;
(h) the Company Trademark Security Agreement;
(i) the Company Patent Security Agreement;
(j) the Collateral Account Agreement;
(k) the Blocked Account Agreement and the Lock Box
Agreement (collectively, the "Controlled Account
Agreements");
(l) the Collateral Access Agreement;
(m) the Intercreditor Agreement;
(n) the UCC-1 financing statement naming Company as debtor
and Agent as secured party, together with all
schedules and exhibits thereto, to be filed in the
office of the Secretary of State of the State of Texas
(the "Financing Statement") [confirm no county
filings];
(o) the Recapitalization Agreement;
(p) the Stockholders Agreement;
(q) the Bridge Note Agreement and the Bridge Notes; and
(r) the instruments and other agreements that have been
identified to us by the Company as material to the
Company after giving effect to the transactions to be
consummated on the Closing Date (the "MATERIAL
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AGREEMENTS"), and the orders, writs, judgments,
injunctions and decrees of any court or governmental
authority which are binding on the Company or its
properties as identified to us by the Company (the
"JUDICIAL ORDERS"), in each case as set forth on
Exhibit I hereto.
The documents referred to in paragraphs (d) through (n) above
are collectively referred to herein as the "LOAN DOCUMENTS." The documents
referred to items (o) through (q) are collectively referred to herein as the
"RELATED AGREEMENTS." As used in this opinion, the "UCC" shall mean the
Uniform Commercial Code as now in effect in the specified jurisdiction.
We have been furnished with, and with Lenders' consent have
relied upon, certificates of officers of Company with respect to certain
factual matters, copies of which have been delivered to Lenders. In addition,
we have obtained and relied upon such certificates and assurances from public
officials as we have deemed necessary, copies of which have been delivered to
Lenders. In all such examinations, we have assumed the genuineness of all
signatures other than those of officers of Company on original and certified
documents, and the conformity to original or certified documents of all
documents submitted to us as conformed or photostatic copies.
We have investigated such questions of law for the purpose of
rendering this opinion as we have deemed necessary. We are opining herein as
to the effect on the subject transactions of only United States Federal law and
the laws of the States of New York and Texas.
On the basis of the foregoing, and in reliance thereon, and
subject to the limitations, qualifications and exceptions set forth below, we
are of the opinion that:
1. Company is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority to own and
operate its properties and to carry on its business as now conducted. Company
is duly qualified to do business as a foreign corporation, and is in good
standing, in [LIST JURISDICTIONS].
2. Company has all requisite corporate power and
authority to execute, deliver and perform each of the Loan Documents and each
of the Related Agreements to which it is a party and to consummate the
transactions contemplated thereby.
3. The execution, delivery and performance of each of the
Loan Documents and each of the Related Agreements to which it is a party, the
issuance and
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payment of the Notes and the consummation of the transactions contemplated
thereby have been duly authorized by all necessary corporate action on the part
of Company. Each of the Loan Documents and each of the Related Agreements to
which it is a party have been duly executed and delivered by Company and
constitute the legally valid and binding obligations of Company, enforceable
against Company in accordance with their respective terms.
4. Neither the execution and delivery of the Loan
Documents and the Related Agreements nor the issuance and payment of the Notes
by Company nor the consummation of the transactions contemplated by the Loan
Documents and the Related Agreements nor the compliance with the terms and
conditions thereof by Company (A) conflicts with, results in a breach or
violation of, or constitutes a default under, any of the terms, conditions or
provisions of (x) the Certificate of Incorporation or Bylaws of Company, (y)
any term of any Material Agreement or Judicial Order, or (z) any present
federal, Texas, New York statute, rule or regulation binding on Company or its
property or assets, or (B) results in the creation of any Lien upon any of the
properties or assets of Company under any agreement or order referred to in
clause (y) above (other than Liens created pursuant to the Loan Documents or
the Bridge Note Agreement).
5. No consents or approvals of, authorizations by, or
registrations, declarations or filings with, any federal, Texas or New York
governmental authority are required in connection with (i) the execution,
delivery and performance by Company of any Loan Document or any Related
Agreement to which it is a party, (ii) the extensions of credit under the
Credit Agreement, (iii) the granting of Liens by Company under the Loan
Documents, (iv) the issuance and payment by Company of the Notes, or (v) the
consummation of any of the other transactions contemplated by the Loan
Documents or by the Related Agreements except filings or recordings necessary
or perfect (or continue the perfection of) the Liens granted under the Loan
Documents and the Bridge Note Agreement.
6. To the best of our knowledge after due inquiry, there
are no actions, suits or proceedings pending or threatened against Company
which have a significant likelihood of materially and adversely affecting
either the ability of Company to perform its obligations under any Loan
Document or the financial condition or operations of Company or that seeks to
restrain, enjoin, prevent the consummation of or otherwise challenge any of the
Loan Documents or any of the Related Agreements.
7. The provisions of the Company Security Agreement, the
Company Patent Security Agreement and the Company Trademark Security Agreement
are sufficient to create a security interest, as security for the payment of
all Secured Obligations (as defined in the Company Security Agreement, Company
Patent Security Agreement and Company Trademark Security Agreement), in favor
of the Secured Party (as defined in the Company
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Security Agreement, Company Patent Security Agreement and Company Trademark
Security Agreement) in the collateral described in the Company Security
Agreement, the Company Patent Security Agreement and the Company Trademark
Security Agreement (the "COLLATERAL"), as the case may be, that is of a type in
which a security interest can be created under the Texas UCC or the New York
UCC.
8. The Financing Statement is in appropriate form to
perfect the security interests described in paragraph 7 to the extent security
interests in the various types of Collateral can be perfected by filing under
the provisions of the New York UCC or the Texas UCC, and the proper place to
file the Financing Statement is in the office of the Secretary of State of the
State of Texas and no filing in any other place is necessary under the New York
UCC or the Texas UCC to perfect a security interest in any such Collateral.
Upon the filing of such Financing Statements in the office of the Secretary of
State of the State of Texas, and the payment of applicable filing fees, the
security interests in favor of the Secured Party in the Collateral will be
perfected to the extent security interests in the various types of Collateral
can be perfected by filing under the provisions of the New York UCC or the
Texas UCC.
9. Upon the filing of the Financing Statement relating to
the Collateral (as defined in the Company Patent Security Agreement and the
Company Trademark Security Agreement) in the office of the Texas Secretary of
State and the recording of the Company Patent Security Agreement and the
Company Trademark Security Agreement in the United States Patent and Trademark
Office, the security interest in favor of the Secured Party in such Collateral
will be a perfected security interest under the Texas UCC, the New York UCC and
the applicable federal law.
10. The making of the Loans and the application of the
proceeds thereof as provided in the Credit Agreement do not violate Regulation
G, T, U or X of the Board of Governors of the Federal Reserve System.
11. It is not necessary in connection with the execution
and delivery of the Notes by Company to register the Notes or the Loans under
the Securities Act of 1933, as amended, or to qualify any indenture in respect
thereof under the Trust Indenture Act of 1939, as amended.
12. Company is not an "investment company" or a company
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
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13. The Loans and the other monetary obligations of the
Company owing under the Loan Documents are within the definition of "Senior
Debt" under the Takeout Securities Indenture and, upon due execution and
delivery of the Takeout Securities Indenture and the Takeout Securities, will
be senior to the Company's obligations under the Takeout Securities Indenture
and the Takeout Securities to the extent set forth therein.
14. We call to your attention on the fact that the Loan
Documents select the internal laws of the State of New York as the governing
law (except with respect to the Collateral Documents where the laws of another
jurisdiction may govern the perfection of security interests in the
Collateral). It is our opinion that a federal or state court sitting in Texas
will honor the parties' choice of the internal laws of the State of New York as
the law applicable to the Loan Documents and to the determination of whether
the obligations created by the Loan Documents are usurious.
Our opinion in paragraph 3 above as to the validity, binding
effect and enforceability of the Credit Agreement, the other Loan Documents and
the Related Agreements, is subject to all applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally. In addition, we advise you that the enforceability of the Credit
Agreement, the other Loan Documents and the Related Agreements, is subject to
the effect of general principles of equity including concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, regardless of whether considered in
a proceeding in equity or at law.
Our opinions in paragraphs 4 and 5 above as to compliance with
certain statutes, rules and regulations and as to the lack of any required
consents or approvals of, authorizations by, or registrations, declarations or
filings with certain governmental authorities are based upon a review of those
statutes, rules and regulations which, in our experience, are normally
applicable to transactions of the type contemplated by the Credit Agreement.
For purposes of our opinion expressed in paragraph 11, we have
assumed, with your consent, that each Lender is taking the Notes payable to it
and making its Loans for its own account in the ordinary course of its
commercial banking business and not with a view to or for sale in connection
with any distribution of the Notes.
To the extent that the obligations of Company may be dependent
upon such matters, we have assumed for purposes of this opinion, other than
with respect to Company, that each additional party to the agreements and
contracts referred to herein is duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of
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incorporation; that each such other party has the requisite corporate or other
organizational power and authority to perform its obligations under such
agreements and contracts, as applicable; and that such agreements and contracts
have been duly authorized, executed and delivered by, and each of them
constitutes the legally valid and binding obligation of, such other parties, as
applicable, enforceable against such other parties in accordance with their
respective terms. Except as expressly covered in this opinion, we are not
expressing any opinion as to the effect of compliance by any Lender with any
state or federal laws or regulations applicable to the transactions because of
the nature of any of its businesses.
This opinion is rendered only to Agent and Lenders and is
solely for their benefit in connection with the above transactions. This
opinion may not be relied upon by Agent or Lenders for any other purpose, or
quoted to or relied upon by any other person, firm or corporation for any
purpose without our prior written consent.
Very truly yours,
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SCHEDULE A
[INSERT NAMES OF LENDERS]
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EXHIBIT IX
[FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇]
[O'M&M Letterhead]
November
12th
1 9 9 7
038,623-004
LA1-765560
BT Commercial Corporation, as Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
The Lenders Party to the Credit
Agreement Referenced Below
Re: Loans to FWT, Inc.
Ladies and Gentlemen:
We have acted as counsel to BT Commercial Corporation, as Agent
(in such capacity, "Agent"), in connection with the preparation and delivery of
a Credit Agreement dated as of November 12, 1997 (the "Credit Agreement") among
FWT, Inc., a Texas corporation ("Company"), the financial institutions listed
therein as Lenders, and Agent and in connection with the preparation and
delivery of certain related documents.
We have participated in various conferences with
representatives of Company and Agent and conferences and telephone calls with
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., counsel to Company, and with your
representatives, during which the Credit Agreement and related matters have
been discussed, and we have also participated in the meeting held on the date
hereof (the "Closing") incident to the funding of the initial loans made under
the Credit Agreement. We have reviewed the forms of the Credit Agreement and
the exhibits thereto, including the form of the promissory note annexed thereto
(the "Notes"), and the opinion of Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
(the "Opinion") and the officers' certificates and other documents delivered at
the Closing. We have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as
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originals or copies and the due authority of all persons executing the same,
and we have relied as to factual matters on the documents that we have
reviewed.
Although we have not independently considered all of the
matters covered by the Opinion to the extent necessary to enable us to express
the conclusions therein stated, we believe that the Credit Agreement and the
exhibits thereto are in substantially acceptable legal form and that the
Opinion and the officers' certificates and other documents delivered in
connection with the execution and delivery of, and as conditions to the making
of the initial loans under, the Credit Agreement and the Notes are
substantially responsive to the requirements of the Credit Agreement.
Respectfully submitted,
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EXHIBIT X
[FORM OF ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "AGREEMENT") is entered into by
and between the parties designated as Assignor ("ASSIGNOR") and Assignee
("ASSIGNEE") above the signatures of such parties on the Schedule of Terms
attached hereto and hereby made an integral part hereof (the "SCHEDULE OF
TERMS") and relates to that certain Credit Agreement described in the Schedule
of Terms (said Credit Agreement, as amended, supplemented or otherwise modified
to the date hereof and as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "CREDIT AGREEMENT", the terms
defined therein and not otherwise defined herein being used herein as therein
defined).
IN CONSIDERATION of the agreements, provisions and covenants
herein contained, the parties hereto hereby agree as follows:
SECTION 1. ASSIGNMENT AND ASSUMPTION.
(a) Effective upon the Assignment Settlement Date
specified in Item 4 of the Schedule of Terms (the "ASSIGNMENT SETTLEMENT
DATE"), Assignor hereby sells and assigns to Assignee, without recourse,
representation or warranty (except as expressly set forth herein), and Assignee
hereby purchases and assumes from Assignor, that percentage interest in all of
Assignor's rights and obligations as a Lender arising under the Credit
Agreement and the other Loan Documents with respect to Assignor's Commitments
and outstanding Loans, if any, which represents, as of the Assignment
Settlement Date, the percentage interest specified in Item 3 of the Schedule of
Terms of all rights and obligations of Lenders arising under the Credit
Agreement and the other Loan Documents with respect to the Commitments and any
outstanding Loans (the "ASSIGNED SHARE"). Without limiting the generality of
the foregoing, the parties hereto hereby expressly acknowledge and agree that
any assignment of all or any portion of Assignor's rights and obligations
relating to Assignor's Revolving Loan Commitment shall include (i) in the event
Assignor is an Issuing Lender with respect to any outstanding Letters of Credit
(any such Letters of Credit being "ASSIGNOR LETTERS OF CREDIT"), the sale to
Assignee of a participation in the Assignor Letters of Credit and any drawings
thereunder as contemplated by subsection 3.1C of the Credit Agreement and (ii)
the sale to Assignee of a ratable portion of any participations previously
purchased by Assignor pursuant to said subsection 3.1C with respect to any
Letters of Credit other than the Assignor Letters of Credit.
(b) In consideration of the assignment described above,
Assignee hereby agrees to pay to Assignor, on the Assignment Settlement Date,
the principal amount of
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any outstanding Loans included within the Assigned Share, such payment to be
made by wire transfer of immediately available funds in accordance with the
applicable payment instructions set forth in Item 5 of the Schedule of Terms.
(c) Assignor hereby represents and warrants that Item 3 of
the Schedule of Terms correctly sets forth the amount of the Commitments and
the Pro Rata Share of Assignee after giving effect to the assignment and
assumption described above.
(d) Assignor and Assignee hereby agree that, upon giving
effect to the assignment and assumption described above, (i) Assignee shall be
a party to the Credit Agreement and shall have all of the rights and
obligations under the Loan Documents (including, but not limited to, subsection
10.19 of the Credit Agreement), and shall be deemed to have made all of the
covenants and agreements contained in the Loan Documents, arising out of or
otherwise related to the Assigned Share, and (ii) subject to subsection 10.9B
of the Credit Agreement, Assignor shall be absolutely released from any of such
obligations, covenants and agreements assumed or made by Assignee in respect of
the Assigned Share. Assignee hereby acknowledges and agrees that the agreement
set forth in this Section 1(d) is expressly made for the benefit of Company,
Agent, Assignor and the other Lenders and their respective successors and
permitted assigns.
(e) Assignor and Assignee hereby acknowledge and confirm
their understanding and intent that (i) this Agreement shall effect the
assignment by Assignor and the assumption by Assignee of Assignor's rights and
obligations with respect to the Assigned Share, (ii) any other assignments by
Assignor of a portion of its rights and obligations with respect to the
Commitments and any outstanding Loans shall have no effect on the Commitments
and the Pro Rata Share of Assignee set forth in Item 3 of the Schedule of Terms
or on the interest of Assignee in any outstanding Revolving Loans corresponding
thereto, and (iii) from and after the Assignment Settlement Date, Agent shall
make all payments under the Credit Agreement in respect of the Assigned Share
(including without limitation all payments of principal and accrued but unpaid
interest, commitment fees and letter of credit fees with respect thereto) (A)
in the case of any such interest and fees that shall have accrued prior to the
Assignment Settlement Date, to Assignor, and (B) in all other cases, to
Assignee; provided that Assignor and Assignee shall make payments directly to
each other to the extent necessary to effect any appropriate adjustments in any
amounts distributed to Assignor and/or Assignee by Agent under the Loan
Documents in respect of the Assigned Share in the event that, for any reason
whatsoever, the payment of consideration contemplated by Section 1(b) occurs on
a date other than the Assignment Settlement Date.
SECTION 2. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) Assignor represents and warrants that it is the legal
and beneficial owner of the Assigned Share, free and clear of any adverse
claim.
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(b) Assignor shall not be responsible to Assignee for the
execution, effectiveness, genuineness, validity, enforceability, collectibility
or sufficiency of any of the Loan Documents or for any representations,
warranties, recitals or statements made therein or made in any written or oral
statements or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by Assignor to Assignee
or by or on behalf of Company or any of its Subsidiaries to Assignor or
Assignee in connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of
Company or any other Person liable for the payment of any Obligations, nor
shall Assignor be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Loan Documents or as to the use of the proceeds of the
Loans or the use of the Letters of Credit or as to the existence or possible
existence of any Event of Default or Potential Event of Default.
(c) Assignee represents and warrants that it is an
Eligible Assignee; that it has experience and expertise in the making of loans
such as the Loans; that it has acquired the Assigned Share for its own account
and not with any present intention of selling all or any portion of such
interest; and that it has received, reviewed and approved a copy of the Credit
Agreement (including all Exhibits and Schedules thereto).
(d) Assignee represents and warrants that it has received
from Assignor such financial information regarding Company and its Subsidiaries
as is available to Assignor and as Assignee has requested, that it has made its
own independent investigation of the financial condition and affairs of Company
and its Subsidiaries in connection with the assignment evidenced by this
Agreement, and that it has made and shall continue to make its own appraisal of
the creditworthiness of Company and its Subsidiaries. Assignor shall have no
duty or responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of Assignee or to provide
Assignee with any other credit or other information with respect thereto,
whether coming into its possession before the making of the initial Loans or at
any time or times thereafter, and Assignor shall not have any responsibility
with respect to the accuracy of or the completeness of any information provided
to Assignee.
(e) Each party to this Agreement represents and warrants
to the other party hereto that it has full power and authority to enter into
this Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Agreement has been duly authorized, executed and
delivered by such party and that this Agreement constitutes a legal, valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity.
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SECTION 3. MISCELLANEOUS.
(a) Each of Assignor and Assignee hereby agrees from time
to time, upon request of the other such party hereto, to take such additional
actions and to execute and deliver such additional documents and instruments as
such other party may reasonably request to effect the transactions contemplated
by, and to carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated, except by an instrument in writing
signed by the party (including, if applicable, any party required to evidence
its consent to or acceptance of this Agreement) against whom enforcement of
such change, waiver, discharge or termination is sought.
(c) Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and may be personally served, telexed or sent by telefacsimile or
United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of telefacsimile
or telex, or three Business Days after depositing it in the United States mail
with postage prepaid and properly addressed. For the purposes hereof, the
notice address of each of Assignor and Assignee shall be as set forth on the
Schedule of Terms or, as to either such party, such other address as shall be
designated by such party in a written notice delivered to the other such party.
In addition, the notice address of Assignee set forth on the Schedule of Terms
shall serve as the initial notice address of Assignee for purposes of
subsection 10.8 of the Credit Agreement.
(d) In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
(e) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(f) This Agreement shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective successors and
assigns.
(g) This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate
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counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
(h) This Agreement shall become effective upon the date
(the "EFFECTIVE DATE") upon which all of the following conditions are
satisfied: (i) the execution of a counterpart hereof by each of Assignor and
Assignee, (ii) the execution of a counterpart hereof by Company as evidence of
its consent hereto to the extent required under subsection 10.1B(i) of the
Credit Agreement, (iii) the receipt by Agent of the processing and recordation
fee referred to in subsection 10.1B(i) of the Credit Agreement, (iv) in the
event Assignee is a Non-US Lender (as defined in subsection 2.7B(iii)(a) of the
Credit Agreement), the delivery by Assignee to Agent of such forms,
certificates or other evidence with respect to United States federal income tax
withholding matters as Assignee may be required to deliver to Agent pursuant to
said subsection 2.7B(iii)(a), (v) the execution of a counterpart hereof by
Agent as evidence of its acceptance hereof in accordance with subsection
10.1B(ii) of the Credit Agreement, (vi) the receipt by Agent of originals or
telefacsimiles of the counterparts described above and authorization of
delivery thereof, and (vii) the recordation by Agent in the Register of the
pertinent information regarding the assignment effected hereby in accordance
with subsection 10.1B(ii) of the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized, such execution being made as of the Effective Date
in the applicable spaces provided on the Schedule of Terms.
[Remainder of page intentionally left blank]
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SCHEDULE OF TERMS
1. Company: FWT, Inc.
2. Name and Date of Credit Agreement: Credit Agreement dated as of November 12, 1997 by and among FWT, Inc., a
Texas corporation, the financial institutions listed therein as Lenders, and BT Commercial Corporation, as
Agent.
3. Amounts:
(a) Aggregate Commitments of all Lenders: $________
(b) Assigned Share/Pro Rata Share: _____%
(c) Amount of Assigned Share of Commitments: $________
4. Assignment Settlement Date: ____________, _____
5. Payment Instructions:
ASSIGNOR: ASSIGNEE:
---------------------------- ----------------------------
---------------------------- ----------------------------
---------------------------- ----------------------------
Attention: Attention:
----------------- -----------------
Reference: Reference:
----------------- -----------------
6. Notice Addresses:
ASSIGNOR: ASSIGNEE:
---------------------------- ----------------------------
---------------------------- ----------------------------
---------------------------- ----------------------------
---------------------------- ----------------------------
7. Signatures:
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: By:
------------------------------------- -------------------------------------------------------
Title: Title:
----------------------------------- ----------------------------------------------------
Accepted in accordance with subsection
10.1B(ii) of the Credit Agreement
BT COMMERCIAL CORPORATION, as Agent
By:
-------------------------------------------------------
Title:
----------------------------------------------------
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EXHIBIT XI
[FORM OF AUDITOR'S LETTER]
[Letterhead of BT Commercial Corporation]
November 12, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
--------------------------
--------------------------
Attention:
--------------
Re: FWT, Inc.
Ladies and Gentlemen:
This letter (this "LETTER OF UNDERSTANDING") is being sent to ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP ("CPA") with respect to credit accommodations that certain
financial institutions (collectively, "LENDERS") may grant to FWT, Inc., a
Texas corporation ("COMPANY"), pursuant to that certain Credit Agreement dated
as of November 12, 1997 (the "CREDIT AGREEMENT") by and among Company, Lenders
and BT Commercial Corporation, as Agent ("AGENT").
We wish to confirm that Lenders may use CPA's audit report dated
____________, 1997 on the financial statements of Company as of April 30, 1997
(the "CURRENT AUDIT REPORT") in connection with Lenders' decision whether or
not to extend the following new credit to Company, pursuant to the Credit
Agreement, substantially on the following terms:
The Credit Agreement provides a secured revolving credit and letter of
credit facility in the maximum principal amount of $25,000,000 which has a
final maturity date of November __, 2000 (collectively, the "PROPOSED CREDIT").
Lenders may also use CPA's subsequent audit reports on future financial
statements of Company (the "SUBSEQUENT AUDIT REPORTS"; together with the
Current Audit Report, the "AUDIT REPORTS") in connection with Lenders'
provision of credit to Company so long as there has been no substantial change
to the terms of the Proposed Credit as outlined above. CPA may communicate in
writing to Agent that Lenders should no longer use the Audit Reports, in which
case Lenders shall no longer have the benefit of this Letter of Understanding
with respect to subsequent credit decisions relating to Company.
Lenders' consideration of the Audit Reports may or may not have an
impact on Lenders' decision whether or not to extend the Proposed Credit and no
Audit Report is a
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
November 12, 1997
Page 2
representation of creditworthiness. Lenders' credit decisions will not be
based solely on the Audit Reports or the accompanying financial statements, but
will also be based on the exercise of reasonable due diligence with respect to
other potentially relevant factors bearing on Company's creditworthiness as
each individual Lender believes appropriate.
Consideration by Lenders of the Audit Reports shall not (a) change
CPA's duties to Company with respect to the conduct of any audit of Company's
financial statements, (b) change the limitations of the audits as set forth in
the Audit Reports, (c) affect the timeliness of the information contained in
the Audit Reports and the accompanying financial statements, or (d) alter the
responsibility of management of Company for the financial statements
accompanying the Audit Reports.
Events may occur after the period covered by any Audit Report which may
have an effect on the financial condition of Company, and CPA is not
responsible under this Letter of Understanding for knowledge or disclosure of
such events.
This Letter of Understanding does not authorize Lenders to use any
Audit Report in connection with any transaction other than the granting of the
Proposed Credit under the Credit Agreement. This Letter of Understanding shall
no longer be binding on CPA if the Credit Agreement is not executed within 90
days of the date of this Letter of Understanding. Agent and Lenders agree to
keep the Audit Reports confidential and, except as required by law or
regulation, not to disclose any Audit Report to any other party not involved in
the Proposed Credit unless such Audit Report becomes generally available to the
public.
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
November 12, 1997
Page 3
Kindly confirm your acknowledgement and agreement to this Letter of
Understanding by signing the enclosed copy of this Letter of Understanding and
returning it promptly to Agent.
BT COMMERCIAL CORPORATION, as Agent
By:
-------------------------------
Title:
--------------------
ACKNOWLEDGED AND AGREED:
FWT, INC.
By:
---------------------------------------------
Title:
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
By:
---------------------------------------------
Title:
---------------------------------
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EXHIBIT XII
[FORM OF CERTIFICATE RE NON-BANK STATUS]
CERTIFICATE RE NON-BANK STATUS
Reference is hereby made to that certain Credit Agreement dated
as of November 12, 1997 (said Credit Agreement, as amended, supplemented or
otherwise modified to the date hereof, being the "CREDIT AGREEMENT") by and
among FWT, Inc., a Texas corporation, the financial institutions listed therein
as Lenders, and BT Commercial Corporation, as Agent. Pursuant to subsection
2.7B(iii) of the Credit Agreement, the undersigned hereby certifies that it is
not a "bank" or other Person described in Section 881(c)(3) of the Internal
Revenue Code of 1986, as amended.
[NAME OF LENDER]
By:
---------------------------
Title:
-------------------------
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EXHIBIT XIII
[FORM OF COLLATERAL ACCOUNT AGREEMENT]
COLLATERAL ACCOUNT AGREEMENT
This COLLATERAL ACCOUNT AGREEMENT (this "AGREEMENT") is dated
as of November 12, 1997 and entered into by and between FWT, INC., a Texas
corporation ("PLEDGOR"), and BT COMMERCIAL CORPORATION, as agent for and
representative of (in such capacity herein called "SECURED PARTY") the
financial institutions ("LENDERS") party to the Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS
A. Secured Party and Lenders have entered into a Credit
Agreement dated as of November 12, 1997 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Pledgor pursuant to
which Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Pledgor.
B. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Pledgor shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and issue Letters of Credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
SECTION 1. CERTAIN DEFINITIONS. The following terms used in
this Agreement shall have the following meanings:
"COLLATERAL" means (i) the Collateral Account, (ii) all amounts
on deposit from time to time in the Collateral Account, (iii) all interest,
cash, instruments, securities and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Collateral, and (iv) to the extent not covered by clauses (i) through
(iii) above, all proceeds of any or all of the foregoing Collateral.
"COLLATERAL ACCOUNT" means the restricted deposit account
established and maintained by Secured Party pursuant to Section 2(a).
"SECURED OBLIGATIONS" means all obligations and liabilities of
every nature of Pledgor now or hereafter existing under or arising out of or in
connection with the
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Credit Agreement and the other Loan Documents and all extensions or renewals
thereof, whether for principal, interest (including without limitation interest
that, but for the filing of a petition in bankruptcy with respect to Pledgor,
would accrue on such obligations), reimbursement of amounts drawn under Letters
of Credit, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender as a preference,
fraudulent transfer or otherwise, and all obligations of every nature of
Pledgor now or hereafter existing under this Agreement.
SECTION 2. ESTABLISHMENT AND OPERATION OF COLLATERAL ACCOUNT.
(a) Secured Party is hereby authorized to establish and
maintain at its office at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as a
blocked account in the name of Secured Party and under the sole dominion and
control of Secured Party, a restricted deposit account designated as "FWT, Inc.
Collateral Account".
(b) The Collateral Account shall be operated in accordance
with the terms of this Agreement.
(c) All amounts at any time held in the Collateral Account
shall be beneficially owned by Pledgor but shall be held in the name of Secured
Party hereunder, for the benefit of Lenders, as collateral security for the
Secured Obligations upon the terms and conditions set forth herein. Pledgor
shall have no right to withdraw, transfer or, except as expressly set forth
herein, otherwise receive any funds deposited into the Collateral Account.
(d) Anything contained herein to the contrary
notwithstanding, the Collateral Account shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors of the Federal
Reserve System and of any other appropriate banking or governmental authority,
as may now or hereafter be in effect.
SECTION 3. DEPOSITS OF CASH COLLATERAL.
(a) All deposits of funds in the Collateral Account shall
be made by wire transfer (or, if applicable, by intra-bank transfer from
another account of Pledgor) of immediately available funds to such Collateral
Account. Pledgor shall, promptly after initiating a transfer of funds to the
Collateral Account, give notice to Secured Party by telefacsimile of the date,
amount and method of delivery of such deposit.
(b) If an Event of Default has occurred and is continuing
and, in accordance with Section 8 of the Credit Agreement, Pledgor is required
to pay to Secured Party an amount (the "AGGREGATE AVAILABLE AMOUNT") equal to
the maximum amount that may at any time be drawn under all Letters of Credit
then outstanding under the Credit Agreement, Pledgor shall deliver funds in
such an amount for deposit in the Collateral Account in accordance with Section
3(a). If for any reason the aggregate amount delivered by Pledgor for deposit
in the Collateral Account as aforesaid is less than
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the Aggregate Available Amount, the aggregate amount so delivered by Pledgor
shall be apportioned among all outstanding Letters of Credit issued for the
account of Pledgor for purposes of this Section 3(b) in accordance with the
ratio of the maximum amount available for drawing under each such Letter of
Credit (as to such Letter of Credit, the "MAXIMUM AVAILABLE AMOUNT") to the
Aggregate Available Amount. Upon any drawing under any outstanding Letter of
Credit issued for the account of Pledgor in respect of which Pledgor has
deposited in the Collateral Account any amounts described above, Secured Party
shall apply such amounts to reimburse the Issuing Lender for the amount of such
drawing. In the event of cancellation or expiration of any Letter of Credit
issued for the account of Pledgor in respect of which Pledgor has deposited in
the Collateral Account any amounts described above, or in the event of any
reduction in the Maximum Available Amount under such Letter of Credit, Secured
Party shall apply the amount then on deposit in the Collateral Account in
respect of such Letter of Credit (less, in the case of such a reduction, the
Maximum Available Amount under such Letter of Credit immediately after such
reduction) first, to the payment of any amounts payable to Secured Party
pursuant to Section 13, second, to the extent of any excess, to the cash
collateralization pursuant to the terms of this Agreement of any outstanding
Letters of Credit issued for the account of Pledgor in respect of which Pledgor
has failed to pay all or a portion of the amounts described above (such cash
collateralization to be apportioned among all such Letters of Credit in the
manner described above), third, to the extent of any further excess, to the
payment of any other outstanding Secured Obligations in such order as Secured
Party shall elect, and fourth, to the extent of any further excess, to the
payment to whomsoever shall be lawfully entitled to receive such funds.
SECTION 4. PLEDGE OF SECURITY FOR SECURED OBLIGATIONS.
Pledgor hereby pledges and assigns to Secured Party, and hereby grants to
Secured Party a security interest in, all of Pledgor's right, title and
interest in and to the Collateral as collateral security for the prompt payment
or performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)),
of all Secured Obligations.
SECTION 5. NO INVESTMENT OF AMOUNTS IN THE COLLATERAL ACCOUNT;
INTEREST ON AMOUNTS IN THE COLLATERAL ACCOUNT.
(a) Cash held by Secured Party in the Collateral Account
shall not be invested by Secured Party but instead shall be maintained as a
cash deposit in the Collateral Account pending application thereof as elsewhere
provided in this Agreement.
(b) To the extent permitted under Regulation Q of the
Board of Governors of the Federal Reserve System, any cash held in the
Collateral Account shall bear interest at the standard rate paid by Secured
Party to its customers for deposits of like amounts and terms.
(c) Subject to Secured Party's rights under Section 12,
any interest earned on deposits of cash in the Collateral Account in accordance
with Section 5(b) shall be deposited directly in, and held in the Collateral
Account.
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SECTION 6. REPRESENTATIONS AND WARRANTIES. Pledgor represents
and warrants as follows:
(a) Ownership of Collateral. Pledgor is (or at the time
of transfer thereof to Secured Party will be) the legal and beneficial owner of
the Collateral from time to time transferred by Pledgor to Secured Party, free
and clear of any Lien except for the security interest created by this
Agreement.
(b) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the grant by Pledgor of
the security interest granted hereby, (ii) the execution, delivery or
performance of this Agreement by Pledgor, or (iii) the perfection of or the
exercise by Secured Party of its rights and remedies hereunder (except as may
have been taken by or at the direction of Pledgor).
(c) Perfection. The pledge and assignment of the
Collateral pursuant to this Agreement creates a valid and perfected first
priority security interest in the Collateral, securing the payment of the
Secured Obligations.
(d) Other Information. All information heretofore, herein
or hereafter supplied to Secured Party by or on behalf of Pledgor with respect
to the Collateral is accurate and complete in all respects.
SECTION 7. FURTHER ASSURANCES. Pledgor agrees that from time
to time, at the expense of Pledgor, Pledgor will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that Secured Party may request, in order to perfect
and protect any security interest granted or purported to be granted hereby or
to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of
the foregoing, Pledgor will: (a) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Secured Party may request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby and (b) at Secured Party's request, appear in and defend any
action or proceeding that may affect Pledgor's beneficial title to or Secured
Party's security interest in all or any part of the Collateral.
SECTION 8. TRANSFERS AND OTHER LIENS. Except to the extent
permitted under the Credit Agreement, Pledgor agrees that it will not (a) sell,
assign (by operation of law or otherwise) or otherwise dispose of any of the
Collateral or (b) create or suffer to exist any Lien upon or with respect to
any of the Collateral, except for the security interest under this Agreement.
SECTION 9. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Pledgor
hereby irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with
full authority in the place and stead of Pledgor and in the name of Pledgor,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including
without limitation to file one or more financing
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or continuation statements, or amendments thereto, relative to all or any part
of the Collateral without the signature of Pledgor.
SECTION 10. SECURED PARTY MAY PERFORM. If Pledgor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Pledgor under Section 13.
SECTION 11. STANDARD OF CARE. The powers conferred on Secured
Party hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the
exercise of reasonable care in the custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, Secured Party
shall have no duty as to any Collateral, it being understood that Secured Party
shall have no responsibility for (a) taking any necessary steps (other than
steps taken in accordance with the standard of care set forth above to maintain
possession of the Collateral) to preserve rights against any parties with
respect to any Collateral or (b) taking any necessary steps to collect or
realize upon the Secured Obligations or any guarantee therefor, or any part
thereof, or any of the Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property of like kind.
SECTION 12. REMEDIES. Subject to the provisions of Section
3(b), Secured Party may exercise in respect of the Collateral, in addition to
all other rights and remedies otherwise available to it, all the rights and
remedies of a secured party on default under the Uniform Commercial Code as in
effect in any relevant jurisdiction (the "CODE") (whether or not the Code
applies to the affected Collateral).
SECTION 13. INDEMNITY AND EXPENSES.
(a) Pledgor agrees to indemnify Secured Party and each
Lender from and against any and all claims, losses and liabilities in any way
relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party's or such Lender's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) Pledgor shall pay to Secured Party upon demand the
amount of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Pledgor to perform or observe any of the provisions hereof.
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Collateral
and shall (a) remain in full force and effect until the payment in full of the
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all
XIII-5
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outstanding Letters of Credit, (b) be binding upon Pledgor, its permitted
successors and assigns, and (c) inure, together with the rights and remedies of
Secured Party hereunder, to the benefit of Secured Party and its successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), but subject to the provisions of subsection 10.1 of the Credit
Agreement, any Lender may assign or otherwise transfer any Loans held by it to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to Lenders herein or otherwise. Upon
the payment in full of all Secured Obligations, the cancellation or termination
of the Commitments and the cancellation or expiration of all outstanding
Letters of Credit, the security interest granted hereby shall terminate
automatically and all rights to the Collateral shall revert to Pledgor. Upon
any such termination Secured Party shall, at Pledgor's expense, execute and
deliver to Pledgor such documents as Pledgor shall reasonably request to
evidence such termination and Pledgor shall be entitled to the return, upon its
request and at its expense, against receipt and without recourse to Secured
Party, of such of the Collateral as shall not have been otherwise applied
pursuant to the terms hereof.
SECTION 15. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders. Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
notice of resignation as Secured Party under this Agreement; removal of Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute
removal as Secured Party under this Agreement; and appointment of a successor
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
appointment of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Agent under subsection 9.5 of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums held by Secured Party hereunder (which shall
be deposited in a new Collateral Account established and maintained by such
successor Secured Party), together with all records and other documents
necessary or appropriate in connection with the performance of the duties of
the successor Secured Party under this Agreement, and (ii) execute and deliver
to such successor Secured Party such amendments to financing statements, and
take such other actions, as may be necessary or appropriate in connection with
the assignment to such successor Secured Party of the security interests
created hereunder, whereupon such retiring or removed Secured Party shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Agent's resignation or removal hereunder as Secured Party,
the provisions of this Agreement shall inure to its benefit as
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to any actions taken or omitted to be taken by it under this Agreement while it
was Secured Party hereunder.
SECTION 16. AMENDMENTS; ETC. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by Pledgor herefrom, shall in any event be effective unless the same
shall be in writing and signed by Secured Party and, in the case of any such
amendment or modification, by Pledgor. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
SECTION 17. NOTICES. Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex, or three Business Days after depositing it in the
United States mail with postage prepaid and properly addressed. For the
purposes hereof, the address of each party hereto shall be as set forth under
such party's name on the signature pages hereof or, as to either party, such
other address as shall be designated by such party in a written notice
delivered to the other party hereto.
SECTION 18. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 19. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 20. HEADINGS. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 21. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
XIII-7
191
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein or in the Credit Agreement, terms used in Articles 8 and 9 of
the Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Pledgor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Pledgor at its address provided in Section 17, such service being
hereby acknowledged by Pledgor to be sufficient for personal jurisdiction in
any action against Pledgor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Secured Party to bring proceedings against Pledgor in the courts of any other
jurisdiction.
SECTION 23. WAIVER OF JURY TRIAL. PLEDGOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
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CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The
scope of this waiver is intended to be all- encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter
of this transaction, including without limitation contract claims, tort claims,
breach of duty claims, and all other common law and statutory claims. Pledgor
and Secured Party each acknowledge that this waiver is a material inducement
for Pledgor and Secured Party to enter into a business relationship, that
Pledgor and Secured Party have already relied on this waiver in entering into
this Agreement and that each will continue to rely on this waiver in their
related future dealings. Pledgor and Secured Party further warrant and
represent that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 23 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 24. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
XIII-9
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IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
FWT, INC.
By:
----------------------------------
Title:
---------------------------
Notice Address:
BT COMMERCIAL CORPORATION, as Secured Party
By:
----------------------------------
Title:
---------------------------
Notice Address:
BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop #4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Bhartai ▇▇▇▇▇▇
▇-▇
194
EXHIBIT XIV
[FORM OF BLOCKED ACCOUNT AGREEMENT]
BLOCKED ACCOUNT AGREEMENT
This BLOCKED ACCOUNT AGREEMENT ("Agreement") is entered into as
of November 12, 1997 and entered into by and between FWT, INC., a Texas
corporation ("PLEDGOR"), and BT COMMERCIAL CORPORATION, as agent for and
representative of (in such capacity herein called "SECURED PARTY") the
financial institutions ("LENDERS") party to the Credit Agreement (as
hereinafter defined), and _______________, as the account bank ("BANK").
PRELIMINARY STATEMENTS
A. Agent and certain financial institutions acting as
Lenders ("LENDERS") have entered into that certain Credit Agreement, dated as
of November 12, 1997 (said Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT") with Pledgor, wherein Pledgor has granted the Lenders a security
interest in its present and future accounts receivable, and all proceeds
thereof and Pledgor has agreed that all collections and proceeds of such
accounts receivable shall be remitted in kind to the Agent;
B. Pledgor has granted to Agent a security interest in
the Account (as defined below) and in the funds deposited in the Account;
C. Pledgor has agreed to maintain deposit account number
_______________ in its name (the "ACCOUNT") in which Pledgor shall deposit
cash, checks, drafts or other orders for payment of money.
D. Pledgor, Agent and Bank are entering into this
Agreement to provide for the disposition of net proceeds of cash, checks,
drafts and other orders for the payment of money deposited by Pledgor into the
Account.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, Pledgor, Agent and Bank agree
as follows:
1. Pledgor hereby authorizes Bank and Bank hereby agrees:
(a) to charge the Account for all returned checks
associated with this Agreement and to charge the Account for service charges
and other fees and charges associated with this Agreement;
(b) to follow its usual procedures in the event
the Account or any check, draft or other order for payment of money should be
or become the subject of any writ, levy, order or other similar judicial or
regulatory order or process;
XIV-1
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(c) to supply any necessary endorsements and to
deposit any and all monies and instruments received by Bank in the Account when
received, whether in the form of checks, wire transfers or otherwise; and
(d) to transfer pursuant to Agent's instructions
any collected and available balances in the Account each Business Day by wire
transfer to the following account:
Bank Name: _____________________________________
Location: _____________________________________
[ABA Routing No.: _____________________________________]
Credit Account No.: _____________________________________
Agent will give Bank sufficient advance written notice of any
change in the instructions for Bank to act upon such changes. Funds are not
available if, in the reasonable determination of Bank, they are subject to a
hold, dispute or legal process preventing their withdrawal. "Business Day"
means each Monday through Friday, excluding Bank holidays.
2. (a) If the balances in the Account are not
sufficient to pay Bank for any returned check, draft or other order for the
payment of money, Bank can make a demand for such deficiency upon Agent in
writing, no longer than 30 days from the date of the returned item and Agent,
on behalf of itself and Lenders, agrees to promptly reimburse Bank for the
amount of the deficiency. If Agent makes any payments pursuant to this Section
2(a), Pledgor will promptly reimburse Agent for such payment.
(b) Pledgor agrees to pay Bank on demand (i) the
amount for any fees or charges due Bank under this Agreement, and (ii) all
expenses for the maintenance of the Account, and Bank agrees that such fees,
charges or expenses under this Section 2(b) are the responsibility of Pledgor
and will not deduct such amounts from funds in the Account or seek payment from
Agent.
(c) Pledgor hereby authorizes Bank, without prior
notice, from time to time to debit any other account Pledgor may have with Bank
for the amount or amounts due Bank under subsection 2(a) or 2(b).
(d) Bank agrees it shall not offset against the
Account, except as permitted under this Agreement, until it has been advised in
writing by Pledgor and Agent that all of Pledgor's obligations, which are
secured by the Account and all funds deposited in the Account, are paid in
full. Agent shall notify Bank promptly in writing upon payment in full of
Pledgor's obligations and this Agreement shall automatically terminate upon
receipt of such notice. Bank further agrees that the Account and the funds
deposited in such Account shall not be subject to any banker's lien, deductions
or any other right in favor of any person (including Bank) other than Agent,
except as expressly provided for herein with respect to Bank.
XIV-2
196
3. Termination of this Agreement shall be as follows:
(a) Bank may terminate this Agreement upon 60
days' prior written notice to Pledgor and Agent. Agent may terminate this
Agreement at any time which termination shall be effective upon receipt of
written notice by the Bank and by Pledgor. Pledgor may not terminate this
Agreement except with the written consent of Agent and upon 60 days' prior
written notice to Bank and Agent.
(b) Notwithstanding subsection 3(a), Bank may
terminate this Agreement at any time by written notice to Pledgor and Agent if
(i) either Pledgor or Agent breaches any of the terms of this Agreement, any
other agreement with Bank or any agreement involving the borrowing of money or
the extension of credit; (ii) either Pledgor or Agent terminates its business,
fails generally or admits in writing its inability to pay its debts as they
become due; any bankruptcy, reorganization, arrangement, insolvency,
dissolution or similar proceeding is instituted with respect to either Pledgor
or Agent; either Pledgor or Agent makes any assignment for the benefit of
creditors or enters into any composition with creditors or takes any action in
furtherance of any of the foregoing; or (iii) any material adverse change
occurs in either Pledgor's or Agent's financial condition, results of
operations or ability to perform its obligations under this Agreement. Pledgor
and Agent shall each promptly give written notice to Bank of the occurrence of
any of the foregoing events as it applies to it.
4. (a) Bank will not be liable to Pledgor or Agent
for any expense, claim, loss, damage or cost ("DAMAGES") arising out of or
relating to its performance under this Agreement other than those Damages which
result directly from its acts or omissions constituting negligence, subject to
the limits in the next succeeding sentence. Bank's liability is limited to
direct money Damages actually incurred in an amount not exceeding the
compensation for the service during the month in which such acts or omissions
occurred.
(b) In no event will Bank be liable for any
special, indirect, exemplary or consequential damages, including but not
limited to lost profits.
(c) Bank will be excused from failing to act or
delay in acting, and no such failure or delay shall constitute a breach of this
Agreement or otherwise give rise to any liability of Bank, if (i) such failure
or delay is caused by circumstances beyond Bank's reasonable control, including
but not limited to legal constraint, emergency conditions, action or inaction
of governmental, civil or military authority, fire, strike, lockout or other
labor dispute, war, riot, theft, flood, earthquake or other natural disaster,
breakdown of public or private or common carrier communications or transmission
facilities, equipment failure, or act, negligence or default of Pledgor or
Agent or (ii) such failure or delay resulted from Bank's reasonable belief that
the action would have violated any guideline, rule or regulation of any
governmental authority.
5. Pledgor hereby agrees to indemnify Bank against, and
hold it harmless from, any and all liabilities, claims, costs, expenses and
damages of any nature (including but not limited to allocated costs of staff
counsel, other reasonable attorneys' fees and any fees and expenses incurred in
enforcing this Agreement) in any way arising out of or relating to disputes or
legal actions concerning this Agreement or the Account.
XIV-3
197
This section does not apply to any cost or damage attributable to the gross
negligence or intentional misconduct of Bank. Pledgor's obligations under this
section shall survive termination of this Agreement.
6. (a) Pledgor and Agent each represent and warrant
to Bank that (i) this Agreement constitutes its duly authorized, legal, valid,
binding and enforceable obligation; (ii) the performance of its obligations
under this Agreement and the consummation of the transactions contemplated
hereunder will not (A) constitute or result in a breach of its certificate or
articles of incorporation, by-laws or partnership agreement, as applicable, or
the provisions of any material contract to which it is a party or by which it
is bound or (B) result in the violation of any law, regulation, judgment,
decree or governmental order applicable to it; and (iii) all approvals and
authorizations required to permit the execution, delivery, performance and
consummation of this Agreement and the transactions contemplated hereunder have
been obtained.
(b) Pledgor and Agent each agrees that it shall be
deemed to make and renew each representation and warranty in subsection 6(a) on
and as of each day on which it uses the service.
7. Pledgor represents and warrants that it has not
assigned or granted a security interest in the Account or any funds now or
hereafter deposited in the Account, except to Agent.
8. Pledgor agrees that:
(a) Agent shall have exclusive interest in and
control of the Account, and all items and funds received by, and held in the
Account shall be the sole and exclusive property of Agent for the benefit of
itself and the Lenders;
(b) It cannot, and will not, withdraw any monies
from the Account until such time as Agent advises Bank in writing that Agent no
longer claims any interest in the Account and the monies deposited and to be
deposited in the Account; and
(c) Except to the extent permitted under the
Credit Agreement, it will not permit the Account to become subject to any other
pledge, assignment, lien, charge or encumbrance of any kind, nature or
description, other than Agent's security interest referred to herein.
9. Agent acknowledges and agrees that Bank has the right
to charge the Account from time to time, as set forth in this Agreement and the
Account agreement, as said agreements are amended from time to time, and that
Agent has no right to the sums so withdrawn by Bank.
10. In addition to the original statement which will be
provided to Pledgor, Bank will provide Agent with a duplicate statement and
such other account information reasonably requested by Agent. Pledgor
authorizes Bank to provide any account information requested by Agent.
▇▇▇-▇
▇▇▇
▇▇. Pledgor agrees to pay to Bank, upon receipt of Bank's
invoice, all reasonable costs, expenses and attorneys' fees (including
reasonable allocated costs for in-house legal services) incurred by Bank in
connection with the preparation of this Agreement, the administration
(including any amendments), and enforcement of this Agreement and any
instrument or agreement required hereunder, including but not limited to any
such reasonable costs, expenses and fees arising out of the resolution of any
conflict, dispute, motion regarding entitlement to rights or rights of action,
or other action to enforce Bank's rights hereunder in a case arising under
▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code.
12. Notwithstanding any of the other provisions in this
Agreement, in the event of the commencement of a case pursuant to ▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ Code filed by or against Pledgor, or in the event of the
commencement of any similar case under then applicable federal or state law
providing for the relief of debtors or the protection of creditors by or
against Pledgor, Bank may act as Bank deems necessary to comply with all
applicable provisions of governing statutes and neither Pledgor nor Agent shall
assert any claim against Bank for so doing.
13. This Agreement may be amended only by a writing signed
by Pledgor, Agent and Bank; except that Bank's charges are subject to change by
Bank upon 60 days' prior written notice to Pledgor and Agent.
14. This Agreement may be executed in counterparts; all
such counterparts shall constitute but one and the same agreement.
15. Any written notice or other written communication to
be given to each party under this Agreement shall be addressed to the person at
the address set forth on the signature page of this Agreement or to such other
person or address as a party may specify in writing. Except as otherwise
expressly provided herein, any such notice shall be effective upon receipt.
16. This Agreement supersedes all prior understandings,
writings, proposals, representations and communications, oral or written, of
any party relating to the subject matter hereof.
17. Neither Pledgor nor Agent may assign any of its rights
under this Agreement without the prior written consent of Bank.
18. This Agreement shall be interpreted in accordance with
the laws of _______________, without giving effect to the conflicts of law
principles thereof.
[Remainder of page intentionally left blank]
XIV-5
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by their duly authorized officers as of the day and year first above
written.
FWT, INC.
Address for notices:
By:
------------------------------- -------------------------------
Name:
------------------------------- -------------------------------
Title:
------------------------------- -------------------------------
BT COMMERCIAL CORPORATION
Address for notices:
By: BT Commercial Corporation
------------------------------- ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Name: Mail Stop #4032
------------------------------- ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Title:
------------------------------- Attention: Bhartai Baliga
[BANK]
Address for notices:
By:
------------------------------- -------------------------------
Name:
------------------------------- -------------------------------
Title:
------------------------------- -------------------------------
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇▇
[FORM OF COLLATERAL ACCESS AGREEMENT]
RECORDING REQUESTED BY:
O'Melveny & ▇▇▇▇▇ LLP
AND WHEN RECORDED MAIL TO:
O'Melveny & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Re: FWT, INC.
---------------------------------------------------------------------------------------------------------------
Space above this line for recorder's use only
REAL PROPERTY HOLDER'S WAIVER AND CONSENT AGREEMENT
This REAL PROPERTY HOLDER'S WAIVER AND CONSENT AGREEMENT (this
"AGREEMENT") is dated as of November 12, 1997 and entered into by Delta Steel,
Inc., a Texas corporation ("REAL PROPERTY HOLDER"), to and for the benefit of
BT COMMERCIAL CORPORATION, located at ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as agent (the "AGENT") for the financial
institutions ("LENDERS") which are or may hereafter become parties to the
Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
A. FWT, INC., a Texas corporation ("BORROWER"), has
possession of and occupies all or a portion of the property described on
Exhibit A annexed hereto (the "PREMISES").
B. Borrower's interest in the Premises arises under the
lease agreement (the "LEASE") more particularly described on Exhibit B annexed
hereto, pursuant to which Real Property Holder has rights, upon the terms and
conditions set forth therein, to take possession of, and otherwise assert
control over, the Premises.
C. Agent, Lenders and certain other parties have entered
into that certain Credit Agreement dated as of November 12, 1997 (said Credit
Agreement, as amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT") with Borrower, and Borrower has executed a
security agreement and other collateral documents in relation to the Credit
Agreement.
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201
D. The extensions of credit made by Lenders to Borrower
under the Credit Agreement will be secured, in part, by all raw materials,
work-in-process, spare parts and finished goods inventory of Borrower
(including all inventory of Borrower now or hereafter located on the Premises
(the "INVENTORY")) and all equipment, machinery and other goods used in
Borrower's business (including all equipment of Borrower now or hereafter
located on the Premises (the "EQUIPMENT" and, together with the Inventory, the
"COLLATERAL")).
E. Agent has requested that Real Property Holder execute
this Agreement as a condition to the extension of credit to Borrower under the
Credit Agreement.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Real Property Holder hereby represents and warrants to,
and covenants and agrees with, Agent as follows:
1. Real Property Holder hereby (a) waives and releases
unto Agent and its successors and assigns any and all rights granted by or
under any present or future laws to levy or distraint for rent or any other
charges which may be due to Real Property Holder against the Collateral, and
any and all other claims, liens and demands of every kind which it now has or
may hereafter have against the Collateral, and (b) agrees that any rights it
may have in or to the Collateral, no matter how arising (to the extent not
effectively waived pursuant to clause (a) of this paragraph 1), shall be second
and subordinate to the rights of Agent in respect thereof. Real Property
Holder acknowledges that the Collateral is and will remain personal property
and not fixtures even though it may be affixed to or placed on the Premises.
2. Real Property Holder certifies that (a) Real Property
Holder is the landlord under the Lease, (b) the Lease is in full force and
effect and has not been amended, modified, or supplemented except as set forth
on Exhibit B annexed hereto, (c) there is no defense, offset, claim or
counterclaim by or in favor of Real Property Holder against Borrower under the
Lease or against the obligations of Real Property Holder under the Lease, (d)
no notice of default has been given under or in connection with the Lease which
has not been cured, and Real Property Holder has no knowledge of the occurrence
of any other default under or in connection with the Lease, and (e) except as
disclosed to Agent, no portion of the Premises is encumbered in any way by any
deed of trust or mortgage lien or ground or superior lease.
3. Real Property Holder consents to the installation or
placement of the Collateral on the Premises, and Real Property Holder grants to
Agent a license to enter upon and into the Premises to do any or all of the
following with respect to the Collateral: assemble, have appraised, display,
remove, maintain, prepare for sale or lease, repair, transfer, or sell (at
public or private sale). In entering upon or into the Premises, Agent hereby
agrees to indemnify, defend and hold Real Property Holder harmless from and
against any and all claims, judgments, liabilities, costs and expenses incurred
by Real Property Holder caused solely by Agent's entering upon or into the
Premises and taking any of the foregoing actions with respect to the
Collateral. Such costs shall include any
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202
damage to the Premises made by Agent in severing and/or removing the Collateral
therefrom.
4. Real Property Holder agrees that it will not prevent
Agent or its designee from entering upon the Premises at all reasonable times
to inspect or remove the Collateral. In the event that Real Property Holder
has the right to, and desires to, obtain possession of the Premises (either
through expiration of the Lease or termination thereof due to the default of
Borrower thereunder), Real Property Holder will deliver notice (the "REAL
PROPERTY HOLDER'S NOTICE") to Agent to that effect. Within the 45 day period
after Agent receives the Real Property Holder's Notice, Agent shall have the
right, but not the obligation, to cause the Collateral to be removed from the
Premises. During such 45 day period, Real Property Holder will not remove the
Collateral from the Premises nor interfere with Agent's actions in removing the
Collateral from the Premises or Agent's actions in otherwise enforcing its
security interest in the Collateral. Notwithstanding anything to the contrary
in this paragraph, Agent shall at no time have any obligation to remove the
Collateral from the Premises.
5. Real Property Holder shall send to Agent a copy of any
notice of default under the Lease sent by Real Property Holder to Borrower. In
addition, Real Property Holder shall send to Agent a copy of any notice
received by Real Property Holder of a breach or default under any other lease,
mortgage, deed of trust, security agreement or other instrument to which Real
Property Holder is a party which may affect Borrower's rights in, or possession
of, the Premises.
6. All notices to Agent under this Agreement shall be in
writing and sent to Agent at its address set forth on the signature page hereof
by telefacsimile, by mail, or by overnight delivery service.
7. The provisions of this Agreement shall continue in
effect until Real Property Holder shall have received Agent's written
certification that all amounts advanced under the Credit Agreement have been
paid in full.
8. This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and shall be construed and enforced in
accordance with, the internal laws of ___________________, without regard to
conflicts of laws principles.
[Remainder of page intentionally left blank]
XV-3
203
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered as of the day and year first set forth above.
DELTA STEEL, INC.
By:
----------------------------
Name:
Title:
By its acceptance hereof, as of the day and year first set
forth above, Agent agrees to be bound by the provisions hereof.
BT COMMERCIAL CORPORATION,
as Agent
By:
----------------------------
Name:
-----------------
Title:
-----------------
S-1
204
EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
Exhibit A-1
205
EXHIBIT B
DESCRIPTION OF LEASE
Exhibit B-1
206
EXHIBIT XVI
[FORM OF LOCK BOX AGREEMENT]
LOCK BOX AGREEMENT
This LOCK BOX AGREEMENT (this "AGREEMENT"), dated as of
November 12, 1997, is entered into by and among FWT, INC., a Texas corporation
("COMPANY"), BT COMMERCIAL CORPORATION, as agent ("AGENT"), and [Lockbox Bank]
("BANK").
PRELIMINARY STATEMENTS
A. Agent and certain financial institutions acting as
Lenders ("LENDERS") have entered into that certain Credit Agreement, dated as
of November 12, 1997 (said Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT") with Company, wherein the Company has granted the Lenders a
security interest in its present and future accounts receivable, and all
proceeds thereof and Company has agreed that all collections and proceeds of
such accounts receivable shall be remitted in kind to the Agent; and
B. In order to provide for a more efficient and faster
collection and deposit of said collection and proceeds the Agent and Company
desire to use the lock box service of Bank; and
C. Bank is willing to provide said service for Company
and the Agent commencing as of _____________________; and
WHEREAS, Schedule I to that certain Security Agreement, dated
as of November 12, 1997, by and between Company and Agent, sets forth all of
the Company's deposit accounts.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Post Office Box. The Bank will rent P.O. Box
______________________ (the "LOCK BOX") of the post office located at
___________________________________________ in the name of Company. Customers
of Company have been, or will be, instructed to mail their remittances to the
Lock Box.
2. Access to Mail. The Bank will have exclusive and
unrestricted access to the Lock Box and will have complete and exclusive
authority to receive, pick up and open all regular, registered, certified or
insured mail addressed to the Lock Box. On written demand of the Agent, Bank
shall cease its processing of said mail, and shall release some, in kind, to
the Agent, without the prior consent of Company, and the Agent
XVI-1
207
shall thereafter process said mail promptly in accordance with this Agreement.
Bank shall not inquire into the Agent's right to make such a demand under any
agreement among the Agent, the Lenders and Company, and shall be forever
released of all obligations with respect to said remittances upon release to
the Agent. Company shall have no control whatsoever over any mail, checks,
money orders, collections or other forms of remittances received in the Lock
Box. Appropriate instructions have been, or will be, given by the Bank to the
post office where the Lock Box is maintained, and such instructions shall not
be revoked without the prior written consent of the Agent. Any instruction
given to the Bank by Company without the prior or concurrent written agreement
of the Agent shall be void and of no force or effect. All mail addressed to
the Lock Box will be picked up by the Bank according to its regular collection
schedule.
3. Remittance Collection. On the day received the Bank
will open all mail addressed to the Lock Box and remove and inspect the
enclosures. All checks, money orders and other forms or orders for the payment
of money and other collection remittances (hereinafter collectively referred to
as "checks") shall be processed by the Bank as follows:
(1) Missing Date. All undated checks will be
dated by the Bank as of the postmark date and processed as hereafter provided.
(2) Postdated. Checks postdated up to three days
from the date of receipt shall be processed on the date indicated on the check.
Bank shall not deposit checks postdated more than three days, but shall notify
the Agent by telephone of such checks and follow the Agent's instructions for
disposition of such checks.
(3) Stale Date. Checks dated six months or more
prior to the date of collection will not be deposited and shall be sent to
Company, with a copy to the Agent.
(4) Different Amount. Where written and numeric
amounts differ, a check will be processed by the Bank only if the correct
amount can be determined from the accompanying documents, otherwise the check
will not be deposited and shall be sent to Company, with a copy to the Agent.
(5) Signature Missing. Checks which do not bear
the drawer's signature and do not indicate the drawer's identity will not be
deposited but shall be sent to Company, with a copy to the Agent. If, as
determined by the Bank, the drawer can be identified from the face of the
check, the Bank will deposit and process the check by affixing a stamped
impression requesting the drawer bank to contact the drawer for authority to
pay.
(6) Alterations and Restrictions. Checks with
alterations and checks bearing restrictive notations such as "Payment in Full"
will not be deposited, and the Bank shall notify the Agent of such checks by
telephone on the day of receipt and will deposit, hold or forward such checks
to Company, with a copy to the Agent, with accompanying written matter, if any,
as requested by the Agent.
XVI-2
208
(7) Foreign Banks and Currency. Checks drawn in
foreign currency will be processed in accordance with the Bank's normal
procedure for such checks and the Agent will be notified by advice of any such
checks on the date received by the Bank.
(8) Other Items. Any items which the Agent has
specifically instructed the Bank in writing not to process will not be
deposited and shall be sent to the Company, with a copy to the Agent.
Notwithstanding anything to the contrary contained in
this Agreement, Bank shall have no obligation to perform services on a basis
any different than it performs lockbox services in the normal course of
business, except with respect to receiving instructions from the Agent rather
than Company.
4. Processing Acceptable Checks. All checks, except
those not acceptable for deposit under the terms of this Agreement, shall be
deposited on the day of receipt by the Bank to Account No. ____________________
(the "LENDER ACCOUNT"), which is an account owned and controlled exclusively by
the Agent, and all such checks shall be endorsed as follows:
credited to account number ________________; absence
of endorsement hereby supplied and guarantied by
[Lockbox Bank];
Until a Notice of Redirection substantially in the
form of Exhibit A hereto (a "NOTICE") is delivered by Agent to Bank, all
available balances in the Lender Account will be transferred on a daily basis
via the automated clearing house system or wire transfer with the following
instructions:
----------------
----------------
[ABA No. ]
----------------
Account No.
----------------
Account Name: as Agent for
---------------- --------------
Ref.:
---------------
Attn:
---------------
Upon the delivery of a Notice by Agent to Bank, Bank shall transfer such funds
only as provided in such Notice.
All remittance advices, envelopes, and written matter (except as expressly
provided herein) received in the Lock Box together with photocopies of all
checks shall be sent to Company and, if requested by the Agent, copies of same
shall be sent to the Agent. Bank shall mail both a deposit advice for all
deposits to the Lender Account, on a daily basis, and a statement of account,
on a monthly basis, to both the Agent and Company and, if no deposit is made on
a bank business day, a deposit advice, correctly dated, will be sent to the
Agent and Company with the notation "No Deposit' appearing thereon. In
addition, Bank shall indicate by telephone to the Agent on each Bank business
day by 2:30 P.M. New York City time the amount of each day's deposit total.
XVI-3
209
5. Returned Checks. Checks deposited in the Lender
Account which are returned unpaid because of "Insufficient Funds," "Uncollected
Funds," etc. will be redeposited by the Bank only once, except that if a
returned check exceeds, $1,000 the Bank shall not redeposit such check but
shall telephone the Agent for further instructions on the day such check is
received. If redeposit is not warranted for reasons such as "account closed"
or "payment stopped" or if a check is returned a second time, the Bank will
charge the Lender Account and send a debit advice with the item to Company with
copies of same to Agent.
6. Remittance Received by Company. Remittances which are
sent directly to or received by Company shall be forwarded to the Lock Box on
the day received.
7. Record Maintenance. All deposit checks will be
microfilmed (on front and back) by the Bank and retained for five years by the
bank prior to destruction. Photocopies of filmed items will be provided to
the Agent or Company on request, within the five-year period.
8. Bank Charges. All charges of Bank for services
rendered pursuant to this agreement shall be billed to and paid directly by
Company. Said charges shall not be charged against remittances nor shall they
be debited to the Lender Account.
9. No Offset. Bank hereby agrees that it will treat all
remittances received in the Lock Box in accordance with the terms of this
agreement and it will not offset or assert any claim against the Lock Box or
the Lender Account or divert such remittances on account of any obligations
owed to the Bank by Company or by the party making the remittance, except as
provided in paragraph 5 hereof.
10. Bank Liability. In acting under this agreement Bank
shall not be liable to the Agent, the Lenders or Company for any error of
judgment, or for any act done or step taken or omitted by it in good faith,
except for gross negligence or willful misconduct.
11. Term. This agreement shall continue in full force and
effect until termination by the Bank on 60 days' prior written notice to all
other parties. The Agent may terminate this Agreement at any time which
termination shall be effective on receipt of written notice by Bank and in the
event of such termination, the Agent shall at its option, have the sole right
to remove mail from the Lock Box. Company shall have no right to unilaterally
terminate this Agreement.
12. Modification. This agreement may only be modified by
a writing signed by all of the parties hereto.
13. Addresses.
(1) All notices, including phone notice, daily
deposit advices, monthly statements of account and copies of all checks and the
documents which are to be given or sent to the Agent shall be sent to the
following address, and, where applicable, given at the following phone number:
XVI-4
210
BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop #4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Bhartai Baliga
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(2) All notices to Bank shall be sent to:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
Attn:
--------------------------------------------
Fax:
---------------------------------------------
(3) All notices and items which are to be sent to
Company shall be sent to:
FWT, Inc.
-------------------------------------------------------
-------------------------------------------------------
Attn:
--------------------------------------------
Fax:
---------------------------------------------
14. Agent Agreement. The Agent agrees that it will
indemnify and hold Bank harmless from any and all loss, liability, expense or
damage that Bank may incur in processing lockbox items in accordance with this
Agreement, including, without limitation, any loss that Bank experiences as a
result of returned items to the extent the balances in the Lender Account
referenced in paragraph 5 are insufficient to cover such losses or in the event
the balances in such Lender Account are insufficient to cover Bank charges
referenced in paragraph 8.
15. Limitation on Liability. The Agent and Company
acknowledge that the Bank undertakes to perform only such duties as are
expressly set forth in this Agreement and those which are normally undertaken
by Bank in connection with lockbox processing. Notwithstanding any other
provision of this Agreement, it is agreed by the parties that Bank shall not be
liable for any action taken by Bank or any of its directors, officers, agents
or employees in accordance with this Agreement, except for Bank's or such
natural person's gross negligence or wilful misconduct. In no event shall Bank
be liable for losses or delays resulting from force majeure, computer
malfunction, interruption of communication facilities, labor difficulties or
other causes beyond its reasonable control or for any indirect, special or
consequential damages.
16. Governing Law. This Agreement shall be governed in
accordance with the laws of ______________________, without giving effect to
the conflict of law principles thereof.
XVI-5
211
17. Effectiveness. This Agreement shall become effective
upon its receipt by the Agent, properly executed by all of the parties hereto.
[Remainder of page intentionally left blank]
XVI-6
212
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by their duly authorized officers as of the day and year first above
written.
BT COMMERCIAL CORPORATION, as Agent
By:
-----------------------------------
Title:
---------------------------------
[LOCKBOX BANK]
By:
-----------------------------------
Title:
---------------------------------
FWT, INC., as Company
By:
-----------------------------------
Title:
---------------------------------
S-1
213
EXHIBIT A
[Bank]
-----------------------------------------
-----------------------------------------
-----------------------------------------
Attn:
Re: Account for
------------- -----------------
Account No.
---------------------------
Ladies and Gentlemen:
Reference is made to that certain Lock Box Agreement, dated as
of November 12, 1997 (the "AGREEMENT") among you, us, as Agent, and
________________________________ pursuant to which we, for our benefit and for
the benefit of the Lenders (as defined in the Agreement), were given exclusive
interest and control of the Account. This notice is given in accordance with
the terms of the Agreement.
Effective immediately and continuing until we shall authorize
you in writing to do otherwise, we hereby direct you to transfer on a daily
basis all funds deposited into the Account with the instructions attached
hereto.
Very truly yours,
BT COMMERCIAL CORPORATION, as Agent
By:
-----------------------------------
Title:
--------------------------------
Exhibit A-1
214
EXHIBIT XVII
[FORM OF COMPANY SECURITY AGREEMENT]
COMPANY SECURITY AGREEMENT
This COMPANY SECURITY AGREEMENT (this "AGREEMENT") is dated as
of November 12, 1997 and entered into by and between FWT, INC., a Texas
corporation ("GRANTOR"), and BT COMMERCIAL CORPORATION, as agent for and
representative of (in such capacity herein called "SECURED PARTY") the
financial institutions ("LENDERS") party to the Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS
A. Secured Party and Lenders have entered into a Credit
Agreement dated as of November 12, 1997 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Grantor, pursuant to
which Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Grantor.
B. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Grantor shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Secured
Party as follows:
SECTION 1. GRANT OF SECURITY. Grantor hereby assigns for
security purposes to Secured Party, and hereby grants to Secured Party a
security interest in, all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be located
(the "COLLATERAL"):
(a) all equipment in all of its forms (including, but not
limited to, all computers, office furniture, and other office equipment), all
parts thereof and all accessions thereto (any and all such equipment, parts and
accessions being the "EQUIPMENT");
XVII-1
215
(b) all inventory in all of its forms (including, but not
limited to, (i) all goods held by Grantor for sale or lease or to be furnished
under contracts of service or so leased or furnished, (ii) all raw materials,
work in process, finished goods, and materials used or consumed in the
manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in Grantor's
business, (iii) all goods in which Grantor has an interest in mass or a joint
or other interest or right of any kind, and (iv) all goods which are returned
to or repossessed by Grantor, and (v) any inventory specifically listed in
Schedule I annexed hereto) and all accessions thereto and products thereof (all
such inventory, accessions and products being the "INVENTORY") and all
negotiable documents of title (including without limitation warehouse receipts,
dock receipts and bills of lading) issued by any Person covering any Inventory
(any such negotiable document of title being a "NEGOTIABLE DOCUMENT OF TITLE");
(c) all accounts, contract rights, chattel paper,
documents, instruments, general intangibles and other rights and obligations of
any kind arising out of or in connection with the sale or lease of goods or the
rendering of services and all rights in, to and under all security agreements,
leases and other contracts securing or otherwise relating to any such accounts,
contract rights, chattel paper, documents, instruments, investment property,
general intangibles or other obligations (any and all such accounts, contract
rights, chattel paper, documents, instruments, general intangibles and other
obligations being the "ACCOUNTS", and any and all such security agreements,
leases and other contracts being the "RELATED CONTRACTS");
(d) any agreements, if any, specifically listed in
Schedule I annexed hereto, as each such agreement may be amended, supplemented
or otherwise modified from time to time (said agreements, as so amended,
supplemented or otherwise modified, being referred to herein individually as an
"ASSIGNED AGREEMENT" and collectively as the "ASSIGNED AGREEMENTS"), including
without limitation (i) all rights of Grantor to receive moneys due or to become
due under or pursuant to the Assigned Agreements, (ii) all rights of Grantor to
receive proceeds of any insurance, indemnity, warranty or guaranty with respect
to the Assigned Agreements, (iii) all claims of Grantor for damages arising out
of any breach of or default under the Assigned Agreements, and (iv) all rights
of Grantor to terminate, amend, supplement, modify or exercise rights or
options under the Assigned Agreements, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder;
(e) all deposit accounts, including without limitation
any deposit accounts specifically listed in Schedule I annexed hereto, and all
deposit accounts maintained with Secured Party;
(f) all trademarks, tradenames, tradesecrets, business
names, patents, patent applications, licenses, copyrights, registrations and
franchise rights (including, but not limited to, any trademarks, copyrights or
patents listed in Schedule I hereto) (collectively, "INTELLECTUAL PROPERTY")
and all goodwill associated with any of the
XVII-2
216
foregoing and all renewals, reissues and extensions of, all applications for
any such trademarks, tradenames, patents, licenses, copyrights and
registrations;
(g) to the extent not included in any other paragraph of
this Section 1, all investment property and all other general intangibles
(including without limitation all production techniques, quality control
procedures and product specifications relating to the products and services
sold or delivered by Grantor and all tax refunds, rights to payment or
performance, choses in action and judgments taken on any rights or claims
included in the Collateral);
(h) all plant fixtures, business fixtures and other
fixtures and storage and office facilities, and all accessions thereto and
products thereof;
(i) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon; and
(j) all proceeds, products, rents and profits of or from
any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "PROCEEDS" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
Notwithstanding the foregoing, Collateral shall exclude any
intellectual property right, contracts and agreements to the extent, and only
to the extent, that such intellectual property right, contract or agreement
contains a provision enforceable at law and in equity that would be breached by
(or would result in the termination of such intellectual property, contract or
agreement upon) the grant of the security interest created herein pursuant to
the terms of this Agreement; provided, however, that if and when any
prohibition on the assignment, pledge or grant of a security interest in such
intellectual property right, contract or agreement is removed, the Secured
Party will be deemed to have been granted a security interest in such
intellectual property right, contract or agreement as of the date hereof, and
the Collateral will be deemed to include such intellectual property right,
contract or agreement.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Grantor now or hereafter
existing under
XVII-3
217
or arising out of or in connection with the Credit Agreement and the other Loan
Documents and all extensions or renewals thereof, whether for principal,
interest (including without limitation interest that, but for the filing of a
petition in bankruptcy with respect to Grantor, would accrue on such
obligations), reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly from Secured
Party or any Lender as a preference, fraudulent transfer or otherwise (all such
obligations and liabilities being the "UNDERLYING DEBT"), and all obligations
of every nature of Grantor now or hereafter existing under this Agreement (all
such obligations of Grantor, together with the Underlying Debt, being the
"SECURED OBLIGATIONS").
SECTION 3. GRANTOR REMAINS LIABLE. Anything contained herein
to the contrary notwithstanding, (a) Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Party of any of its rights hereunder shall not release Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or liability
under any contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Grantor
represents and warrants as follows:
(a) Ownership of Collateral. Except for Liens permitted
under the Credit Agreement and the security interest created by any Collateral
Document, Grantor owns the Collateral free and clear of any Lien. Except for
any financing statements listed in Schedule III annexed hereto and such
financing statements as may have been filed in favor of Secured Party relating
to this Agreement, no effective financing statement or other instrument similar
in effect covering all or any part of the Collateral is on file in any filing
or recording office as of the date hereof.
(b) Location of Equipment and Inventory. All of the
Equipment and Inventory is, as of the date hereof, located at the places
specified in Schedule II annexed hereto.
(c) Negotiable Documents of Title. No Negotiable
Documents of Title are outstanding as of the date hereof with respect to any of
the Inventory (other than in respect of (i) Inventory with an aggregate value
not in excess of $50,000 or (ii) Inventory
XVII-4
218
which, in the ordinary course of business, is in transit either (A) from a
supplier to Grantor, (B) between the locations specified in Schedule II hereto,
or (C) to customers of Grantor).
(d) Office Locations; Other Names. The chief place of
business, the chief executive office and the office where Grantor keeps its
records regarding the Accounts and all originals of all chattel paper that
evidence Accounts is, and has been for the four month period preceding the date
hereof, located at the locations identified as such on Schedule II hereto.
Grantor has not in the past done, and does not now do, business under any other
name (including any trade-name or fictitious business name) except as set forth
on Schedule II hereto.
(e) Delivery of Certain Collateral. All notes and other
instruments (excluding checks) comprising any and all items of Collateral have
been delivered to Secured Party duly endorsed and accompanied by duly executed
instruments of transfer or assignment in blank.
(f) Patents, Trademarks and Copyrights. Schedule I
hereto includes all registered trademarks, patents and copyrights owned as of
the date hereof by Grantor in its own name. Each trademark, patent and
copyright listed on Schedule I hereto is valid, subsisting, unexpired,
enforceable and has not been abandoned (except where Grantor has determined
that they have immaterial value). No action or proceeding is pending which, if
adversely determined, could be reasonably expected to have a material adverse
effect on the value of any material trademark, patent or copyright listed on
Schedule I.
(g) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the grant by Grantor of
the security interest granted hereby, (ii) the execution, delivery or
performance of this Agreement by Grantor, or (iii) the perfection of or the
exercise by Secured Party of its rights and remedies hereunder (except for
filings of UCC financing statements, filings with the United States Patent and
Trademark Office, and any state trademark filing as identified by Grantor to
Secured Party, and as may have been taken by or at the direction of Grantor).
(h) Perfection. This Agreement, together with (i) the
filing of financing statements in the jurisdictions listed in Schedule II
hereto, (ii) the recording of the Company Patent Security Agreement in the
United States Trademark Office ("PTO"), (iii) the recording of the Company
Trademark Security Agreement in the PTO, and (iv) delivery to, and possession
by, the Secured Party, of notes and instruments constituting Collateral,
creates a valid, perfected and, except as may be permitted under the
Intercreditor Agreement with respect to machinery and equipment, first priority
security interest in the Collateral, securing the payment of the Secured
Obligations, and all filings and other actions necessary or desirable to
perfect and protect such security interest have been duly made or taken.
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(i) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party by or on behalf of Grantor with respect to
the Collateral is accurate and complete in all respects.
SECTION 5. FURTHER ASSURANCES.
(a) Grantor agrees that from time to time, at the expense
of Grantor, Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may reasonably request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
Grantor will: (i) ▇▇▇▇ conspicuously each item of chattel paper included in
the Accounts, each Related Contract and, at the request of Secured Party, each
of its records pertaining to the Collateral, with a legend, in form and
substance satisfactory to Secured Party, indicating that such Collateral is
subject to the security interest granted hereby, (ii) if any Account shall be
evidenced by a promissory note or other instrument (excluding checks), deliver
and pledge to Secured Party hereunder such note or instrument, duly endorsed
and accompanied by duly executed instruments of transfer or assignment, all in
form and substance satisfactory to Secured Party, and at the request of Secured
Party, deliver and pledge to Secured Party hereunder all original counterparts
of chattel paper constituting Collateral, duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to Secured Party, (iii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Secured Party may request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby, (iv) promptly after the acquisition by Grantor of any item of
Equipment which is covered by a certificate of title under a statute of any
jurisdiction under the law of which indication of a security interest on such
certificate is required as a condition of perfection thereof, at the request of
Secured Party, execute and file with the registrar of motor vehicles or other
appropriate authority in such jurisdiction an application or other document
requesting the notation or other indication of the security interest created
hereunder on such certificate of title, (v) within 30 days after the end of
each calendar quarter, deliver to Agent copies of all such applications or
other documents filed during such calendar quarter and copies of all such
certificates of title issued during such calendar quarter indicating the
security interest created hereunder in the items of Equipment covered thereby,
(vi) at any reasonable time, upon request by Secured Party, exhibit the
Collateral to and allow inspection of the Collateral by Secured Party, or
persons designated by Secured Party, and (vii) at Secured Party's request,
appear in and defend any action or proceeding that may affect Grantor's title
to or Secured Party's security interest in all or any part of the Collateral.
(b) If Grantor shall obtain rights to any new trademarks
or patents, the provisions of this Agreement shall automatically apply thereto.
Grantor shall promptly
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notify the Secured Party in writing of any rights to any new trademark
registrations or issued patent registrations acquired by Grantor after the date
hereof and of any applications therefor made after the date hereof.
Concurrently with such acquisition or with the filing of any such application
or registration, Grantor shall execute, deliver and record in all places where
the Secured Party deems necessary or desirable to perfect or protect its
interest in such Collateral an appropriate conditional assignment or other
agreement or instrument, in form and substance satisfactory to the Secured
Party, pursuant to which Grantor shall grant a security interest and
conditional assignment to the extent of its interest in such patent or
trademark as provided herein to the Secured Party, unless so doing would, in
the reasonable judgment of Grantor, after due inquiry, result in the grant of a
patent or registration of trademark in the name of the Secured Party, in which
event Grantor shall give written notice to the Secured Party as soon as
reasonably practicable and the filing shall instead by undertaken as soon as
practicable but in no case later than immediately following the grant or the
registration of the patent or trademark.
(c) Grantor hereby authorizes Secured Party to file (to
the extent 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 Grantor. Grantor agrees that a carbon, photographic or other
reproduction of this Agreement or of a financing statement signed by Grantor
shall be sufficient as a financing statement and may be filed as a financing
statement in any and all jurisdictions.
(d) Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
SECTION 6. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
(a) not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering the
Collateral;
(b) notify Secured Party of any change in Grantor's name,
identity or corporate structure within 15 days after such change;
(c) give Secured Party at least 30 days' prior written
notice of any change in Grantor's chief place of business, chief executive
office or residence or the office where Grantor keeps its records regarding the
Accounts and all originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable Grantor to
acquire rights in or the use of any Collateral, use such value for such
purposes;
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(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Collateral,
except to the extent the validity thereof is being contested in good faith;
provided that Grantor shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to the date of any proposed
sale under any judgement, writ or warrant of attachment entered or filed
against Grantor or any of the Collateral as a result of the failure to make
such payment; and
(f) shall use commercially reasonable efforts not to
permit the inclusion of any prohibitions on assignments, pledges or grants of
security interests in any licenses of Intellectual Property, contracts or
agreements entered into by Grantor after the date hereof.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND
INVENTORY. Grantor shall:
(a) keep the Equipment and Inventory at the places
therefor specified on Schedule II annexed hereto or, upon at least 30 days'
prior written notice to Secured Party, at such other places in jurisdictions
where all action that may be necessary or desirable, or that Secured Party may
request, in order to perfect and protect any security interest granted or
purported to be granted hereby, or to enable Secured Party to exercise and
enforce its rights and remedies hereunder, with respect to such Equipment and
Inventory shall have been taken;
(b) cause the Equipment to be maintained and preserved in
accordance with Grantor's past practices in good condition, ordinary wear and
tear excepted, and shall forthwith, or, in the case of any loss or damage to
any of the Equipment (other than obsolete or surplus Equipment) when subsection
(c) of Section 8 is not applicable, as quickly as practicable after the
occurrence thereof, make or cause to be made all repairs, replacements and
other improvements in connection therewith that are necessary or desirable to
such end. Grantor shall promptly furnish to Secured Party a statement
respecting any loss or damage to any of the Equipment that is material;
(c) keep correct and accurate records of the Inventory,
itemizing and describing the kind, type and quantity thereof, Grantor's cost
therefor and (where applicable) the current list prices therefor; and
(d) if any Inventory is in possession or control of any
of Grantor's agents or processors, if the aggregate book value of all such
Inventory exceeds $100,000, and in any event upon the occurrence of an Event of
Default, instruct such agent or processor to hold all such Inventory for the
account of Secured Party and subject to the instructions of Secured Party; and
(e) promptly upon the issuance and delivery to Grantor of
any Negotiable Document of Title (other than any one or more Negotiable
Documents of Title
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covering (i) Inventory with an aggregate value not in excess of $100,000 or
(ii) Inventory which, in the ordinary course of business, is in transit either
(A) from a supplier to Grantor, (B) between the locations specified in Schedule
II hereto, or (C) to customers of Grantor), deliver such Negotiable Document of
Title to Secured Party.
SECTION 8. INSURANCE.
(a) Grantor shall, at its own expense, maintain insurance
with respect to the Equipment and Inventory in accordance with the terms of the
Credit Agreement, in such amounts, against such risks, in such form and with
such insurers as shall be required under the Credit Agreement from time to
time. Grantor shall, if so requested by Secured Party, deliver to Secured
Party original or duplicate policies of such insurance and, as often as Secured
Party may reasonably request, a report of a reputable insurance broker with
respect to such insurance. Further, Grantor shall, at the request of Secured
Party, duly execute and deliver instruments of assignment of such insurance
policies to comply with the requirements of Section 5(a) and cause the
respective insurers to acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance
maintained by Grantor pursuant to this Section 8 may be paid directly to the
Person who shall have incurred liability covered by such insurance. In case of
any loss involving damage to Equipment or Inventory when subsection (c) of this
Section 8 is not applicable, Grantor shall make or cause to be made the
necessary repairs to or replacements of such Equipment or Inventory, and any
proceeds of insurance maintained by Grantor pursuant to this Section 8 shall be
paid to Grantor as reimbursement for the costs of such repairs or replacements.
(c) All insurance payments in respect of such Equipment
or Inventory shall be paid to and applied by Secured Party as specified in
subsection 6.4 of the Credit Agreement.
SECTION 9. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND
RELATED CONTRACTS.
(a) Grantor shall keep its chief place of business and
chief executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the location therefor specified in Section 4 or, upon at
least 30 days' prior written notice to Secured Party, at such other location in
a jurisdiction where all action that may be necessary or desirable, or that
Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby, or to enable
Secured Party to exercise and enforce its rights and remedies hereunder, with
respect to such Accounts and Related Contracts shall have been taken. Grantor
will hold and preserve such records and chattel paper and will permit
representatives of Secured Party at any time during normal business hours to
inspect and make abstracts from such records and chattel paper, and Grantor
agrees to render to Secured Party, at Grantor's cost and
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expense, such clerical and other assistance as may be reasonably requested with
regard thereto. Promptly upon the request of Secured Party, Grantor shall
deliver to Secured Party complete and correct copies of each Related Contract.
(b) Grantor shall, for not less than three years from the
date on which such Account arose, maintain (i) complete records of each
Account, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this subsection (c),
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to Grantor under the Accounts and Related Contracts. In connection
with such collections, Grantor may take (and, at Secured Party's direction,
shall take) such action as Grantor or Secured Party may deem necessary or
advisable to enforce collection of amounts due or to become due under the
Accounts; provided, however, that Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default or
a Potential Event of Default and upon written notice to Grantor of its
intention to do so, to notify the account debtors or obligors under any
Accounts of the assignment of such Accounts to Secured Party and to direct such
account debtors or obligors to make payment of all amounts due or to become due
to Grantor thereunder directly to Secured Party, to notify each Person
maintaining a lockbox or similar arrangement to which account debtors or
obligors under any Accounts have been directed to make payment to remit all
amounts representing collections on checks and other payment items from time to
time sent to or deposited in such lockbox or other arrangement directly to
Secured Party and, upon such notification and at the expense of Grantor, to
enforce collection of any such Accounts and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as Grantor
might have done. After receipt by Grantor of the notice from Secured Party
referred to in the proviso to the preceding sentence, (i) all amounts and
proceeds (including checks and other instruments) received by Grantor in
respect of the Accounts and the Related Contracts shall be received in trust
for the benefit of Secured Party hereunder, shall be segregated from other
funds of Grantor and shall be forthwith paid over or delivered to Secured Party
in the same form as so received (with any necessary endorsement) to be held as
cash Collateral and either (A) be released to Grantor so long as no Event of
Default shall have occurred and be continuing or (B) if any Event of Default
shall have occurred and be continuing, be applied as provided by Section 18,
and (ii) Grantor shall not adjust, settle or compromise the amount or payment
of any Account, or release wholly or partly any account debtor or obligor
thereof, or allow any credit or discount thereon.
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SECTION 10. SPECIAL PROVISIONS WITH RESPECT TO THE ASSIGNED
AGREEMENTS.
(a) Grantor shall at its expense:
(i) perform and observe all terms and provisions
of the Assigned Agreements to be performed or observed by it, maintain
the Assigned Agreements in full force and effect, enforce the Assigned
Agreements in accordance with their terms, and take all such action to
such end as may be from time to time reasonably requested by Secured
Party; and
(ii) from time to time (A) furnish to Secured
Party such information and reports regarding the Assigned Agreements
as Secured Party may reasonably request and (B) upon request of
Secured Party make such demands and requests for information and
reports or for action as Grantor is entitled to make under the
Assigned Agreements.
(b) Grantor shall not during the continuance of any Event
of Default:
(i) cancel or terminate any of the Assigned
Agreements or consent to or accept any cancellation or termination
thereof;
(ii) amend or otherwise modify the Assigned
Agreements or give any consent, waiver or approval thereunder;
(iii) waive any default under or breach of the
Assigned Agreements; or
(iv) take any other action in connection with the
Assigned Agreements that would impair the value of the interest or
rights of Grantor thereunder or that would impair the interest or
rights of Secured Party.
SECTION 11. DEPOSIT ACCOUNTS. Upon the occurrence and during
the continuation of an Event of Default, Secured Party may exercise dominion
and control over, and refuse to permit further withdrawals (whether of money,
securities, instruments or other property) from any deposit accounts maintained
with Secured Party constituting part of the Collateral.
SECTION 12. LICENSE OF PATENTS, TRADEMARKS, COPYRIGHTS, ETC.
Grantor hereby grants to Secured Party, effective upon the occurrence and
during the continuation of any Event of Default, the nonexclusive right and
license to use all trademarks, tradenames, copyrights, patents or technical
processes owned or used by Grantor that relate to the Collateral and any other
collateral granted by Grantor as security for the Secured Obligations, together
with any goodwill associated therewith, all to the extent necessary to enable
Secured Party to use, possess and realize on the
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Collateral and to enable any successor or assign to enjoy the benefits of the
Collateral. This right and license shall inure to the benefit of all
successors, assigns and transferees of Secured Party and its successors,
assigns and transferees, whether by voluntary conveyance, operation of law,
assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise.
Such right and license is granted free of charge, without requirement that any
monetary payment whatsoever be made to Grantor.
SECTION 13. TRANSFERS AND OTHER LIENS. Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the Credit
Agreement; or
(b) except for any Liens, if any, permitted under the
Credit Agreement and the security interest created by this Agreement, create or
suffer to exist any Lien upon or with respect to any of the Collateral to
secure the indebtedness or other obligations of any Person.
SECTION 14. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Grantor hereby irrevocably appoints Secured Party as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable, consistent with the provisions
of the Agreement, to accomplish the purposes of this Agreement, including
without limitation:
(a) to obtain and adjust insurance required to be
maintained by Grantor or paid to Secured Party pursuant to Section 8;
(b) during the continuation of any Event of Default, to
ask for, demand, collect, ▇▇▇ for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a) and (b)
above;
(d) during the continuation of any Event of Default, to
file any claims or take any action or institute any proceedings that Secured
Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Secured Party with respect to
any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon
or threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in
its sole discretion, any such payments made
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by Secured Party to become obligations of Grantor to Secured Party, due and
payable immediately without demand;
(f) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and other
documents relating to the Collateral; and
(g) upon the occurrence and during the continuation of an
Event of Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though Secured Party were the absolute owner thereof for all purposes, and
to do, at Secured Party's option and Grantor's expense, at any time or from
time to time, all acts and things that Secured Party deems necessary to
protect, preserve or realize upon the Collateral and Secured Party's security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as Grantor might do.
SECTION 15. SECURED PARTY MAY PERFORM. If Grantor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Grantor under Section 19.
SECTION 16. STANDARD OF CARE. The powers conferred on
Secured Party hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the exercise of reasonable care in the custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Secured Party shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property.
SECTION 17. REMEDIES. If any Event of Default shall have
occurred and be continuing, Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "CODE") (whether or not the Code applies to the affected
Collateral), and also may (a) require Grantor to, and Grantor hereby agrees
that it will at its expense and upon request of Secured Party forthwith,
assemble all or part of the Collateral as directed by Secured Party and make it
available to Secured Party at a place to be designated by Secured Party that is
reasonably convenient to both parties, (b) enter onto the property where any
Collateral is located and take possession thereof with or without judicial
process, (c) prior to the disposition of the Collateral, store, process, repair
or recondition the Collateral or otherwise prepare the Collateral for
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disposition in any manner to the extent Secured Party deems appropriate, (d)
take possession of Grantor's premises or place custodians in exclusive control
thereof, remain on such premises and use the same and any of Grantor's
equipment for the purpose of completing any work in process, taking any actions
described in the preceding clause (c) and collecting any Secured Obligation,
and (e) without notice except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any of
Secured Party's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as Secured Party may deem commercially reasonable. Secured Party or any
Lender may be the purchaser of any or all of the Collateral at any such sale
and Secured Party, as agent for and representative of Lenders (but not any
Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing), shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured Party at such sale. Each purchaser
at any such sale shall hold the property sold absolutely free from any claim or
right on the part of Grantor, and Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days' notice to 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. Secured Party
shall not be obligated to make any sale of Collateral regardless of notice of
sale having been given. Secured Party may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which
it was so adjourned. Grantor hereby waives any claims against Secured Party
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if Secured Party accepts the first offer
received and does not offer such Collateral to more than one offeree. If the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay all the Secured Obligations, Grantor shall be liable for the deficiency and
the fees of any attorneys employed by Secured Party to collect such deficiency.
SECTION 18. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of Secured Party, be held by
Secured Party as Collateral for, and/or then, or at any other time thereafter,
applied in full or in part by Secured Party against, the Secured Obligations in
the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or
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incurred by Secured Party in connection therewith, and all amounts for
which Secured Party is entitled to indemnification hereunder and all
advances made by Secured Party hereunder for the account of Grantor,
and to the payment of all costs and expenses paid or incurred by
Secured Party in connection with the exercise of any right or remedy
hereunder, all in accordance with Section 19;
SECOND: To the payment of all other Secured Obligations in
such order as Secured Party shall elect; and
THIRD: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 19. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Secured Party and each
Lender from and against any and all claims, losses and liabilities in any way
relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
from Secured Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the
amount of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Grantor to perform or observe any of the provisions hereof.
SECTION 20. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Collateral
and shall (a) remain in full force and effect until the payment in full of the
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, (b) be binding
upon Grantor, its successors and assigns, and (c) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit of Secured Party
and its permitted successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), but subject to the provisions of
subsection 10.1 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise. Upon the payment in full of all Secured
Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Grantor. Upon any such termination Secured Party will, at Grantor's
expense, execute and deliver
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to Grantor such documents as Grantor shall reasonably request to evidence such
termination.
SECTION 21. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders. Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
notice of resignation as Secured Party under this Agreement; removal of Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute
removal as Secured Party under this Agreement; and appointment of a successor
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
appointment of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Agent under subsection 9.5 of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Secured Party
hereunder.
SECTION 22. AMENDMENTS; ETC. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by Grantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by Secured Party and, in the case of any such
amendment or modification, by Grantor. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
SECTION 23. NOTICES. Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served,
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telexed or sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by courier
service, upon receipt of telefacsimile or telex, or four Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be
as set forth under such party's name on the signature pages hereof or, as to
either party, such other address as shall be designated by such party in a
written notice delivered to the other party hereto.
SECTION 24. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 25. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 26. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 27. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement,
terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of
New York are used herein as therein defined.
SECTION 28. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF
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NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT GRANTOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Grantor hereby agrees that
service of all process in any such proceeding in any such court may be made by
registered or certified mail, return receipt requested, to Grantor at its
address provided in Section 23, such service being hereby acknowledged by
Grantor to be sufficient for personal jurisdiction in any action against
Grantor in any such court and to be otherwise effective and binding service in
every respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of Secured Party to
bring proceedings against Grantor in the courts of any other jurisdiction.
SECTION 29. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
LAW, GRANTOR AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.
Grantor and Secured Party each acknowledge that this waiver is a material
inducement for Grantor and Secured Party to enter into a business relationship,
that Grantor and Secured Party have already relied on this waiver in entering
into this Agreement and that each will continue to rely on this waiver in their
related future dealings. Grantor and Secured Party further warrant and
represent that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
SECTION 30. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
FWT, INC.
By:
-----------------------------------------
Title:
-----------------------------
Notice Address:
FWT, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
BT COMMERCIAL CORPORATION
By:
-----------------------------------------
Title:
-----------------------------
Notice Address:
BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop # 4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Bhartai ▇▇▇▇▇▇
▇-▇
233
SCHEDULE I
TO SECURITY AGREEMENT
Supplemental Descriptions of Collateral
Assigned Agreements:
Deposit Accounts:
Trademark Registrations:
Copyright Registrations:
Patent Registrations:
234
SCHEDULE II
TO SECURITY AGREEMENT
Tradenames:
Locations of Equipment:
Locations of Inventory:
Filing Jurisdictions:
235
SCHEDULE III
TO SECURITY AGREEMENT
EXISTING FINANCING STATEMENTS
236
EXHIBIT XVIII
[FORM OF COMPANY PLEDGE AGREEMENT]
COMPANY PLEDGE AGREEMENT
This COMPANY PLEDGE AGREEMENT (this "AGREEMENT") is dated as
of November 12, 1997 and entered into by and between FWT, INC., a Texas
corporation ("PLEDGOR"), and BT COMMERCIAL CORPORATION, as agent for and
representative of (in such capacity herein called "SECURED PARTY") the
financial institutions ("LENDERS") party to the Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS
A. Pledgor is the legal and beneficial owner of (i) the
shares of stock (the "PLEDGED SHARES") described in Part A of Schedule I
annexed hereto and issued by the corporations named therein and (ii) the
indebtedness (the "PLEDGED DEBT") described in Part B of said Schedule I and
issued by the obligors named therein.
B. Secured Party and Lenders have entered into a Credit
Agreement dated as of November 12, 1997 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Pledgor pursuant to
which Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Pledgor.
C. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Pledgor shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
SECTION 1. PLEDGE OF SECURITY. Pledgor hereby pledges to
Secured Party, and hereby grants to Secured Party a security interest in, all
of Pledgor's right, title and interest in and to the following (the "PLEDGED
COLLATERAL"):
(a) the Pledged Shares and the certificates representing
the Pledged Shares and any interest of Pledgor in the entries on the books of
any financial
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intermediary pertaining to the Pledged Shares, and all dividends, cash,
warrants, rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Shares;
(b) the Pledged Debt and the instruments evidencing the
Pledged Debt, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Debt;
(c) all additional shares of, and all securities
convertible into and warrants, options and other rights to purchase or
otherwise acquire, stock of any issuer of the Pledged Shares from time to time
acquired by Pledgor in any manner (which shares shall be deemed to be part of
the Pledged Shares), the certificates or other instruments representing such
additional shares, securities, warrants, options or other rights and any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to such additional shares, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such additional shares, securities, warrants, options or other rights;
(d) all additional indebtedness from time to time owed to
Pledgor by any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness;
(e) all shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire, stock
of any Person that, after the date of this Agreement, becomes, as a result of
any occurrence, a direct Subsidiary of Pledgor (which shares shall be deemed to
be part of the Pledged Shares), the certificates or other instruments
representing such shares, securities, warrants, options or other rights and any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to such shares, and all dividends, cash, warrants, rights,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares, securities, warrants, options or other rights;
(f) all indebtedness from time to time owed to Pledgor by
any Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct or indirect Subsidiary of Pledgor, and all interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such indebtedness; and
(g) to the extent not covered by clauses (a) through (f)
above, all proceeds of any or all of the foregoing Pledged Collateral. For
purposes of this Agreement, the term "PROCEEDS" includes whatever is receivable
or received when
XVIII-2
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Pledged Collateral or proceeds are sold, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary, and
includes, without limitation, proceeds of any indemnity or guaranty payable to
Pledgor or Secured Party from time to time with respect to any of the Pledged
Collateral.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Pledged Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Pledgor now or hereafter
existing under or arising out of or in connection with the Credit Agreement
and the other Loan Documents and all extensions or renewals thereof, whether
for principal, interest (including without limitation interest that, but for
the filing of a petition in bankruptcy with respect to Pledgor, would accrue on
such obligations), reimbursement of amounts drawn under Letters of Credit,
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any
portion of such obligations or liabilities that are paid, to the extent all or
any part of such payment is avoided or recovered directly or indirectly from
Secured Party or any Lender as a preference, fraudulent transfer or otherwise
(all such obligations and liabilities being the "UNDERLYING DEBT"), and all
obligations of every nature of Pledgor now or hereafter existing under this
Agreement (all such obligations of Pledgor, together with the Underlying Debt,
being the "SECURED OBLIGATIONS").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates
or instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and
shall be in suitable form for transfer by delivery or, as applicable, shall be
accompanied by Pledgor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Secured Party. Secured Party shall have the right, at any time
in its discretion and without notice to Pledgor, to transfer to or to register
in the name of Secured Party or any of its nominees any or all of the Pledged
Collateral, subject only to the revocable rights specified in Section 7(a). In
addition, Secured Party shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor
represents and warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral. All
of the Pledged Shares have been duly authorized and validly issued and are
fully paid and non-assessable. All of the Pledged Debt has been duly
authorized, authenticated or issued, and delivered
XVIII-3
239
and is the legal, valid and binding obligation of the issuers thereof (subject
to bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally and equitable principles relating to
enforceability) and is not in default.
(b) Description of Pledged Collateral. The Pledged
Shares constitute the percentage of the issued and outstanding shares of stock
of each of the direct Subsidiaries of Pledgor set forth on Schedule I hereto,
and there are no outstanding warrants, options or other rights to purchase, or
other agreements outstanding with respect to, or property that is now or
hereafter convertible into, or that requires the issuance or sale of, any
Pledged Shares. The Pledged Debt constitutes all of the issued and outstanding
intercompany indebtedness evidenced by a promissory note of the respective
issuers thereof owing to Pledgor.
(c) Ownership of Pledged Collateral. Pledgor is the
legal, record and beneficial owner of the Pledged Collateral free and clear of
any Lien except for the security interest created by this Agreement, except for
Permitted Encumbrances.
(d) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the pledge by Pledgor
of the Pledged Collateral pursuant to this Agreement and the grant by Pledgor
of the security interest granted hereby, (ii) the execution, delivery or
performance of this Agreement by Pledgor, or (iii) the exercise by Secured
Party of the voting or other rights, or the remedies in respect of the Pledged
Collateral, provided for in this Agreement (except for any UCC financing
statements and as may be required in connection with the pledging of and a
disposition of Pledged Collateral by laws affecting the offering and sale of
securities generally).
(e) Perfection. Assuming Secured Party's continued
possession of the certificates representing the Pledged Shares and notes
representing Pledged Debt, the pledge of the Pledged shares and notes
representing Pledged Debt pursuant to this Agreement creates a valid and
perfected first priority security interest in the Pledged Shares and notes
representing Pledged Debt, securing the payment of the Secured Obligations.
(f) Margin Regulations. The pledge of the Pledged
Collateral pursuant to this Agreement does not violate Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System.
SECTION 5. TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED
COLLATERAL; ETC. Pledgor shall:
(a) not, except to the extent permitted by the Credit
Agreement, (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral,
(ii) create or suffer to exist any Lien upon or with respect to any of the
Pledged Collateral, except for the security interest under this
XVIII-4
240
Agreement, or (iii) permit any issuer of Pledged Shares to merge or consolidate
unless all the outstanding capital stock of the surviving or resulting
corporation is, upon such merger or consolidation, pledged hereunder and no
cash, securities or other property is distributed in respect of the outstanding
shares of any other constituent corporation; provided that in the event Pledgor
makes an Asset Sale permitted by the Credit Agreement and the assets subject to
such Asset Sale are Pledged Shares, Secured Party shall release the Pledged
Shares that are the subject of such Asset Sale to Pledgor free and clear of the
Lien under this Agreement concurrently with the consummation of such Asset
Sale; provided, further that, as a condition precedent to such release, Secured
Party shall have received evidence satisfactory to it that arrangements
satisfactory to it have been made for delivery to Secured Party of the net cash
proceeds of such Asset Sale to the extent contemplated in the Credit Agreement;
(b) (i) cause each issuer of Pledged Shares that is a
Subsidiary of Pledgor not to issue any stock or other securities in addition to
or in substitution for the Pledged Shares issued by such issuer, except to
Pledgor, (ii) pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all additional shares of stock or other securities
of each issuer of Pledged Shares, and (iii) pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all shares of stock
issued to or otherwise acquired by Pledgor of any Person that, after the date
of this Agreement, becomes, as a result of any occurrence, a direct Subsidiary
of Pledgor;
(c) (i) pledge hereunder, immediately upon their
issuance, any and all instruments or other evidences of additional indebtedness
from time to time owed to Pledgor by any obligor on the Pledged Debt, and (ii)
pledge hereunder, immediately upon their issuance, any and all instruments or
other evidences of indebtedness from time to time owed to Pledgor by any Person
that after the date of this Agreement becomes, as a result of any occurrence, a
direct or indirect Subsidiary of Pledgor;
(d) promptly deliver to Secured Party all written notices
received by it as holder of the Pledged Collateral; and
(e) pay promptly when due all taxes, assessments and
governmental charges or levies imposed upon, and all claims against, the
Pledged Collateral, except to the extent the validity thereof is being
contested in good faith; provided that Pledgor shall in any event pay such
taxes, assessments, charges, levies or claims not later than five days prior to
the date of any proposed sale under any judgement, writ or warrant of
attachment entered or filed against Pledgor or any of the Pledged Collateral as
a result of the failure to make such payment.
XVIII-5
241
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.
(a) Pledgor agrees that from time to time, at the expense
of Pledgor, Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party
to exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral. Without limiting the generality of the foregoing, Pledgor
will: (i) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as Secured Party may reasonably request, in order to perfect
and preserve the security interests granted or purported to be granted hereby
and (ii) at Secured Party's request, appear in and defend any action or
proceeding that may affect Pledgor's title to or Secured Party's security
interest in all or any part of the Pledged Collateral.
(b) Pledgor further agrees that it will, upon obtaining
any additional shares of stock or other securities required to be pledged
hereunder as provided in Section 5(b) or (c), promptly (and in any event within
five Business Days) deliver to Secured Party a Pledge Amendment, duly executed
by Pledgor, in substantially the form of Schedule II annexed hereto (a "PLEDGE
AMENDMENT"), in respect of the additional Pledged Shares or Pledged Debt to be
pledged pursuant to this Agreement. Pledgor hereby authorizes Secured Party to
attach each Pledge Amendment to this Agreement and agrees that all Pledged
Shares or Pledged Debt listed on any Pledge Amendment delivered to Secured
Party shall for all purposes hereunder be considered Pledged Collateral;
provided that the failure of Pledgor to execute a Pledge Amendment with respect
to any additional Pledged Shares or Pledged Debt pledged pursuant to this
Agreement shall not impair the security interest of Secured Party therein or
otherwise adversely affect the rights and remedies of Secured Party hereunder
with respect thereto.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not inconsistent with
the terms of this Agreement or the Credit Agreement; provided,
however, that Pledgor shall not exercise or refrain from exercising
any such right if Secured Party shall have notified Pledgor that, in
Secured Party's judgment, such action would have a material adverse
effect on the value of the Pledged Collateral or any part thereof; and
provided, further, that Pledgor shall give Secured Party at least five
Business Days' prior written notice of the manner in which it intends
to exercise, or the reasons for refraining from exercising, any such
right. It is understood, however, that neither (A) the voting by
Pledgor of any Pledged Shares for or Pledgor's consent to the election
of directors at a regularly scheduled annual or other meeting of
stockholders (or by
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written consent) or with respect to incidental matters at any such
meeting nor (B) Pledgor's consent to or approval of any action
otherwise permitted under this Agreement and the Credit Agreement
shall be deemed inconsistent with the terms of this Agreement or the
Credit Agreement within the meaning of this Section 7(a)(i), and no
notice of any such voting or consent need be given to Secured Party;
(ii) Pledgor shall be entitled to receive and retain, and
to utilize free and clear of the lien of this Agreement (but subject
to the provisions of the Credit Agreement), any and all dividends,
principal and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
(A) dividends, principal and interest paid or
payable other than in cash in respect of, and instruments and
other property received, receivable or otherwise distributed
in respect of, or in exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged Collateral in
connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus
or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed
in redemption of or in exchange for any Pledged Shares,
shall be, and shall forthwith be delivered to Secured Party to hold
as, Pledged Collateral and shall, if received by Pledgor, be received
in trust for the benefit of Secured Party, be segregated from the
other property or funds of Pledgor and be forthwith delivered to
Secured Party as Pledged Collateral in the same form as so received
(with all necessary indorsements); and
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies,
dividend payment orders and other instruments as Pledgor may from time
to time reasonably request for the purpose of enabling Pledgor to
exercise the voting and other consensual rights which it is entitled
to exercise pursuant to paragraph (i) above and to receive the
dividends, principal or interest payments which it is authorized to
receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuation of an
Event of Default:
(i) upon written notice from Secured Party to Pledgor,
all rights of Pledgor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to
Section 7(a)(i) shall be suspended, and
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all such rights shall thereupon become vested in Secured Party who
shall thereupon have the sole right to exercise such voting and other
consensual rights;
(ii) all rights of Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to receive
and retain pursuant to Section 7(a)(ii) shall be suspended, and all
such rights shall become vested in Secured Party who shall have the
sole right to receive and hold as Pledged Collateral such dividends
and interest payments; and
(iii) all dividends, principal and interest payments which
are received by Pledgor contrary to the provisions of paragraph (ii)
of this Section 7(b) shall be received in trust for the benefit of
Secured Party, shall be segregated from other funds of Pledgor and
shall forthwith be paid over to Secured Party as Pledged Collateral in
the same form as so received (with any necessary indorsements).
(c) In order to permit Secured Party to exercise the
voting and other consensual rights which it may be entitled to exercise
pursuant to Section 7(b)(i) and to receive all dividends and other
distributions which it may be entitled to receive under Section 7(a)(ii) or
Section 7(b)(ii), (i) Pledgor shall promptly execute and deliver (or cause to
be executed and delivered) to Secured Party all such proxies, dividend payment
orders and other instruments as Secured Party may from time to time reasonably
request and (ii) without limiting the effect of the immediately preceding
clause (i), Pledgor hereby grants to Secured Party an irrevocable proxy to vote
the Pledged Shares and to exercise all other rights, powers, privileges and
remedies to which a holder of the Pledged Shares would be entitled (including,
without limitation, giving or withholding written consents of shareholders,
calling special meetings of shareholders and voting at such meetings), which
proxy shall be effective, automatically and without the necessity of any action
(including any transfer of any Pledged Shares on the record books of the issuer
thereof) by any other Person (including the issuer of the Pledged Shares or any
officer or agent thereof), during the existence of an Event of Default.
SECTION 8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Pledgor
hereby irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with
full authority in the place and stead of Pledgor and in the name of Pledgor,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including
without limitation:
(a) to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part of the Pledged
Collateral without the signature of Pledgor (to the extent permitted by
applicable law);
(b) during the continuance of any Event of Default, to
ask, demand, collect, ▇▇▇ for, recover, compound, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Pledged Collateral;
XVIII-8
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(c) during the continuance of any Event of Default, to
receive, endorse and collect any instruments made payable to Pledgor
representing any dividend, principal or interest payment or other distribution
in respect of the Pledged Collateral or any part thereof and to give full
discharge for the same; and
(d) during the continuance of any Event of Default, to
file any claims or take any action or institute any proceedings that Secured
Party may deem necessary or desirable for the collection of any of the Pledged
Collateral or otherwise to enforce the rights of Secured Party with respect to
any of the Pledged Collateral.
SECTION 9. SECURED PARTY MAY PERFORM. If Pledgor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Pledgor under Section
13(b).
SECTION 10. STANDARD OF CARE. The powers conferred on
Secured Party hereunder are solely to protect its interest in the Pledged
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the exercise of reasonable care in the custody of any Pledged
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Secured Party shall have no duty as to any Pledged Collateral, it
being understood that Secured Party shall have no responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged Collateral,
whether or not Secured Party has or is deemed to have knowledge of such
matters, (b) taking any necessary steps (other than steps taken in accordance
with the standard of care set forth above to maintain possession of the Pledged
Collateral) to preserve rights against any parties with respect to any Pledged
Collateral, (c) taking any necessary steps to collect or realize upon the
Secured Obligations or any guarantee therefor, or any part thereof, or any of
the Pledged Collateral, or (d) initiating any action to protect the Pledged
Collateral against the possibility of a decline in market value. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Pledged Collateral in its possession if such Pledged Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property consisting of negotiable securities.
SECTION 11. REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Pledged Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected Pledged
Collateral), and Secured Party may also in its sole discretion, without notice
except as specified below, sell the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange or broker's
board or at any of Secured Party's offices or elsewhere, for cash, on credit or
for future delivery, at such time or
XVIII-9
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times and at such price or prices and upon such other terms as Secured Party
may deem commercially reasonable, irrespective of the impact of any such sales
on the market price of the Pledged Collateral. Secured Party or any Lender may
be the purchaser of any or all of the Pledged Collateral at any such sale and
Secured Party, as agent for and representative of Lenders (but not any Lender
or Lenders in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing), shall be entitled, for the purpose
of bidding and making settlement or payment of the purchase price for all or
any portion of the Pledged Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Pledged Collateral payable by Secured Party at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from
any claim or right on the part of Pledgor, and Pledgor hereby waives (to the
extent permitted by applicable law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. Pledgor agrees that, to
the extent notice of sale shall be required by law, at least ten days' notice
to Pledgor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Pledgor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Pledged Collateral to more
than one offeree. If the proceeds of any sale or other disposition of the
Pledged Collateral are insufficient to pay all the Secured Obligations, Pledgor
shall be liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as from time to time
amended (the "SECURITIES ACT"), and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of the
Pledged Collateral conducted without prior registration or qualification of
such Pledged Collateral under the Securities Act and/or such state securities
laws, to limit purchasers to those who will agree, among other things, to
acquire the Pledged Collateral for their own account, for investment and not
with a view to the distribution or resale thereof. Pledgor acknowledges that
any such private sales may be at prices and on terms less favorable than those
obtainable through a public sale without such restrictions (including, without
limitation, a public offering made pursuant to a registration statement under
the Securities Act) and Pledgor agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that Secured
Party shall have no obligation to engage in public sales and no obligation to
delay the sale of any Pledged Collateral for the period of time necessary to
permit the issuer thereof to register it for a form of public sale requiring
registration under the Securities
XVIII-10
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Act or under applicable state securities laws, even if such issuer would, or
should, agree to so register it (and Pledgor has no obligation to cause any
such registration).
(c) If Secured Party determines to exercise its right to
sell any or all of the Pledged Collateral, upon written request, Pledgor shall
and shall cause each issuer (which is a Subsidiary of Pledgor) of any Pledged
Shares to be sold hereunder from time to time to furnish to Secured Party all
such information as Secured Party may request in order to determine the number
of shares and other instruments included in the Pledged Collateral which may be
sold by Secured Party in exempt transactions under the Securities Act and the
rules and regulations of the Securities and Exchange Commission thereunder, as
the same are from time to time in effect.
SECTION 12. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Pledged Collateral may, in the discretion of Secured Party, be held
by Secured Party as Pledged Collateral for, and/or then, or at any time
thereafter, applied in full or in part by Secured Party against, the Secured
Obligations in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in
connection therewith, and all amounts for which Secured Party is
entitled to indemnification hereunder and all advances made by Secured
Party hereunder for the account of Pledgor, and to the payment of all
costs and expenses paid or incurred by Secured Party in connection
with the exercise of any right or remedy hereunder, all in accordance
with Section 13;
SECOND: To the payment of all other Secured Obligations in
such order as Secured Party shall elect; and
THIRD: To the payment to or upon the order of Pledgor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 13. INDEMNITY AND EXPENSES.
(a) Pledgor agrees to indemnify Secured Party and each
Lender from and against any and all claims, losses and liabilities in any way
relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
from Secured Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
XVIII-11
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(b) Pledgor shall pay to Secured Party upon demand the
amount of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Pledgor to perform or observe any of the provisions hereof.
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (a) remain in full force and effect until the payment in
full of all Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Pledgor, its successors and assigns, and (c) inure,
together with the rights and remedies of Secured Party hereunder, to the
benefit of Secured Party and its permitted successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), but subject to the
provisions of subsection 10.1 of the Credit Agreement, any Lender may assign or
otherwise transfer any Loans held by it to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to Lenders herein or otherwise. Upon the payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Pledged
Collateral shall revert to Pledgor. Upon any such termination Secured Party
will, at Pledgor's expense, execute and deliver to Pledgor such documents as
Pledgor shall reasonably request to evidence such termination and Pledgor shall
be entitled to the return, upon its request and at its expense, against receipt
and without recourse to Secured Party, of such of the Pledged Collateral as
shall not have been sold or otherwise applied pursuant to the terms hereof.
SECTION 15. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders. Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Pledged
Collateral), solely in accordance with this Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
notice of resignation as Secured Party under this Agreement; removal of Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute
removal as Secured Party under this Agreement; and appointment of a successor
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
appointment of a successor Secured Party under this Agreement.
XVIII-12
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Upon the acceptance of any appointment as Agent under subsection 9.5 of the
Credit Agreement by a successor Agent, that successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Secured Party
hereunder.
SECTION 16. AMENDMENTS; ETC. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by Pledgor therefrom, shall in any event be effective unless the same
shall be in writing and signed by Secured Party and, in the case of any such
amendment or modification, by Pledgor. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
SECTION 17. NOTICES. Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex, or four Business
Days after depositing it in the United States mail with postage prepaid and
properly addressed. For the purposes hereof, the address of each party hereto
shall be as set forth under such party's name on the signature pages hereof or,
as to either party, such other address as shall be designated by such party in
a written notice delivered to the other party hereto.
SECTION 18. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 19. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity,
XVIII-13
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legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 20. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 21. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the Credit
Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code in the
State of New York are used herein as therein defined.
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Pledgor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Pledgor at its address provided in Section 17, such service being
hereby acknowledged by Pledgor to be sufficient for personal jurisdiction in
any action against Pledgor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Secured Party to bring proceedings against Pledgor in the courts of any other
jurisdiction.
SECTION 23. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
LAW, PLEDGOR AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The
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scope of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. Pledgor and
Secured Party each acknowledge that this waiver is a material inducement for
Pledgor and Secured Party to enter into a business relationship, that Pledgor
and Secured Party have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Pledgor and Secured Party further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
SECTION 24. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
FWT, INC.
By:
------------------------------
Title:
Notice Address:
FWT, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
BT COMMERCIAL CORPORATION
By:
------------------------------
Title:
Notice Address:
BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop #4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Bhartai Baliga
S-1
252
SCHEDULE I
Attached to and forming a part of the Company Pledge Agreement
dated as of November 12, 1997 between FWT, Inc., as Pledgor, and BT Commercial
Corporation, as Secured Party.
Part A
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
------------ -------- ------------ ----- ---------
Part B
Debt Issuer Amount of Indebtedness
----------- ----------------------
I-1
253
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________, 19__, is delivered
pursuant to Section 6(b) of the Company Pledge Agreement referred to below.
The undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge Agreement dated November 12, 1997, as amended and supplemented to date
hereof, between the undersigned and BT Commercial Corporation, as Secured Party
(the "PLEDGE AGREEMENT," capitalized terms defined therein being used herein as
therein defined), and that the [Pledged Shares] [Pledged Debt] listed on this
Pledge Amendment shall be deemed to be part of the [Pledged Shares] [Pledged
Debt] and shall become part of the Pledged Collateral and shall secure all
Secured Obligations.
FWT, INC.
By:
------------------------------
Title:
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
------------ -------- ------------ ----- ---------
Debt Issuer Amount of Indebtedness
----------- ----------------------
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EXHIBIT XIX
[FORM OF COMPANY TRADEMARK SECURITY AGREEMENT]
COMPANY TRADEMARK COLLATERAL SECURITY AGREEMENT
This COMPANY TRADEMARK COLLATERAL SECURITY AGREEMENT (this
"AGREEMENT") is dated as of November 12, 1997 and entered into by and between
FWT, INC., a Texas corporation ("GRANTOR"), and BT COMMERCIAL CORPORATION, as
agent for and representative of (in such capacity herein called "SECURED
PARTY") the financial institutions ("LENDERS") party to the Credit Agreement
(as hereinafter defined).
PRELIMINARY STATEMENTS
A. Secured Party and Lenders have entered into a Credit
Agreement dated as of November 12, 1997 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Grantor pursuant to
which Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Grantor.
B. Grantor owns and uses in its business, and will in
the future adopt and so use, various intangible assets, including trademarks,
service marks, designs, logos, indicia, tradenames, corporate names, company
names, business names, fictitious business names, trade styles and/or other
source and/or business identifiers and applications pertaining thereto
(collectively, the "TRADEMARKS").
C. Secured Party desires Grantor to assign and grant to
it a lien on and security interest in all of Grantor's existing and future
Trademarks, all registrations that have been or may hereafter be issued or
applied for thereon in the United States and any state thereof and in foreign
countries (the "REGISTRATIONS"), all common law and other rights in and to the
Trademarks in the United States and any state thereof and in foreign countries
(the "TRADEMARK RIGHTS"), all goodwill of Grantor's business symbolized by the
Trademarks and associated therewith, including without limitation the documents
and things described in Section 1(b) (the "ASSOCIATED GOODWILL"), and all
proceeds of the Trademarks, the Registrations, the Trademark Rights and the
Associated Goodwill, and Grantor agrees to assign and grant to Secured Party a
secured and protected interest in the Trademarks, the Registrations, the
Trademark Rights, the Associated Goodwill and all the proceeds thereof as
provided herein.
D. Grantor has executed and delivered the Company
Security Agreement dated as of November 12, 1997 (the "COMPANY SECURITY
AGREEMENT") between Grantor and Secured Party for the benefit of Lenders,
pursuant to which Grantor has granted Secured
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Party a security interest in all of its personal property, including, without
limitation, the Collateral, as defined below, which Company Security Agreement
is to be supplemented by this Agreement.
E. Pursuant to the Security Agreement, Grantor has
assigned and granted to Secured Party a lien on and security interest in, among
other assets, all of Grantor's equipment, inventory, accounts and general
intangibles relating to the products and services sold or delivered under or in
connection with the Trademarks such that, upon the occurrence and during the
continuation of an Event of Default, Secured Party would be able to exercise
its remedies consistent with the Security Agreement, this Agreement and
applicable law to foreclose upon Grantor's business and use the Trademarks, the
Registrations and the Trademark Rights in conjunction with the continued
operation of such business, maintaining substantially the same product and
service specifications and quality as maintained by Grantor, and benefit from
the Associated Goodwill.
F. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Grantor shall have
assigned and granted the security interests and undertaken the obligations
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Secured
Party as follows:
SECTION 1. GRANT OF SECURITY INTEREST. Grantor hereby grants
to Secured Party a security interest in, all of Grantor's right, title and
interest in and to the following, in each case whether now or hereafter
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the "COLLATERAL"):
(a) each of the Trademarks and rights and interests in
Trademarks that are presently, or in the future may be, owned, held (whether
pursuant to a license or otherwise) or used by Grantor, in whole or in part
(including, without limitation, the Trademarks specifically identified in
Schedule A annexed hereto, as the same may be amended pursuant hereto from time
to time), and including all Trademark Rights with respect thereto and all
federal, state and foreign Registrations therefor heretofore or hereafter
granted or applied for, the right (but not the obligation) to register claims
under any state or federal trademark law or regulation or any trademark law or
regulation of any foreign country and to apply for, renew and extend the
Trademarks, Registrations and Trademark Rights, the right (but not the
obligation) to ▇▇▇ or bring opposition or cancellation proceedings in the name
of Grantor or in the name of Secured Party or otherwise for past, present and
future infringements of the Trademarks, Registrations or Trademark Rights and
all rights (but not obligations) corresponding thereto in the United States and
any foreign country, and the Associated Goodwill; it being understood that the
rights and interests included herein shall include, without limitation, all
rights and interests pursuant to licensing or other contracts in favor of
Grantor pertaining to any Trademarks, Registrations or Trademark Rights
presently or in the
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future owned, held or used by third parties but, in the case of third parties
which are not Affiliates of Grantor, only to the extent permitted by such
licensing or other contracts or otherwise permitted by applicable law and, if
not so permitted under any such contracts and applicable law, only with the
consent of such third parties;
(b) the following documents and things in Grantor's
possession, or subject to Grantor's right to possession, related to (Y) the
production, sale and delivery by Grantor, or by any Affiliate, licensee or
subcontractor of Grantor, of products or services sold or delivered by or under
the authority of Grantor in connection with the Trademarks, Registrations or
Trademark Rights (which products and services shall, for purposes of this
Agreement, be deemed to include, without limitation, products and services sold
or delivered pursuant to merchandising operations utilizing any Trademarks,
Registrations or Trademark Rights); or (Z) any retail or other merchandising
operations conducted under the name of or in connection with the Trademarks,
Registrations or Trademark Rights by Grantor or any Affiliate, licensee or
subcontractor of Grantor:
(i) all lists and ancillary documents that
identify and describe any of Grantor's customers, or those of its
Affiliates, licensees or subcontractors, for products sold and
services delivered under or in connection with the Trademarks or
Trademark Rights, including without limitation any lists and ancillary
documents that contain a customer's name and address, the name and
address of any of its warehouses, branches or other places of
business, the identity of the Person or Persons having the principal
responsibility on a customer's behalf for ordering products or
services of the kind supplied by Grantor, or the credit, payment,
discount, delivery or other sale terms applicable to such customer,
together with information setting forth the total purchases, by brand,
product, service, style, size or other criteria, and the patterns of
such purchases;
(ii) all product and service specification
documents and production and quality control manuals used in the
manufacture or delivery of products and services sold or delivered
under or in connection with the Trademarks or Trademark Rights;
(iii) all documents which reveal the name and
address of any source of supply, and any terms of purchase and
delivery, for any and all materials, components and services used in
the production of products and services sold or delivered under or in
connection with the Trademarks or Trademark Rights; and
(iv) all documents constituting or concerning the
then current or proposed advertising and promotion by Grantor or its
Affiliates, licensees or subcontractors of products and services sold
or delivered under or in connection with the Trademarks or Trademark
Rights including, without limitation, all documents which reveal the
media used or to be used and the cost for all such advertising
conducted within the described period or planned for such products and
services;
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(c) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon;
(d) to the extent not included in the foregoing clauses
(a) - (c), all general intangibles relating to the Collateral; and
(e) all proceeds, products, rents and profits (including
without limitation license royalties and proceeds of infringement suits) of or
from any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "PROCEEDS" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
Notwithstanding the foregoing, Collateral shall exclude any
intellectual property right, contracts and agreements to the extent, and only
to the extent, that such intellectual property right, contract or agreement
contains a provision enforceable at law and in equity that would be breached by
(or would result in the termination of such intellectual property right,
contract, or agreement upon) the grant of the security interest created herein
pursuant to the terms of this Agreement; provided, however, that if and when
any prohibition on the assignment, pledge or grant of a security interest in
such intellectual property right, contract or agreement is removed, the Secured
Party will be deemed to have been granted a security interest in such
intellectual property right, contract or agreement as of the date hereof, and
the Collateral will be deemed to include such intellectual property right,
contract or agreement.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Grantor now or hereafter
existing under or arising out of or in connection with the Credit Agreement and
the other Loan Documents and all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Grantor, would accrue on
such obligations), reimbursement of amounts drawn under Letters of Credit,
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any
portion of such obligations or liabilities that are paid, to the extent all or
any part of such payment is avoided or recovered directly or indirectly from
Secured Party or any Lender as a preference, fraudulent transfer or otherwise
(all such obligations
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and liabilities being the "UNDERLYING DEBT"), and all obligations of every
nature of Grantor now or hereafter existing under this Agreement (all such
obligations of Grantor, together with the Underlying Debt, being the "SECURED
OBLIGATIONS").
SECTION 3. GRANTOR REMAINS LIABLE. Anything contained herein
to the contrary notwithstanding, (a) Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Party of any of its rights hereunder shall not release Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or liability
under any contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Grantor
represents and warrants as follows:
(a) Description of Collateral. A true and complete list
of all Trademarks, Registrations and Trademark Rights owned, held (whether
pursuant to a license or otherwise) or used by Grantor, in whole or in part, as
of the date of this Agreement is set forth in Schedule A annexed hereto. Each
Trademark, Registration or Trademark Right designated on Schedule A annexed
hereto as a Material Trademark Property, and each other Trademark, Registration
or Trademark Right hereafter arising or otherwise owned, held or used by
Grantor that is subsequently so designated, is referred to herein as a
"MATERIAL TRADEMARK PROPERTY".
(b) Validity and Enforceability of Collateral. Each
Material Trademark Property is valid, subsisting and enforceable. As of the
Closing Date, Grantor is not aware of any pending or threatened claim by any
third party that any Material Trademark Property is invalid or unenforceable or
that the use of any Material Trademark Property violates the rights of any
third person or of any basis for any such claim, and there is no such pending
or threatened claim, whether arising prior to or after the Closing Date, that
could reasonably be expected to have a Material Adverse Effect.
(c) Ownership of Collateral. Except for the interests
disclosed in Schedule B annexed hereto and the security interest assigned and
created by this Agreement, Grantor is the sole legal and beneficial owner of
the entire right, title and interest in and to each Material Trademark
Property, free and clear of any Lien other than Permitted Encumbrances and the
interests disclosed in Schedule B annexed hereto and Liens of mechanics,
materialmen, attorneys and other similar liens imposed by law in the ordinary
course of business in connection with the establishment, creation or
application for Registration of any Trademarks, Registrations or Trademark
Rights for sums not yet delinquent or being contested in good faith (such Liens
being referred to herein as "PERMITTED TRADEMARK LIENS"). Except with respect
to Permitted Encumbrances and the
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interests disclosed in Schedule B annexed hereto and such as may have been
filed in favor of Secured Party relating to this Agreement, no effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any filing or recording office, including
the United States Patent and Trademark Office.
(d) Office Locations; Other Names. The chief place of
business, the chief executive office and the office where Grantor keeps its
records regarding the Collateral is, and has been for the four month period
preceding the date hereof, located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇. Grantor has not in the past done, and does not now do, business
under any other name (including any trade-name or fictitious business name).
(e) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body, except for UCC-1 filings, filings with the United
States Patent and Trademark Office or any state trademark office as identified
by Grantor to Secured Party is required for either (i) the assignment and grant
by Grantor of the security interest created hereby, (ii) the execution,
delivery or performance of this Agreement by Grantor, or (iii) the perfection
or exercise by Secured Party of its rights and remedies hereunder (except as
may have been taken by or at the direction of Grantor).
(f) Perfection. This Agreement, together with the filing
of a financing statement describing the Collateral with the Secretary of State
of the State of Texas and the recording of this Agreement with the United
States Patent and Trademark Office, assigns and creates a valid, perfected and,
except for the interests disclosed in Schedule B annexed hereto, first priority
security interest in the Collateral (subject only to Permitted Trademark
Liens), securing the payment of the Secured Obligations, and all filings and
other actions necessary or desirable to perfect and protect such security
interest have been duly made or taken.
(g) Other Information. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of Grantor with
respect to the Collateral is accurate and complete in all respects.
SECTION 5. FURTHER ASSURANCES; NEW TRADEMARKS, REGISTRATIONS
AND TRADEMARK RIGHTS; CERTAIN INSPECTION RIGHTS.
(a) Grantor agrees that from time to time, at the expense
of Grantor, Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest assigned or granted or purported to be assigned or granted hereby or
to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of
the foregoing, Grantor will: (i) at the request of Secured Party, ▇▇▇▇
conspicuously each of its records pertaining to the Collateral with a legend,
in form and substance satisfactory to Secured Party, indicating that such
Collateral is subject to the security interest granted hereby, (ii) execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as Secured
Party may request, in order to perfect and preserve the security interests
granted or purported to be granted
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hereby, (iii) use commercially reasonable efforts to obtain any necessary
consents of third parties to the assignment and perfection of a security
interest to Secured Party with respect to any Collateral, (iv) at any
reasonable time, upon request by Secured Party, exhibit the Collateral to and
allow inspection of the Collateral by Secured Party, or persons designated by
Secured Party, and (v) at Secured Party's request, appear in and defend any
action or proceeding that may affect Grantor's title to or Secured Party's
security interest in all or any part of the Collateral.
(b) Grantor hereby authorizes Secured Party to file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of Grantor. Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or
of a financing statement signed by Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Grantor hereby authorizes Secured Party to modify
this Agreement without obtaining Grantor's approval of or signature to such
modification by amending Schedule A annexed hereto to include reference to any
right, title or interest in any existing Trademark, Registration or Trademark
Right or any Trademark, Registration or Trademark Right acquired or developed
by Grantor after the execution hereof or to delete any reference to any right,
title or interest in any Trademark, Registration or Trademark Right in which
Grantor no longer has or claims any right, title or interest.
(d) Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
(e) If Grantor shall obtain rights to any new Trademarks,
Registrations or Trademark Rights, the provisions of this Agreement shall
automatically apply thereto. Grantor shall promptly notify Secured Party in
writing of any rights to any new Trademarks or Trademark Rights acquired by
Grantor after the date hereof and of any Registrations issued or applications
for Registration made after the date hereof, which notice shall state whether
such Trademark, Registration or Trademark Right constitutes a Material
Trademark Property. Concurrently with the filing of an application for
Registration for any Trademark, Grantor shall execute, deliver and record in
all places where this Agreement is recorded an appropriate Trademark Security
Agreement, substantially in the form hereof, with appropriate insertions, or an
amendment to this Agreement, in form and substance satisfactory to Secured
Party, pursuant to which Grantor shall assign and grant a security interest to
the extent of its interest in such Registration as provided herein to Secured
Party unless so doing would, in the reasonable judgment of Grantor, after due
inquiry, result in the grant of a Registration in the name of Secured Party, in
which event Grantor shall give written notice to Secured
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Party as soon as reasonably practicable and the filing shall instead be
undertaken as soon as practicable but in no case later than immediately
following the grant of the Registration.
(f) Grantor hereby grants to Secured Party and its
employees, representatives and agents the right to visit Grantor's and any of
its Affiliate's or subcontractor's plants, facilities and other places of
business that are utilized in connection with the manufacture, production,
inspection, storage or sale of products and services sold or delivered under
any of the Trademarks, Registrations or Trademark Rights (or which were so
utilized during the prior six month period), and to inspect the quality control
and all other records relating thereto upon reasonable notice to Grantor and as
often as may be reasonably requested.
SECTION 6. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
(a) not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering the
Collateral;
(b) notify Secured Party of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of
any change in Grantor's chief place of business or chief executive office or
the office where Grantor keeps its records regarding the Collateral;
(d) to the extent required under the Credit Agreement,
pay promptly when due all property and other taxes, assessments and
governmental charges or levies imposed upon, and all claims (including claims
for labor, materials and supplies) against, the Collateral, except to the
extent the validity thereof is being contested in good faith; provided that
Grantor shall in any event pay such taxes, assessments, charges, levies or
claims not later than five days prior to the date of any proposed sale under
any judgement, writ or warrant of attachment entered or filed against Grantor
or any of the Collateral as a result of the failure to make such payment;
(e) not sell, assign (by operation of law or otherwise)
or otherwise dispose of any of the Collateral except as permitted by the Credit
Agreement;
(f) except for the interests disclosed in Schedule B
annexed hereto, Permitted Trademark Liens, Permitted Encumbrances and the
security interest assigned and created by this Agreement, not create or suffer
to exist any Lien upon or with respect to any of the Collateral to secure the
indebtedness or other obligations of any Person;
(g) diligently keep reasonable records respecting the
Collateral and at all times keep at least one complete set of its records
concerning substantially all of the
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Trademarks, Registrations and Trademark Rights at its chief executive office or
principal place of business;
(h) not permit the inclusion in any contract to which it
becomes a party of any provision that could or might in any way conflict with
this Agreement or impair or prevent the assignment and creation of a security
interest in Grantor's rights and interests in any property included within the
definitions of any Trademarks, Registrations, Trademark Rights and Associated
Goodwill;
(i) take all reasonable steps necessary to protect the
secrecy of all trade secrets relating to the products and services sold or
delivered under or in connection with the Trademarks and Trademark Rights,
including without limitation entering into confidentiality agreements with
employees and labeling and restricting access to secret information and
documents;
(j) use proper statutory notice in connection with its
use of each Material Trademark Property to the extent reasonably necessary for
the protection of such Material Trademark Property;
(k) use consistent standards of high quality (which may
be consistent with Grantor's past practices) in the manufacture, sale and
delivery of products and services sold or delivered under or in connection with
the Trademarks, Registrations and Trademark Rights, including, to the extent
applicable, in the operation and maintenance of its merchandising operations;
and
(l) upon any officer of Grantor obtaining knowledge
thereof, promptly notify Secured Party in writing of any event that may
materially and adversely affect the value of the Collateral or any portion
thereof, the ability of Grantor or Secured Party to dispose of the Collateral
or any portion thereof, or the rights and remedies of Secured Party in relation
thereto, including without limitation the levy of any legal process against the
Collateral or any portion thereof.
SECTION 7. AMOUNTS PAYABLE IN RESPECT OF THE COLLATERAL.
Except as otherwise provided in this Section 7, Grantor shall continue to
collect, at its own expense, all amounts due or to become due to Grantor in
respect of the Collateral or any portion thereof. In connection with such
collections, Grantor may take (and, at Secured Party's direction, shall take)
such action as Grantor or Secured Party may deem necessary or advisable to
enforce collection of such amounts; provided, however, that Secured Party shall
have the right at any time, upon the occurrence and during the continuation of
an Event of Default or a Potential Event of Default and upon written notice to
Grantor of its intention to do so, to notify the obligors with respect to any
such amounts of the existence of the security interest assigned and created
hereby, and to direct such obligors to make payment of all such amounts
directly to Secured Party, and, upon such notification and at the expense of
Grantor, to enforce collection of any such amounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as Grantor might have done.
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After receipt by Grantor of the notice from Secured Party referred to in the
proviso to the preceding sentence, (i) all amounts and proceeds (including
checks and other instruments) received by Grantor in respect of amounts due to
Grantor in respect of the Collateral or any portion thereof shall be received
in trust for the benefit of Secured Party hereunder, shall be segregated from
other funds of Grantor and shall be forthwith paid over or delivered to Secured
Party in the same form as so received (with any necessary endorsement) to be
held as cash Collateral and applied as provided by Section 14, and (ii) Grantor
shall not adjust, settle or compromise the amount or payment of any such amount
or release wholly or partly any obligor with respect thereto or allow any
credit or discount thereon.
SECTION 8. TRADEMARK APPLICATIONS AND LITIGATION.
(a) Grantor shall have the duty diligently, through
counsel reasonably acceptable to Secured Party, to prosecute any trademark
application relating to any Material Trademark Property that is pending as of
the date of this Agreement, to make federal application on any existing or
future registerable but unregistered Material Trademark Property (whenever it
is commercially reasonable in the reasonable judgment of Grantor to do so), and
to file and prosecute opposition and cancellation proceedings, renew
Registrations and do any and all acts which are necessary or desirable to
preserve and maintain all rights in all Material Trademark Properties. Any
expenses incurred in connection therewith shall be borne solely by Grantor.
Grantor shall not abandon any Material Trademark Property.
(b) Except as provided in Section 8(d), Grantor shall
have the right to commence and prosecute in its own name, as real party in
interest, for its own benefit and at its own expense, such suits, proceedings
or other actions for infringement, unfair competition, dilution or other damage
as are in its reasonable business judgment necessary to protect the Collateral.
Secured Party shall provide, at Grantor's expense, all reasonable and necessary
cooperation in connection with any such suit, proceeding or action including,
without limitation, joining as a necessary party.
(c) Grantor shall promptly, following its becoming aware
thereof, notify Secured Party of the institution of, or of any adverse
determination in, any proceeding (whether in the United States Patent and
Trademark Office or any federal, state, local or foreign court) described in
Section 8(a) or 8(b) or regarding Grantor's claim of ownership in or right to
use any of the Trademarks, Registrations or Trademark Rights, its right to
register the same, or its right to keep and maintain such Registration.
Grantor shall provide to Secured Party any information with respect thereto
requested by Secured Party.
(d) Anything contained herein to the contrary
notwithstanding, upon the occurrence and during the continuation of an Event of
Default, Secured Party shall have the right (but not the obligation) to bring
suit, in the name of Grantor, Secured Party or otherwise, to enforce any
Trademark, Registration, Trademark Right, Associated Goodwill and any license
thereunder, in which event Grantor shall, at the request of Secured Party, do
any and all lawful acts and execute any and all documents required by Secured
Party in aid of such enforcement and Grantor shall promptly, upon demand,
reimburse and indemnify
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Secured Party as provided in Section 15 in connection with the exercise of its
rights under this Section 8. To the extent that Secured Party shall elect not
to bring suit to enforce any Trademark, Registration, Trademark Right,
Associated Goodwill or any license thereunder as provided in this Section 8(d),
Grantor agrees to use all reasonable measures, whether by action, suit,
proceeding or otherwise, to prevent the infringement of any of the Trademarks,
Registrations, Trademark Rights or Associated Goodwill by others and for that
purpose agrees to diligently maintain any action, suit or proceeding against
any Person so infringing necessary to prevent such infringement.
SECTION 9. NON-DISTURBANCE AGREEMENTS, ETC. If and to the
extent that Grantor is permitted to license the Collateral, Secured Party shall
enter into a non-disturbance agreement or other similar arrangement, at
Grantor's request and expense, with Grantor and any licensee of any Collateral
permitted hereunder in form and substance satisfactory to Secured Party
pursuant to which (a) Secured Party shall agree not to disturb or interfere
with such licensee's rights under its license agreement with Grantor so long as
such licensee is not in default thereunder and (b) such licensee shall
acknowledge and agree that the Collateral licensed to it is subject to the
security interest assigned and created in favor of Secured Party and the other
terms of this Agreement.
SECTION 10. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Grantor hereby irrevocably appoints Secured Party as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of
this Agreement, including without limitation:
(a) to endorse Grantor's name on all applications,
documents, papers and instruments necessary for Secured Party in the use or
maintenance of the Collateral;
(b) during the continuation of any Event of Default to
ask for, demand, collect, ▇▇▇ for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;
(d) during the continuance of any Event of Default to
file any claims or take any action or institute any proceedings that Secured
Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Secured Party with respect to
any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon
or threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in
its sole discretion, any such payments made by Secured
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Party to become obligations of Grantor to Secured Party, due and payable
immediately without demand; and
(f) upon the occurrence and during the continuation of an
Event of Default, (i) to execute and deliver any of the assignments or
documents requested by Secured Party pursuant to Section 13(b), (ii) to grant
or issue an exclusive or non-exclusive license to the Collateral or any portion
thereof to any Person, and (iii) otherwise generally to sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though Secured Party were the absolute owner thereof
for all purposes, and to do, at Secured Party's option and Grantor's expense,
at any time or from time to time, all acts and things that Secured Party deems
necessary to protect, preserve or realize upon the Collateral and Secured
Party's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
SECTION 11. SECURED PARTY MAY PERFORM. If Grantor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Grantor under Section 15.
SECTION 12. STANDARD OF CARE. The powers conferred on
Secured Party hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the exercise of reasonable care in the custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Secured Party shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property.
SECTION 13. REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "CODE") (whether or not the Code applies to the affected
Collateral), and also may (i) require Grantor to, and Grantor hereby agrees
that it will at its expense and upon request of Secured Party forthwith,
assemble all or part of the Collateral as directed by Secured Party and make it
available to Secured Party at a place to be designated by Secured Party that is
reasonably convenient to both parties, (ii) enter onto the property where any
Collateral is located and take possession thereof with or without judicial
process, (iii) prior to the disposition of the Collateral, store the Collateral
or otherwise prepare the Collateral for disposition in any manner to the extent
Secured Party deems appropriate, (iv) take possession of Grantor's premises or
place custodians in exclusive control thereof, remain on such premises and use
the same for the purpose of taking any
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actions described in the preceding clause (iii) and collecting any Secured
Obligation, (v) exercise any and all rights and remedies of Grantor under or in
connection with the contracts related to the Collateral or otherwise in respect
of the Collateral, including without limitation any and all rights of Grantor
to demand or otherwise require payment of any amount under, or performance of
any provision of, such contracts, and (vi) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of Secured Party's offices or elsewhere, for cash, on
credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as Secured Party may deem commercially
reasonable. Secured Party or any Lender may be the purchaser of any or all of
the Collateral at any such sale and Secured Party, as agent for and
representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Grantor, and Grantor hereby waives (to the extent permitted by applicable law)
all rights of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to 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. Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
Secured Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
Grantor hereby waives any claims against Secured Party arising by reason of the
fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale, even if Secured Party accepts the first offer received and does not offer
such Collateral to more than one offeree. If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantor shall be liable for the deficiency and the fees of any
attorneys employed by Secured Party to collect such deficiency.
(b) Upon written demand from Secured Party, Grantor shall
execute and deliver to Secured Party an assignment or assignments of the
Trademarks, Registrations, Trademark Rights and the Associated Goodwill and
such other documents as are requested by Secured Party. Grantor agrees that
such an assignment and/or recording shall be applied to reduce the Secured
Obligations outstanding only to the extent that Secured Party (or any Lender)
receives cash proceeds in respect of the sale of, or other realization upon,
the Collateral.
(c) Within five Business Days after written notice from
Secured Party, Grantor shall make available to Secured Party, to the extent
within Grantor's power and authority, such personnel in Grantor's employ on the
date of such Event of Default as
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Secured Party may reasonably designate, by name, title or job responsibility,
to permit Grantor to continue, directly or indirectly, to produce, advertise
and sell the products and services sold or delivered by Grantor under or in
connection with the Trademarks, Registrations and Trademark Rights, such
persons to be available to perform their prior functions on Secured Party's
behalf and to be compensated by Secured Party at Grantor's expense on a per
diem, pro-rata basis consistent with the salary and benefit structure
applicable to each as of the date of such Event of Default.
SECTION 14. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of Secured Party, be held by
Secured Party as Collateral for, and/or then, or at any other time thereafter,
applied in full or in part by Secured Party against, the Secured Obligations in
the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in
connection therewith, and all amounts for which Secured Party is
entitled to indemnification hereunder and all advances made by Secured
Party hereunder for the account of Grantor, and to the payment of all
costs and expenses paid or incurred by Secured Party in connection
with the exercise of any right or remedy hereunder, all in accordance
with Section 15;
SECOND: To the payment of all other Secured Obligations in
such order as Secured Party shall elect; and
THIRD: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 15. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Secured Party and each
Lender from and against any and all claims, losses and liabilities in any way
relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
from Secured Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the
amount of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any
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of the rights of Secured Party hereunder, or (iv) the failure by Grantor to
perform or observe any of the provisions hereof.
SECTION 16. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall assign and create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Grantor, its successors and assigns, and (c) inure,
together with the rights and remedies of Secured Party hereunder, to the
benefit of Secured Party and its permitted successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), but subject to the
provisions of subsection 10.1 of the Credit Agreement, any Lender may assign or
otherwise transfer any Loans held by it to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to Lenders herein or otherwise. Upon the payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest assigned and granted hereby shall terminate and all rights to the
Collateral shall revert to Grantor. Upon any such termination Secured Party
will, at Grantor's expense, execute and deliver to Grantor such documents as
Grantor shall reasonably request to evidence such termination.
SECTION 17. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders. Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
notice of resignation as Secured Party under this Agreement; removal of Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute
removal as Secured Party under this Agreement; and appointment of a successor
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
appointment of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Agent under subsection 9.5 of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such
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retiring or removed Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Agent's
resignation or removal hereunder as Secured Party, the provisions of this
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was Secured Party hereunder.
SECTION 18. AMENDMENTS; ETC. Subject to Section 5(c), no
amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by Grantor therefrom, shall in any
event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any such amendment or modification, by Grantor. Any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given.
SECTION 19. NOTICES. Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage
prepaid and properly addressed. For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on the signature
pages hereof or, as to either party, such other address as shall be designated
by such party in a written notice delivered to the other party hereto.
SECTION 20. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 21. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 22. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 23. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
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OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement,
terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of
New York are used herein as therein defined.
SECTION 24. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, GRANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO GRANTOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 19;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE
IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER GRANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT SECURED PARTY RETAINS THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION 24
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
SECTION 25. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
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TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.
Grantor and Secured Party each acknowledge that this waiver is a material
inducement for Grantor and Secured Party to enter into a business relationship,
that Grantor and Secured Party have already relied on this waiver in entering
into this Agreement and that each will continue to rely on this waiver in their
related future dealings. Grantor and Secured Party further warrant and
represent that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 25 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 26. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
FWT, INC.
By:
-----------------------------------
Title:
Notice Address:
FWT, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
BT COMMERCIAL CORPORATION
By:
-----------------------------------
Title:
Notice Address: BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop #4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Bhartai Baliga
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SCHEDULE A
TO
COMPANY TRADEMARK COLLATERAL SECURITY AGREEMENT
UNITED STATES
REGISTERED TRADEMARK REGISTRATION REGISTRATION
OWNER DESCRIPTION NUMBER DATE
---------- ------------- ------------ ------------
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274
SCHEDULE B
TO
COMPANY TRADEMARK COLLATERAL SECURITY AGREEMENT
B-1
275
EXHIBIT XX
[FORM OF COMPANY PATENT SECURITY AGREEMENT]
COMPANY PATENT COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
This COMPANY PATENT COLLATERAL ASSIGNMENT AND SECURITY
AGREEMENT (this "AGREEMENT") is dated as of November 12, 1997 and entered into
by and between FWT, INC., a Texas corporation ("ASSIGNOR"), and BT COMMERCIAL
CORPORATION, as agent for and representative of (in such capacity herein called
"ASSIGNEE") the financial institutions ("LENDERS") party to the Credit
Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Assignee and Lenders have entered into a Credit
Agreement dated as of November 12, 1997 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Assignor, pursuant to
which Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Assignor.
B. Assignor has and may in the future have rights, title
and interests in and to various Patents and other related Collateral (as such
terms are hereinafter defined).
C. Assignor is willing to grant to Assignee (i) a
security interest in all such Collateral for the purpose of securing the
complete and timely satisfaction of all of the Secured Obligations (as
hereinafter defined) and (ii) effective upon the occurrence and during the
continuation of an Event of Default, an assignment of Assignor's entire right,
title and interest in and to all such Collateral.
D. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Assignor shall have
granted the security interests and made the conditional assignment and
undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Assignor hereby agrees with Assignee
as follows:
SECTION 1. GRANT OF SECURITY. Assignor hereby grants to
Assignee a security interest in all of Assignor's right, title and interest in
and to the following, in
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each case whether now or hereafter existing or in which Assignor now has or
hereafter acquires an interest and wherever the same may be located (the
"COLLATERAL"):
(a) all patents and patent applications and rights and
interests in patents and patent applications under any domestic law that are
presently, or in the future may be, owned by Assignor and all patents and
patent applications and rights and interests in patents and patent applications
under any domestic law that are presently, or in the future may be, held or
used by Assignor in whole or in part (including, without limitation, the
patents and patent applications listed in Schedule A annexed hereto, as the
same may be amended pursuant hereto from time to time), all rights (but not
obligations) corresponding thereto (including without limitation the right (but
not the obligation) to ▇▇▇ for past, present and future infringements in the
name of Assignor or in the name of Assignee or Lenders), and all re-issues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof (all of the foregoing being collectively referred to as the "PATENTS");
it being understood that the rights and interest assigned hereby shall include,
without limitation, all rights and interests pursuant to licensing or other
contracts in favor of Assignor pertaining to patent applications and patents
presently or in the future owned or used by third parties but, in the case of
third parties which are not Affiliates of Assignor, only to the extent
permitted by such licensing or other contracts and, if not so permitted, only
with the consent of such third parties;
(b) All general intangibles relating to the Patents;
(c) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon; and
(d) all proceeds, products, rents and profits (including
without limitation license royalties and proceeds of infringement suits) of or
from any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Assignee is the loss
payee thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing Collateral.
For purposes of this Agreement, the term "PROCEEDS" includes whatever is
receivable or received when Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary or
involuntary.
Notwithstanding the foregoing, Collateral shall exclude any
intellectual property right, contracts and agreements to the extent, and only
to the extent, that such intellectual property right, contract or agreement
contains a provision enforceable at law and in equity that would be breached by
(or would result in the termination of such intellectual property contract or
agreement upon) the grant of the security interest created herein pursuant to
the terms of this Agreement; provided, however, that if and when any
prohibition on the assignment, pledge or grant of a security interest in such
intellectual property right, contract or agreement is removed, the Secured
Party will be deemed to
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have been granted a security interest in such intellectual property right,
contract or agreement as of the date hereof, and the Collateral will be deemed
to include such intellectual property right, contract or agreement.
SECTION 2. CONDITIONAL ASSIGNMENT. In addition to, and not
by way of limitation of, the granting of a security interest in the Collateral
pursuant to Section 1, Assignor hereby, effective only upon the occurrence and
during the continuance of an Event of Default and upon written notice from
Assignee and subject to the terms of this Agreement, grants, sells, conveys,
transfers, assigns and sets over to Assignee, for its benefit and the ratable
benefit of Lenders, all of Assignor's right, title and interest in and to the
Collateral, including without limitation Assignor's right, title and interest
in and to the Patents identified in Schedule A annexed hereto.
SECTION 3. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a), of
all obligations and liabilities of every nature of Assignor now or hereafter
existing under or arising out of or in connection with the Credit Agreement and
the other Loan Documents and all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Assignor, would accrue on
such obligations), reimbursement of amounts drawn under Letters of Credit,
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any
portion of such obligations or liabilities that are paid, to the extent all or
any part of such payment is avoided or recovered directly or indirectly from
Assignee or any Lender as a preference, fraudulent transfer or otherwise (all
such obligations and liabilities being the "UNDERLYING DEBT"), and all
obligations of every nature of Assignor now or hereafter existing under this
Agreement (all such obligations of Assignor, together with the Underlying Debt,
being the "SECURED OBLIGATIONS").
SECTION 4. ASSIGNOR REMAINS LIABLE. Anything contained
herein to the contrary notwithstanding, (a) Assignor shall remain liable under
any contracts and agreements included in the Collateral, to the extent set
forth therein, to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by
Assignee of any of its rights hereunder shall not release Assignor from any of
its duties or obligations under the contracts and agreements included in the
Collateral, and (c) Assignee shall not have any obligation or liability under
any contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Assignee be obligated to perform any of the obligations or
duties of Assignor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
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SECTION 5. REPRESENTATIONS AND WARRANTIES. Assignor
represents and warrants as follows:
(a) Description of Collateral. A true and complete list
of all Patents owned, held (whether pursuant to a license or otherwise) or used
by Assignor, in whole or in part, as of the date of this Agreement is set forth
in Schedule A annexed hereto.
(b) Validity and Enforceability of Collateral. Each of
the Patents that is material to Assignor's business is valid, subsisting and
enforceable and Assignor is not aware of any pending or, to Assignor's
knowledge, threatened claim by any third party that any such material Patent is
invalid or unenforceable or that the use of any such material Patents violates
the rights of any third person or of any basis for any such claim.
(c) Ownership of Collateral. Except for any interests
disclosed in Schedule B annexed hereto, if any, Permitted Encumbrances and the
security interest and conditional assignment created by this Agreement,
Assignor owns the Collateral free and clear of any Lien. Except with respect
to any interests disclosed in Schedule B annexed hereto and such as may have
been filed in favor of Assignee relating to this Agreement, (i) no effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any filing or recording office and (ii) no
effective filing covering all or any part of the Collateral is on file in the
United States Patent and Trademark Office.
SECTION 6. NEW PATENTS AND PATENT APPLICATIONS.
(a) Assignor hereby authorizes Assignee to modify this
Agreement without obtaining Assignor's approval of or signature to such
modification by amending Schedule A annexed hereto to include reference to any
right, title or interest in any existing Patent or any Patent acquired or
developed by Assignor after the execution hereof or to delete any reference to
any right, title or interest in any Patent in which Assignor no longer has or
claims any right, title or interest.
(b) If Assignor shall hereafter obtain rights to any
patentable inventions, or become entitled to the benefit of any patent
application or patent or any reissue, division, continuation, renewal,
extension, or continuation-in-part of any Patent or any improvement on any
Patent, the provisions of this Agreement shall automatically apply thereto.
Assignor shall promptly notify Assignee in writing of any Patents acquired by
Assignor after the date hereof. Concurrently with the filing of an application
for any Patent, Assignor shall execute, deliver and record in all places where
this Agreement is recorded an appropriate Patent Collateral Assignment and
Security Agreement, substantially in the form hereof, with appropriate
insertions, or an amendment to this Agreement, in form and substance
satisfactory to Assignee, pursuant to which Assignor shall grant a security
interest and conditional assignment to the extent of its interest in such
Patent as provided herein to Assignee unless so doing would, in the reasonable
judgment of Assignor, after due inquiry, result in the grant of a patent in the
name of
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Assignee, in which event Assignor shall give written notice to Assignee as soon
as reasonably practicable and the filing shall instead be undertaken as soon as
practicable but in no case later than immediately following the grant of the
Patent.
SECTION 7. CERTAIN COVENANTS OF ASSIGNOR. Assignor shall:
(a) diligently keep reasonable records respecting the
Collateral and at all times keep at least one complete set of its records
concerning substantially all of the Patents at its chief executive office or
principal place of business;
(b) use commercially reasonable efforts not to permit the
inclusion in any contract to which it becomes a party after the date hereof of
any provision that could or might in any way impair or prevent the creation of
a security interest in, or the assignment of, Assignor's rights and interests
in any property included within the definition of any Patents acquired under
such contracts;
(c) take all steps reasonably necessary to protect the
secrecy of all trade secrets relating to the products and services sold or
delivered under or in connection with the Patents, including without limitation
entering into confidentiality agreements with employees and labeling and
restricting access to secret information and documents;
(d) use proper statutory notice in connection with its
use of each of the Patents; and
(e) use consistent standards of high quality (which may
be consistent with Assignor's past practices) in the manufacture, sale and
delivery of products and services sold or delivered under or in connection with
the Patents, including, to the extent applicable, in the operation and
maintenance of its retail stores and other merchandising operations.
SECTION 8. CERTAIN INSPECTION RIGHTS. Assignor hereby grants
to Assignee and its employees, representatives and agents the right to visit,
during Assignor's normal business hours, Assignor's plants, facilities and
other places of business that are utilized in connection with the manufacture,
production, inspection, storage or sale of products and services sold or
delivered under any of the Patents (or which were so utilized during the prior
six month period), and to inspect the quality control and all other records
relating thereto upon reasonable notice to Assignor and as often as may be
reasonably requested (but in no event more than two (2) times in any calendar
year), provided, however, that Assignee shall have the right to an unlimited
number of visits during an Event of Default.
SECTION 9. AMOUNTS PAYABLE IN RESPECT OF THE COLLATERAL.
Except as otherwise provided in this Section 9, Assignor shall continue to
collect, at its own expense, all amounts due or to become due to Assignor in
respect of the Collateral or any portion thereof. In connection with such
collections, Assignor may take (and, at
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Assignee's direction, shall take) such action as Assignor or Assignee may deem
necessary or advisable to enforce collection of such amounts; provided,
however, that Assignee shall have the right at any time, upon the occurrence
and during the continuation of an Event of Default and upon written notice to
Assignor of its intention to do so, to notify the obligors with respect to any
such amounts of the existence of the security interest created, and the
conditional assignment effected hereby, and to direct such obligors to make
payment of all such amounts directly to Assignee, and, upon such notification
and at the expense of Assignor, to enforce collection of any such amounts and
to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as Assignor might have done. After receipt by
Assignor of the notice from Assignee referred to in the proviso to the
preceding sentence, (i) all amounts and proceeds (including checks and other
instruments) received by Assignor in respect of amounts due to Assignor in
respect of the Collateral or any portion thereof shall be received in trust for
the benefit of Assignee hereunder, shall be segregated from other funds of
Assignor and shall be forthwith paid over or delivered to Assignee in the same
form as so received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 17, and (ii) Assignor shall not
adjust, settle or compromise the amount or payment of any such amount or
release wholly or partly any obligor with respect thereto or allow any credit
or discount thereon.
SECTION 10. PATENT APPLICATIONS AND LITIGATION.
(a) Assignor shall have the duty diligently (subject to
Assignor's reasonable business judgment), through counsel reasonably acceptable
to Assignee, to prosecute any patent application relating to any of the Patents
specifically identified in Schedule A annexed hereto that is pending as of the
date of this Agreement, to make application on any existing or future
unpatented but patentable invention that is material to Assignor, and to do any
and all acts which are necessary or desirable to preserve and maintain all
rights in all Patents. Any expenses incurred in connection therewith shall be
borne solely by Assignor. Subject to the foregoing and Assignor's reasonable
judgment, Assignor shall not abandon any right to file a patent application or
any pending patent application or any Patent without the prior written consent
of Assignee.
(b) Except as provided in Section 10(d) and notwithstanding
Section 2, Assignor shall have the right to commence and prosecute in its own
name, as real party in interest, for its own benefit and at its own expense,
such suits, proceedings or other actions for infringement, unfair competition,
or other damage or reexamination or reissue proceedings as are in its
reasonable business judgment necessary to protect the Collateral. Assignee
shall provide, at Assignor's expense, all reasonable and necessary cooperation
in connection with any such suit, proceeding or action including, without
limitation, joining as a necessary party.
(c) Assignor shall promptly, following its becoming aware
thereof, notify Assignee of the institution of, or of any adverse determination
in, any proceeding (whether in the United States Patent and Trademark Office or
any federal, state, local or
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foreign court) described in Section 10(a) or 10(b) or regarding Assignor's
interests in any material Collateral. Assignor shall provide to Assignee any
information with respect thereto reasonably requested by Assignee.
(d) Anything contained herein to the contrary
notwithstanding, upon the occurrence and during the continuation of an Event of
Default, Assignee shall have the right (but not the obligation) to bring suit,
in the name of Assignor, Assignee or otherwise, to enforce any Patent and any
license thereunder, in which event Assignor shall, at the request of Assignee,
do any and all lawful acts and execute any and all documents required by
Assignee in aid of such enforcement and Assignor shall promptly, upon demand,
reimburse and indemnify Assignee as provided in Section 18 in connection with
the exercise of its rights under this Section 10. To the extent that Assignee
elects not to bring suit to enforce any Patent or any license thereunder as
provided in this Section 10(d), Assignor agrees to use all reasonable measures,
whether by action, suit, proceeding or otherwise, to prevent the infringement
of any of the Patents by others and for that purpose agrees to diligently
maintain any action, suit or proceeding against any Person so infringing
necessary to prevent such infringement.
SECTION 11. NON-DISTURBANCE AGREEMENTS, ETC. If and to the
extent that Assignor is permitted to license the Collateral, Assignee shall
enter into a non-disturbance agreement or other similar arrangement, at
Assignor's request and expense, with Assignor and any licensee of any
Collateral permitted hereunder in form and substance satisfactory to Assignee
pursuant to which (a) Assignee shall agree not to disturb or interfere with
such licensee's rights under its license agreement with Assignor so long as
such licensee is not in default thereunder and (b) such licensee shall
acknowledge and agree that the Collateral licensed to it is subject to the
security interest and conditional assignment created in favor of Assignee and
the other terms of this Agreement.
SECTION 12. REASSIGNMENT OF COLLATERAL. If (a) an Event of
Default shall have occurred and, by reason of cure, waiver, modification,
amendment or otherwise, no longer be continuing, (b) no other Event of Default
shall have occurred and be continuing, (c) an assignment to Assignee of any
rights, title and interests in and to the Collateral shall have been previously
made and shall have become absolute and effective pursuant to Section 2,
Section 13(f) or Section 16(b), and (d) the Secured Obligations shall not have
become immediately due and payable, upon the written request of Assignor and
the written consent of Assignee; then Assignee shall promptly execute and
deliver to Assignor such assignments as may be necessary to reassign to
Assignor any such rights, title and interests as may have been assigned to
Assignee as aforesaid, subject to any disposition thereof that may have been
made by Assignee pursuant hereto; provided that, after giving effect to such
reassignment, Assignee's security interest and conditional assignment granted
pursuant to Section 1 and Section 2, as well as all other rights and remedies
of Assignee granted hereunder, shall continue to be in full force and effect;
and provided, further that the rights, title and interests so reassigned shall
be free and clear of
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all Liens other than Liens (if any) encumbering such rights, title and interest
at the time of their assignment to Assignee and Permitted Encumbrances.
SECTION 13. ASSIGNEE APPOINTED ATTORNEY-IN-FACT. Assignor
hereby irrevocably appoints Assignee as Assignor's attorney-in-fact, with full
authority in the place and stead of Assignor and in the name of Assignor,
Assignee or otherwise, from time to time in Assignee's discretion to take any
action and to execute any instrument that Assignee may deem necessary or
advisable, consistent with the terms of this Agreement, to accomplish the
purposes of this Agreement, including without limitation:
(a) to endorse Assignor's name on all applications,
documents, papers and instruments necessary for Assignee in the use or
maintenance of the Collateral;
(b) during the continuance of an Event of Default, to ask
for, demand, collect, ▇▇▇ for, recover, compound, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;
(d) during the continuance of an Event of Default, to
file any claims or take any action or institute any proceedings that Assignee
may deem necessary or desirable for the collection of any of the Collateral or
otherwise to enforce the rights of Assignee with respect to any of the
Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon
or threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Assignee in its
sole discretion, any such payments made by Assignee to become obligations of
Assignor to Assignee, due and payable immediately without demand; and
(f) upon the occurrence and during the continuation of an
Event of Default, (i) to execute and deliver any of the assignments or
documents requested by Assignee pursuant to Section 16(b), (ii) to grant or
issue an exclusive or non-exclusive license to the Collateral or any portion
thereof to any Person, and (iii) otherwise generally to sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though Assignee were the absolute owner thereof for
all purposes, and to do, at Assignee's option and Assignor's expense, at any
time or from time to time, all acts and things that Assignee deems necessary to
protect, preserve or realize upon the Collateral and Assignee's security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as Assignor might do.
SECTION 14. ASSIGNEE MAY PERFORM. If Assignor fails to
perform any agreement contained herein, Assignee may itself perform, or cause
performance of, such
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agreement, and the expenses of Assignee incurred in connection therewith shall
be payable by Assignor under Section 18.
SECTION 15. STANDARD OF CARE. The powers conferred on
Assignee hereunder are solely to protect its interest in the Collateral and
shall not impose any duty upon it to exercise any such powers. Except for the
exercise of reasonable care in the custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, Assignee shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. Assignee shall be deemed to have exercised reasonable care in the
custody and preservation of Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which Assignee accords its own
property.
SECTION 16. REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) Assignee may exercise in respect of the Collateral,
in addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected Collateral), and
also may (i) require Assignor to, and Assignor hereby agrees that it will at
its expense and upon request of Assignee forthwith, assemble all or part of the
Collateral as directed by Assignee and make it available to Assignee at a place
to be designated by Assignee that is reasonably convenient to both parties,
(ii) enter onto the property where any Collateral is located and take
possession thereof with or without judicial process, (iii) prior to the
disposition of the Collateral, store the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Assignee deems
appropriate, (iv) take possession of Assignor's premises or place custodians in
exclusive control thereof, remain on such premises and use the same for the
purpose of taking any actions described in the preceding clause (iii) and
collecting any Secured Obligation, (v) exercise any and all rights and remedies
of Assignor under or in connection with the contracts related to the Collateral
or otherwise in respect of the Collateral, including without limitation any and
all rights of Assignor to demand or otherwise require payment of any amount
under, or performance of any provision of, such contracts, and (vi) without
notice except as specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of Assignee's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times
and at such price or prices and upon such other terms as Assignee may deem
commercially reasonable. Assignee or any Lender may be the purchaser of any or
all of the Collateral at any such sale and Assignee, as agent for and
representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Assignee at such sale. Each
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purchaser at any such sale shall hold the property sold absolutely free from
any claim or right on the part of Assignor, and Assignor hereby waives (to the
extent permitted by applicable law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. Assignor agrees that, to
the extent notice of sale shall be required by law, at least ten days' notice
to Assignor 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.
Assignee shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. Assignee 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. Assignor hereby waives any claims against Assignee
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if Assignee accepts the first offer received
and does not offer such Collateral to more than one offeree. If the proceeds
of any sale or other disposition of the Collateral are insufficient to pay all
the Secured Obligations, Assignor shall be liable for the deficiency and the
fees of any attorneys employed by Assignee to collect such deficiency.
(b) Upon written demand from Assignee, Assignor shall
execute and deliver to Assignee an assignment or assignments of the Patents and
such other documents as are necessary or appropriate to carry out the intent
and purposes of this Agreement; provided that the failure of Assignor to comply
with such demand will not impair or affect the validity of the conditional
assignment effected by Section 2 or its effectiveness upon notice by Assignee
as specified in Section 2. Assignor agrees that such an assignment (including
without limitation the conditional assignment effected by Section 2) and/or
recording shall be applied to reduce the Secured Obligations outstanding only
to the extent that Assignee (or any Lender) receives cash proceeds in respect
of the sale of, or other realization upon, the Collateral.
SECTION 17. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Assignee in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of Assignee, be held by Assignee
as Collateral for, and/or then, or at any other time thereafter, applied in
full or in part by Assignee against, the Secured Obligations in the following
order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Assignee and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Assignee in connection
therewith, and all amounts for which Assignee is entitled to
indemnification hereunder and all advances made by Assignee hereunder
for the account of Assignor, and to the payment of all costs and
expenses paid or incurred by Assignee in connection with the exercise
of any right or remedy hereunder, all in accordance with Section 18;
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SECOND: To the payment of all other Secured Obligations in
such order as Assignee shall elect; and
THIRD: To the payment to or upon the order of Assignor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 18. INDEMNITY AND EXPENSES.
(a) Assignor agrees to indemnify Assignee and each Lender
from and against any and all claims, losses and liabilities in any way relating
to, growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result
solely from Assignee's or such Lender's gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction.
(b) Assignor shall pay to Assignee upon demand the amount
of any and all costs and expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that Assignee 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
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of Assignee hereunder, or (iv) the failure by Assignor to
perform or observe any of the provisions hereof.
SECTION 19. CONTINUING ASSIGNMENT AND SECURITY INTEREST;
TRANSFER OF LOANS. This Agreement shall create a continuing security interest
in, and conditional assignment of, the Collateral and shall (a) remain in full
force and effect until the payment in full of the Secured Obligations, the
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit, (b) be binding upon Assignor,
its permitted successors and assigns, and (c) inure, together with the rights
and remedies of Assignee hereunder, to the benefit of Assignee and its
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), but subject to the provisions of subsection 10.1 of the
Credit Agreement, any Lender may assign or otherwise transfer any Loans held by
it to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to Lenders herein or
otherwise. Upon the payment in full of all Secured Obligations, the
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit, the security interest and
conditional assignment granted hereby shall terminate and all rights to the
Collateral shall revert to Assignor. Upon any such termination Assignee will,
at Assignor's expense, execute and deliver to Assignor such documents as
Assignor shall reasonably request to evidence such termination.
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SECTION 20. ASSIGNEE AS AGENT.
(a) Assignee has been appointed to act as Assignee
hereunder by Lenders. Assignee shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement.
(b) Assignee shall at all times be the same Person that
is Agent under the Credit Agreement. Written notice of resignation by Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute notice
of resignation as Assignee under this Agreement; removal of Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute removal as
Assignee under this Agreement; and appointment of a successor Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute appointment of a
successor Assignee under this Agreement. Upon the acceptance of any
appointment as Agent under subsection 9.5 of the Credit Agreement by a
successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Assignee under this Agreement, and the retiring or removed Assignee
under this Agreement shall promptly (i) transfer to such successor Assignee all
sums, securities and other items of Collateral held hereunder, together with
all records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Assignee under this Agreement, and
(ii) execute and deliver to such successor Assignee such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Assignee of the
security interests created hereunder, whereupon such retiring or removed
Assignee shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed Agent's resignation or removal
hereunder as Assignee, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Assignee hereunder.
SECTION 21. AMENDMENTS; ETC. Subject to Section 6(a), no
amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by Assignor therefrom, shall in any
event be effective unless the same shall be in writing and signed by Assignee
and, in the case of any such amendment or modification, by Assignor. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.
SECTION 22. NOTICES. Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex, or four Business
Days after depositing it in the United States mail with postage prepaid and
properly addressed. For the purposes hereof, the address of each party hereto
shall be as set forth under such party's name on the signature pages
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hereof or, as to either party, such other address as shall be designated by
such party in a written notice delivered to the other party hereto.
SECTION 23. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Assignee in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 24. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 25. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 26. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement,
terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of
New York are used herein as therein defined.
SECTION 27. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ASSIGNOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT ASSIGNOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND
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BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Assignor
hereby agrees that service of all process in any such proceeding in any such
court may be made by registered or certified mail, return receipt requested, to
Assignor at its address provided in Section 22, such service being hereby
acknowledged by Assignor to be sufficient for personal jurisdiction in any
action against Assignor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Assignee to bring proceedings against Assignor in the courts of any other
jurisdiction.
SECTION 28. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
LAW, ASSIGNOR AND ASSIGNEE HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.
Assignor and Assignee each acknowledge that this waiver is a material
inducement for Assignor and Assignee to enter into a business relationship,
that Assignor and Assignee have already relied on this waiver in entering into
this Agreement and that each will continue to rely on this waiver in their
related future dealings. Assignor and Assignee further warrant and represent
that each has reviewed this waiver with its legal counsel, and that each
knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
SECTION 29. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Assignor and Assignee have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
FWT, INC.
By:
-----------------------------------
Title:
Notice Address:
FWT, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
BT COMMERCIAL CORPORATION
Notice Address:
By:
-----------------------------------
Title:
BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop #4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Bhartai Baliga
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SCHEDULE A
TO COMPANY PATENT COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
PATENTS ISSUED
Patent No. Issue Date Invention Inventor
---------- ---------- --------- --------
PATENTS PENDING
Applicant's Date Application
Name Filed No. Invention Inventor
----------- ----- ----------- --------- --------
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291
SCHEDULE B
TO COMPANY PATENT COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
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292
EXHIBIT XXI
[FORM OF SUBSIDIARY GUARANTY]
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY is entered into as of _______________
__, ____ by the undersigned (each a "GUARANTOR" and collectively, "GUARANTORS")
in favor of and for the benefit of BT COMMERCIAL CORPORATION, as agent for and
representative of (in such capacity herein called "AGENT") the financial
institutions ("LENDERS") party to the Credit Agreement (as hereinafter
defined).
RECITALS
A. FWT, Inc., a Texas corporation ("COMPANY" or
"BORROWER"), has entered into that certain Credit Agreement dated as of
November 12, 1997 with Agent and Lenders (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT"; capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined).
B. Guarantors are Subsidiaries of Company, and because a
portion of the proceeds of the Loans may be advanced to Guarantors, the
Guarantied Obligations (as hereinafter defined) are being incurred for and will
inure to the benefit of Guarantors (which benefits are hereby acknowledged).
C. It is a condition precedent to the extensions of
Credit under the Credit Agreement that Borrower's obligations thereunder be
guarantied by Guarantors.
D. Guarantors are willing irrevocably and
unconditionally to guaranty such obligations of Borrower.
NOW, THEREFORE, based upon the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce Lenders and Agent to enter into the Credit
Agreement and to make the Loans thereunder, Guarantors hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used in this Guaranty, the
following terms shall have the following meanings unless the context otherwise
requires:
"GUARANTIED OBLIGATIONS" has the meaning assigned to that term
in subsection 2.1.
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293
"GUARANTY" means this Guaranty dated as of ___________, ____,
as it may be amended, supplemented or otherwise modified from time to
time.
"PAYMENT IN FULL", "PAID IN FULL" or any similar term means
payment in full of the Guarantied Obligations including, without
limitation, all principal, interest, costs, fees and expenses
(including, without limitation, legal fees and expenses) of Lenders
and Agent as required under the Loan Documents.
1.2 INTERPRETATION.
(a) References to "Sections" and "subsections" shall be
to Sections and subsections, respectively, of this Guaranty unless
otherwise specifically provided.
(b) In the event of any conflict or inconsistency between
the terms, conditions and provisions of this Guaranty and the terms,
conditions and provisions of the Credit Agreement, the terms,
conditions and provisions of this Guaranty shall prevail.
SECTION 2. THE GUARANTY
2.1 GUARANTY OF THE GUARANTIED OBLIGATIONS. Subject to the
provisions of subsection 2.2(a), Guarantors jointly and severally hereby
irrevocably and unconditionally guaranty, as primary obligors and not merely as
sureties, the due and punctual payment in full of all Guarantied Obligations
when the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)). The term
"GUARANTIED OBLIGATIONS" means:
(a) any and all Obligations of the Borrower now or
hereafter made, incurred or created, whether absolute or contingent,
liquidated or unliquidated, whether due or not due, and however
arising under or in connection with the Credit Agreement and the other
Loan Documents, including those arising under successive borrowing
transactions under the Credit Agreement which shall either continue
the Obligations of the Borrower or from time to time renew them after
they have been satisfied; and
(b) those expenses set forth in subsection 2.8 hereof.
2.2 LIMITATION ON AMOUNT GUARANTIED; CONTRIBUTION BY GUARANTORS.
(a) Anything contained in this Guaranty to the contrary notwithstanding, if any
Fraudulent Transfer Law (as hereinafter defined) is determined by a court of
competent jurisdiction to be applicable to the obligations of any Guarantor
under this Guaranty, such obligations of such Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that would
not render its obligations hereunder subject to avoidance as a
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fraudulent transfer or conveyance under Section 548 of Title 11 of the United
States Code or any applicable provisions of comparable state law (collectively,
the "FRAUDULENT TRANSFER LAWS"), in each case after giving effect to all other
liabilities of such Guarantor, contingent or otherwise, that are relevant under
the Fraudulent Transfer Laws (specifically excluding, however, any liabilities
of such Guarantor (x) in respect of intercompany indebtedness to the Borrower
or other affiliates of the Borrower to the extent that such indebtedness would
be discharged in an amount equal to the amount paid by such Guarantor hereunder
and (y) under any guaranty of Subordinated Indebtedness which guaranty contains
a limitation as to maximum amount similar to that set forth in this subsection
2.2(a), pursuant to which the liability of such Guarantor hereunder is included
in the liabilities taken into account in determining such maximum amount) and
after giving effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Guarantor pursuant to
applicable law or pursuant to the terms of any agreement (including without
limitation any such right of contribution under subsection 2.2(b) or under a
Related Guaranty (as hereinafter defined) as contemplated by subsection
2.2(b)).
(b) Guarantors under this Guaranty, and each guarantor under other
guaranties relating to the Credit Agreement (the "RELATED GUARANTIES") which
contain a contribution provision similar to that set forth in this subsection
2.2(b), together desire to allocate among themselves (collectively, the
"CONTRIBUTING GUARANTORS"), in a fair and equitable manner, their obligations
arising under this Guaranty and the Related Guaranties. Accordingly, in the
event any payment or distribution is made on any date by any Guarantor under
this Guaranty or a guarantor under a Related Guaranty (a "FUNDING GUARANTOR")
that exceeds its Fair Share (as defined below) as of such date, that Funding
Guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the amount of such other Contributing Guarantor's
Fair Share Shortfall (as defined below) as of such date, with the result that
all such contributions will cause each Contributing Guarantor's Aggregate
Payments (as defined below) to equal its Fair Share as of such date. "FAIR
SHARE" means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Adjusted Maximum
Amount (as defined below) with respect to such Contributing Guarantor to (y)
the aggregate of the Adjusted Maximum Amounts with respect to all Contributing
Guarantors, multiplied by (ii) the aggregate amount paid or distributed on or
before such date by all Funding Guarantors under this Guaranty and the Related
Guaranties in respect of the obligations guarantied. "FAIR SHARE SHORTFALL"
means, with respect to a Contributing Guarantor as of any date of
determination, the excess, if any, of the Fair Share of such Contributing
Guarantor over the Aggregate Payments of such Contributing Guarantor.
"ADJUSTED MAXIMUM AMOUNT" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty and the Related Guaranties,
determined as of such date in accordance with subsection 2.2(a) or, if
applicable, a similar provision contained in a Related Guaranty; provided that,
solely for purposes of calculating the "Adjusted Maximum Amount" with respect
to any Contributing Guarantor for purposes of
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this subsection 2.2(b), any assets or liabilities of such Contributing
Guarantor arising by virtue of any rights to subrogation, reimbursement or
indemnification or any rights to or obligations of contribution hereunder or
under any similar provision contained in a Related Guaranty shall not be
considered as assets or liabilities of such Contributing Guarantor. "AGGREGATE
PAYMENTS" means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (i) the aggregate amount of all payments and
distributions made on or before such date by such Contributing Guarantor in
respect of this Guaranty and the Related Guaranties (including, without
limitation, in respect of this subsection 2.2(b) or any similar provision
contained in a Related Guaranty) minus (ii) the aggregate amount of all
payments received on or before such date by such Contributing Guarantor from
the other Contributing Guarantors as contributions under this subsection 2.2(b)
or any similar provision contained in a Related Guaranty. The amounts payable
as contributions hereunder and under similar provisions in the Related
Guaranties shall be determined as of the date on which the related payment or
distribution is made by the applicable Funding Guarantor. The allocation among
Contributing Guarantors of their obligations as set forth in this subsection
2.2(b) or any similar provision contained in a Related Guaranty shall not be
construed in any way to limit the liability of any Contributing Guarantor
hereunder or under a Related Guaranty. Each Contributing Guarantor under a
Related Guaranty is a third party beneficiary to the contribution agreement set
forth in this subsection 2.2(b).
2.3 PAYMENT BY GUARANTORS; APPLICATION OF PAYMENTS. Subject to
the provisions of subsection 2.2(a), Guarantors hereby jointly and severally
agree, in furtherance of the foregoing and not in limitation of any other right
which Agent or any other Person may have at law or in equity against any
Guarantor by virtue hereof, that upon the failure of the Borrower to pay any of
the Guarantied Obligations when and as the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section
362(a)), Guarantors will upon demand by Requisite Lenders or Agent (acting on
behalf of Requisite Lenders) pay, or cause to be paid, in cash, to Agent for
the ratable benefit of Lenders, an amount equal to the sum of the unpaid
principal amount of all Guarantied Obligations then due as aforesaid, accrued
and unpaid interest on such Guarantied Obligations (including, without
limitation, interest which, but for the filing of a petition in bankruptcy with
respect to the Borrower, would have accrued on such Guarantied Obligations,
whether or not a claim is allowed against the Borrower for such interest in any
such bankruptcy proceeding) and all other Guarantied Obligations then owed to
Agent and/or Lenders as aforesaid. All such payments shall be applied promptly
from time to time by Agent:
First, to the payment of the costs and expenses of any
collection or other realization under this Guaranty, including
reasonable compensation to Agent and its agents and counsel, and all
expenses, liabilities and advances made or incurred by Agent in
connection therewith;
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Second, to the payment of all other Guarantied Obligations in
such order as Agent shall elect; and
Third, after payment in full of all Guarantied Obligations, to
the payment to Guarantors, or their respective successors or assigns,
or to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct, of any surplus then
remaining from such payments.
2.4 LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that
its obligations hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than payment in
full of the Guarantied Obligations. In furtherance of the foregoing and
without limiting the generality thereof, each Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and
not of collectibility.
(b) Agent may enforce this Guaranty upon the occurrence
and during the continuation of an Event of Default under the Credit
Agreement notwithstanding the existence of any dispute between Lenders
and the Borrower with respect to the existence of such Event of
Default.
(c) The obligations of each Guarantor hereunder are
independent of the obligations of the Borrower under the Loan
Documents and the obligations of any other guarantor (including any
other Guarantor) of the obligations of the Borrower under the Loan
Documents, and a separate action or actions may be brought and
prosecuted against such Guarantor whether or not any action is brought
against the Borrower or any of such other guarantors and whether or
not the Borrower is joined in any such action or actions.
(d) Payment by any Guarantor of a portion, but not all,
of the Guarantied Obligations shall in no way limit, affect, modify or
abridge any Guarantor's liability for any portion of the Guarantied
Obligations which has not been paid. Without limiting the generality
of the foregoing, if Agent is awarded a judgment in any suit brought
to enforce any Guarantor's covenant to pay a portion of the Guarantied
Obligations, such judgment shall not be deemed to release such
Guarantor from its covenant to pay the portion of the Guarantied
Obligations that is not the subject of such suit, and such judgment
shall not, except to the extent satisfied by such Guarantor, limit,
affect, modify or abridge any other Guarantor's liability hereunder in
respect of the Guarantied Obligations.
(e) Agent or any Lender, upon such terms as it deems
appropriate, without notice or demand and without affecting the
validity or enforceability of this Guaranty or giving rise to any
reduction, limitation, impairment, discharge or
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termination of any Guarantor's liability hereunder, from time to time
may (i) renew, extend, accelerate, increase the rate of interest on,
or otherwise change the time, place, manner or terms of payment of the
Guarantied Obligations; (ii) settle, compromise, release or discharge,
or accept or refuse any offer of performance with respect to, or
substitutions for, the Guarantied Obligations or any agreement
relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other
guaranties of the Guarantied Obligations and take and hold security
for the payment of this Guaranty or the Guarantied Obligations; (iv)
release, surrender, exchange, substitute, compromise, settle, rescind,
waive, alter, subordinate or modify, with or without consideration,
any security for payment of the Guarantied Obligations, any other
guaranties of the Guarantied Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the
Guarantied Obligations; (v) enforce and apply any security now or
hereafter held by or for the benefit of Agent or any Lender in respect
of this Guaranty or the Guarantied Obligations and direct the order or
manner of sale thereof, or exercise any other right or remedy that
Agent or Lenders, or any of them, may have against any such security,
as Agent in its discretion may determine consistent with the Credit
Agreement and any applicable security agreement, including foreclosure
on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially
reasonable, and even though such action operates to impair or
extinguish any right of reimbursement or subrogation or other right or
remedy of any Guarantor against the Borrower or any security for the
Guarantied Obligations; and (vi) exercise any other rights available
to it under the Loan Documents.
(f) This Guaranty and the obligations of Guarantors
hereunder shall be valid and enforceable and shall not be subject to
any reduction, limitation, impairment, discharge or termination for
any reason (other than payment in full of the Guarantied Obligations),
including without limitation the occurrence of any of the following,
whether or not any Guarantor shall have had notice or knowledge of any
of them: (i) any failure or omission to assert or enforce or agreement
or election not to assert or enforce, or the stay or enjoining, by
order of court, by operation of law or otherwise, of the exercise or
enforcement of, any claim or demand or any right, power or remedy
(whether arising under the Loan Documents, at law, in equity or
otherwise) with respect to the Guarantied Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security
for the payment of the Guarantied Obligations; (ii) any rescission,
waiver, amendment or modification of, or any consent to departure
from, any of the terms or provisions (including without limitation
provisions relating to events of default) of the Credit Agreement, any
of the other Loan Documents or any agreement or instrument executed
pursuant thereto, or of any other guaranty or security for the
Guarantied Obligations, in each case whether or not in accordance with
the terms of the Credit Agreement or such Loan Document or any
agreement relating to such other guaranty or security; (iii) the
Guarantied
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Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments
received pursuant to the other Loan Documents or from the proceeds of
any security for the Guarantied Obligations, except to the extent such
security also serves as collateral for indebtedness other than the
Guarantied Obligations) to the payment of indebtedness other than the
Guarantied Obligations, even though Agent or Lenders, or any of them,
might have elected to apply such payment to any part or all of the
Guarantied Obligations; (v) any Lender's or Agent's consent to the
change, reorganization or termination of the corporate structure or
existence of the Borrower or any of its Subsidiaries and to any
corresponding restructuring of the Guarantied Obligations; (vi) any
failure to perfect or continue perfection of a security interest in
any collateral which secures any of the Guarantied Obligations; (vii)
any defenses, set-offs or counterclaims which the Borrower may allege
or assert against Agent or any Lender in respect of the Guarantied
Obligations, including but not limited to failure of consideration,
breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury; and (viii) any other
act or thing or omission, or delay to do any other act or thing, which
may or might in any manner or to any extent vary the risk of any
Guarantor as an obligor in respect of the Guarantied Obligations.
2.5 WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the
benefit of Lenders and Agent:
(a) any right to require Agent or Lenders, as a condition
of payment or performance by such Guarantor, to (i) proceed against
the Borrower, any other guarantor (including any other Guarantor) of
the Guarantied Obligations or any other Person, (ii) proceed against
or exhaust any security held from the Borrower, any other guarantor
(including any other Guarantor) of the Guarantied Obligations or any
other Person, (iii) proceed against or have resort to any balance of
any deposit account or credit on the books of Agent or any Lender in
favor of the Borrower or any other Person, or (iv) pursue any other
remedy in the power of Agent or any Lender whatsoever;
(b) any defense arising by reason of the incapacity, lack
of authority or any disability or other defense of the Borrower
including, without limitation, any defense based on or arising out of
the lack of validity or the unenforceability of the Guarantied
Obligations or any agreement or instrument relating thereto or by
reason of the cessation of the liability of the Borrower from any
cause other than payment in full of the Guarantied Obligations;
(c) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger
in amount nor in other respects more burdensome than that of the
principal;
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(d) any defense based upon Agent's or any Lender's errors
or omissions in the administration of the Guarantied Obligations,
except behavior which amounts to bad faith or gross negligence;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of such Guarantor's
obligations hereunder, (ii) the benefit of any statute of limitations
affecting such Guarantor's liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims,
and (iv) promptness, diligence and any requirement that Agent or any
Lender protect, secure, perfect or insure any security interest or
lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under the
Credit Agreement or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Guarantied
Obligations or any agreement related thereto, notices of any extension
of credit to the Borrower and notices of any of the matters referred
to in subsection 2.4 and any right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors
or sureties, or which may conflict with the terms of this Guaranty.
2.6 GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Each
Guarantor hereby waives any claim, right or remedy, direct or indirect, that
such Guarantor now has or may hereafter have against the Borrower or the
Borrower's assets in connection with this Guaranty or the performance by such
Guarantor of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including without limitation (i) any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
have against the Borrower, (ii) any right to enforce, or to participate in, any
claim, right or remedy that Agent or any Lender now has or may hereafter have
against the Borrower, and (iii) any benefit of, and any right to participate
in, any collateral or security now or hereafter held by Agent or any Lender.
In addition, until the Guarantied Obligations shall have been paid in full, the
Commitments shall have been terminated and all Letters of Credit shall have
expired or been cancelled, each Guarantor shall withhold exercise of any right
of contribution such Guarantor may have against any other guarantor (including
any other Guarantor) of any of the Guarantied Obligations (including without
limitation any such right of contribution under subsection 2.2(b) or under a
Related Guaranty as contemplated by subsection 2.2(b)). Each Guarantor further
agrees that, to the extent the waiver or agreement to withhold the exercise of
its rights of subrogation,
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reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification such Guarantor may have
against the Borrower or against any collateral or security, and any rights of
contribution such Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights Agent or Lenders may have against the
Borrower, to all right, title and interest Agent or Lenders may have in any
such collateral or security, and to any right Agent or Lenders may have against
such other guarantor. If any amount shall be paid to any Guarantor on account
of any such subrogation, reimbursement or indemnification rights at any time
when all Guarantied Obligations shall not have been paid in full, such amount
shall be held in trust for Agent on behalf of Lenders and shall forthwith be
paid over to Agent for the benefit of Lenders to be credited and applied
against the Guarantied Obligations, whether matured or unmatured, in accordance
with the terms hereof.
2.7 SUBORDINATION OF OTHER OBLIGATIONS. Any indebtedness of the
Borrower now or hereafter held by any Guarantor is hereby subordinated in right
of payment to the Guarantied Obligations, and any such indebtedness of the
Borrower to such Guarantor collected or received by such Guarantor after an
Event of Default has occurred and while it is continuing shall be held in trust
for Agent on behalf of Lenders and shall forthwith be paid over to Agent for
the benefit of Lenders to be credited and applied against the Guarantied
Obligations but without affecting, impairing or limiting in any manner the
liability of such Guarantor under any other provision of this Guaranty.
2.8 EXPENSES. Guarantors jointly and severally agree to pay, or
cause to be paid, on demand, and to save Agent and Lenders harmless against
liability for, any and all costs and expenses (including reasonable fees and
disbursements of counsel and reasonable allocated costs of internal counsel)
incurred or expended by Agent or any Lender in connection with the enforcement
of or preservation of any rights under this Guaranty.
2.9 CONTINUING GUARANTY. This Guaranty is a continuing guaranty
and shall remain in effect until all of the Guarantied Obligations shall have
been paid in full, the Commitments shall have terminated and all Letters of
Credit shall have expired or been cancelled. Each Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future transactions giving rise
to any Guarantied Obligations.
2.10 AUTHORITY OF GUARANTORS OR BORROWER. It is not necessary for
Lenders or Agent to inquire into the capacity or powers of any Guarantor or the
Borrower or the officers, directors or any agents acting or purporting to act
on behalf of any of them.
2.11 FINANCIAL CONDITION OF BORROWER. Any Loans may be granted to
the Borrower or continued from time to time without notice to or authorization
from any Guarantor regardless of the financial or other condition of the
Borrower at the time of any such grant or continuation. Lenders and Agent
shall have no obligation to disclose or discuss with any Guarantor their
assessment, or any Guarantor's assessment, of the financial condition of the
Borrower. Each Guarantor has adequate means to obtain information from the
Borrower on a continuing basis concerning the financial condition of
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such Borrower and its ability to perform its obligations under the Loan
Documents, and each Guarantor assumes the responsibility for being and keeping
informed of the financial condition of the Borrower and of all circumstances
bearing upon the risk of nonpayment of the Guarantied Obligations. Each
Guarantor hereby waives and relinquishes any duty on the part of Agent or any
Lender to disclose any matter, fact or thing relating to the business,
operations or conditions of the Borrower now known or hereafter known by Agent
or any Lender.
2.12 RIGHTS CUMULATIVE. The rights, powers and remedies given to
Lenders and Agent by this Guaranty are cumulative and shall be in addition to
and independent of all rights, powers and remedies given to Lenders and Agent
by virtue of any statute or rule of law or in any of the other Loan Documents
or any agreement between any Guarantor and Lenders and/or Agent or between the
Borrower and Lenders and/or Agent. Any forbearance or failure to exercise, and
any delay by any Lender or Agent in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to
be a waiver thereof, nor shall it preclude the further exercise of any such
right, power or remedy.
2.13 BANKRUPTCY; POST-PETITION INTEREST; REINSTATEMENT OF GUARANTY.
(a) So long as any Guarantied Obligations remain outstanding, no Guarantor
shall, without the prior written consent of Agent in accordance with the terms
of the Credit Agreement, commence or join with any other Person in commencing
any bankruptcy, reorganization or insolvency proceedings of or against the
Borrower. The obligations of Guarantors under this Guaranty shall not be
reduced, limited, impaired, discharged, deferred, suspended or terminated by
any proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of the Borrower or by
any defense which the Borrower may have by reason of the order, decree or
decision of any court or administrative body resulting from any such
proceeding.
(b) Each Guarantor acknowledges and agrees that any
interest on any portion of the Guarantied Obligations which accrues after the
commencement of any proceeding referred to in clause (a) above (or, if interest
on any portion of the Guarantied Obligations ceases to accrue by operation of
law by reason of the commencement of said proceeding, such interest as would
have accrued on such portion of the Guarantied Obligations if said proceedings
had not been commenced) shall be included in the Guarantied Obligations because
it is the intention of Guarantors and Agent that the Guarantied Obligations
which are guarantied by Guarantors pursuant to this Guaranty should be
determined without regard to any rule of law or order which may relieve the
Borrower of any portion of such Guarantied Obligations. Guarantors will permit
any trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors or similar person to pay Agent, or allow the claim of
Agent in respect of, any such interest accruing after the date on which such
proceeding referred to in clause (a) above is commenced.
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(c) In the event that all or any portion of the
Guarantied Obligations are paid by the Borrower, the obligations of Guarantors
hereunder shall continue and remain in full force and effect or be reinstated,
as the case may be, in the event that all or any part of such payment(s) are
rescinded or recovered directly or indirectly from Agent or any Lender as a
preference, fraudulent transfer or otherwise, and any such payments which are
so rescinded or recovered shall constitute Guarantied Obligations for all
purposes under this Guaranty.
2.14 NOTICE OF EVENTS. As soon as any executive officer of any
Guarantor obtains knowledge thereof, such Guarantor shall give Agent written
notice of any condition or event which has resulted in (a) a material adverse
change in the financial condition of Guarantors and Borrower, taken as a whole,
or (b) a breach of or noncompliance with any term, condition or covenant
contained herein or in the Credit Agreement, any other Loan Document or any
other document delivered pursuant hereto or thereto.
2.15 SET OFF. In addition to any other rights any Lender or Agent
may have under law or in equity, if any amount shall at any time during an
Event of Default be due and owing by any Guarantor to any Lender or Agent under
this Guaranty, such Lender or Agent is authorized at any time or from time to
time, without notice (any such notice being hereby expressly waived), to set
off and to appropriate and to apply any and all deposits (general or special,
including but not limited to indebtedness evidenced by certificates of deposit,
whether matured or unmatured) and any other indebtedness of any Lender or Agent
owing to such Guarantor and any other property of such Guarantor held by any
Lender or Agent to or for the credit or the account of such Guarantor against
and on account of the Guarantied Obligations and liabilities of such Guarantor
to any Lender or Agent under this Guaranty.
2.16 DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the
stock of any Guarantor or any of its successors in interest under this Guaranty
shall be sold or otherwise disposed of (including by merger or consolidation)
in an Asset Sale not prohibited by subsection 7.7 of the Credit Agreement or
otherwise consented to by Requisite Lenders, the Guaranty of such Guarantor or
such successor in interest, as the case may be, hereunder shall automatically
be discharged and released without any further action by Agent or any Lender or
any other Person effective as of the time of such Asset Sale; provided that, as
a condition precedent to such discharge and release, Agent shall have received
evidence satisfactory to it that arrangements satisfactory to it have been made
for delivery to Agent of the net cash proceeds of such Asset Sale to the extent
required by the Credit Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and Agent to accept this Guaranty
and to enter into the Credit Agreement and to make the Loans thereunder, each
Guarantor hereby represents and warrants to Lenders that the following
statements are true and correct:
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3.1 CORPORATE EXISTENCE. Such Guarantor is duly organized,
validly existing and in good standing under the laws of the state of its
incorporation, has the corporate power to own its assets and to transact the
business in which it is now engaged and is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, except for failures to be so qualified, authorized or licensed
that would not in the aggregate have a material adverse effect on the business,
operations, assets or financial condition of such Guarantor and its
Subsidiaries, taken as a whole.
3.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Such
Guarantor has the corporate power, authority and legal right to execute,
deliver and perform this Guaranty and all obligations required hereunder and
has taken all necessary corporate action to authorize its Guaranty hereunder on
the terms and conditions hereof and its execution, delivery and performance of
this Guaranty and all obligations required hereunder. No consent of any other
Person including, without limitation, stockholders and creditors of such
Guarantor, and no license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority is required by such Guarantor in connection with this
Guaranty or the execution, delivery, performance, validity or enforceability of
this Guaranty and all obligations required hereunder. This Guaranty has been,
and each instrument or document required hereunder will be, executed and
delivered by a duly authorized officer of such Guarantor, and this Guaranty
constitutes, and each instrument or document required hereunder when executed
and delivered by such Guarantor hereunder will constitute, the legally valid
and binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws or
equitable principles relating to or limiting creditors' rights generally.
3.3 NO LEGAL BAR TO THIS GUARANTY. The execution, delivery and
performance of this Guaranty and the documents or instruments required
hereunder, and the use of the proceeds of the borrowings under the Credit
Agreement, will not violate any provision of any existing law or regulation
binding on such Guarantor, or any order, judgment, award or decree of any
court, arbitrator or governmental authority binding on such Guarantor, or the
certificate of incorporation or bylaws of such Guarantor or any securities
issued by such Guarantor, or any mortgage, indenture, lease, contract or other
agreement, instrument or undertaking to which such Guarantor is a party or by
which such Guarantor or any of its assets may be bound, the violation of which
would have a material adverse effect on the business, operations, assets or
financial condition of such Guarantor and its Subsidiaries, taken as a whole,
and will not result in, or require, the creation or imposition of any Lien on
any of its property, assets or revenues pursuant to the provisions of any such
mortgage, indenture, lease, contract or other agreement, instrument or
undertaking.
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SECTION 4. MISCELLANEOUS
4.1 SURVIVAL OF WARRANTIES. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Guaranty and the other Loan Documents and any increase in the Commitments under
the Credit Agreement.
4.2 NOTICES. Any communications between Agent and any Guarantor
and any notices or requests provided herein to be given may be given by mailing
the same, postage prepaid, or by telex, facsimile transmission or cable to each
such party at its address set forth in the Credit Agreement, on the signature
pages hereof or to such other addresses as each such party may in writing
hereafter indicate. Any notice, request or demand to or upon Agent or Lenders
or any Guarantor shall not be effective until received.
4.3 SEVERABILITY. In case any provision in or obligation under
this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
4.4 AMENDMENTS AND WAIVERS. No amendment, modification,
termination or waiver of any provision of this Guaranty, and no consent to any
departure by any Guarantor therefrom, shall in any event be effective without
the written concurrence of Requisite Lenders under the Credit Agreement and, in
the case of any such amendment or modification, each Guarantor against whom
enforcement of such amendment or modification is sought. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.
4.5 HEADINGS. Section and subsection headings in this Guaranty
are included herein for convenience of reference only and shall not constitute
a part of this Guaranty for any other purpose or be given any substantive
effect.
4.6 APPLICABLE LAW. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS
OF GUARANTORS, AGENT AND LENDERS HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
4.7 SUCCESSORS AND ASSIGNS. This Guaranty is a continuing
guaranty and shall be binding upon each Guarantor and its respective successors
and assigns. This Guaranty shall inure to the benefit of Lenders, Agent and
their respective permitted successors and assigns. No Guarantor shall assign
this Guaranty or any of the rights or obligations of such Guarantor hereunder
without the prior written consent of all Lenders. Any Lender may, without
notice or consent, assign its interest in this Guaranty in whole or in part.
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The terms and provisions of this Guaranty shall inure to the benefit of any
permitted transferee or assignee of any Loan, and in the event of such
permitted transfer or assignment the rights and privileges herein conferred
upon Lenders and Agent shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof.
4.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY EACH
GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY. Each
Guarantor hereby agrees that service of all process in any such proceeding in
any such court may be made by registered or certified mail, return receipt
requested, to such Guarantor at its address provided in subsection 4.2, such
service being hereby acknowledged by such Guarantor to be sufficient for
personal jurisdiction in any action against such Guarantor in any such court
and to be otherwise effective and binding service in every respect. Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of Agent or any Lender to bring proceedings
against any Guarantor in the courts of any other jurisdiction.
4.9 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY LAW, EACH
GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, AGENT EACH HEREBY
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. The scope of this waiver is
intended to be all encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. Each Guarantor and, by its acceptance
of the benefits hereof, Agent, each (i) acknowledges that this waiver is a
material inducement for such Guarantor and Agent to enter into a business
relationship, that such Guarantor and Agent have already relied on this waiver
in entering into this Guaranty or accepting the benefits thereof, as the case
may be, and that each will continue to rely on this waiver in their related
future dealings and (ii) further warrants and represents that each has reviewed
this waiver with its legal counsel, and that each knowingly and voluntarily
waives its jury trial rights following consultation with legal counsel. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY. In
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the event of litigation, this Guaranty may be filed as a written consent to a
trial by the court.
4.10 NO OTHER WRITING. This writing is intended by Guarantors and
Agent as the final expression of this Guaranty and is also intended as a
complete and exclusive statement of the terms of their agreement with respect
to the matters covered hereby. No course of dealing, course of performance or
trade usage, and no parol evidence of any nature, shall be used to supplement
or modify any terms of this Guaranty. There are no conditions to the full
effectiveness of this Guaranty.
4.11 FURTHER ASSURANCES. At any time or from time to time, upon
the request of Agent or Requisite Lenders, Guarantors shall execute and deliver
such further documents and do such other acts and things as Agent or Requisite
Lenders may reasonably request in order to effect fully the purposes of this
Guaranty.
4.12 ADDITIONAL GUARANTORS. The initial Guarantors hereunder shall
be such of the Subsidiaries of Company as are signatories hereto on the date
hereof. From time to time subsequent to the date hereof, additional
Subsidiaries of Company may become parties hereto, as additional Guarantors
(each an "ADDITIONAL GUARANTOR"), by executing a counterpart of this Guaranty.
Upon delivery of any such counterpart to Agent, notice of which is hereby
waived by Guarantors, each such Additional Guarantor shall be a Guarantor and
shall be as fully a party hereto as if such Additional Guarantor were an
original signatory hereof. Each Guarantor expressly agrees that its
obligations arising hereunder shall not be affected or diminished or novated by
the addition or release of any other Guarantor hereunder, nor by any election
of Agent not to cause any Subsidiary of Company to become an Additional
Guarantor hereunder. This Guaranty shall be fully effective as to any
Guarantor that is or becomes a party hereto regardless of whether any other
Person becomes or fails to become or ceases to be a Guarantor hereunder.
4.13 COUNTERPARTS; EFFECTIVENESS. This Guaranty may be executed in
any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original for all purposes; but all such counterparts together shall
constitute but one and the same instrument. This Guaranty shall become
effective as to each Guarantor upon the execution of a counterpart hereof by
such Guarantor (whether or not a counterpart hereof shall have been executed by
any other Guarantor) and receipt by Agent of written or telephonic notification
of such execution and authorization of delivery thereof.
4.14 LIMITATION ON INTEREST. Interest on the indebtedness evidenced
by this Guaranty is expressly limited so that in no contingency or event
whatsoever, whether by acceleration of the maturity of the indebtedness
evidenced by this Guaranty or otherwise, shall the interest contracted for,
charged or received by the Lenders exceed the maximum amount permissible under
applicable law. If from any circumstances whatsoever fulfillment of any
provisions of this Guaranty, the other Loan documents or of any other document
evidencing, securing, guaranteeing or otherwise pertaining to the indebtedness
evidenced hereby, at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by law, then, ipso facto,
the obligation to be fulfilled shall be reduced to the limit of such validity,
and if from any such circumstances the Lenders shall ever receive anything of
value as interest or deemed interest by applicable law under this Guaranty, the
other Loan Documents or any other document evidencing, securing, guaranteeing
or otherwise pertaining to the indebtedness
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evidenced hereby or otherwise in an amount that would exceed the highest lawful
amount (the "Maximum Rate"), such amount that would be excessive interest shall
be applied to the reduction of the principal amount owing on the indebtedness
evidenced by this Guaranty or on account of any other indebtedness of the
Guarantor to the Lenders, and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of principal of the indebtedness
evidenced by this Guaranty and such other indebtedness, such excess shall be
refunded to the Guarantor. In determining whether or not the interest paid or
payable with respect to any indebtedness of the Guarantor to the Lenders, under
any specific contingency, exceeds the highest lawful rate, the Lenders may, at
their option, (a) characterize any non-principal payment as an expense, fee or
premium rather than as interest, (b) exclude voluntary prepayments and the
effects thereof, (c) amortize, prorate, allocate and spread the total amount of
interest throughout the full term of such indebtedness so that the actual rate
of interest on account of such indebtedness does not exceed the maximum amount
permitted by applicable law, and/or (d) allocate interest between portions of
such indebtedness so that the actual rate of interest on account of such
indebtedness does not exceed the maximum amount permitted by applicable law,
and/or (d) allocate interest between portions of such indebtedness, to the end
that no such portion shall bear interest at a rate greater than that permitted
by law. Notwithstanding the foregoing, if for any period of time interest on
any such indebtedness evidenced by this Guaranty is calculated at the Maximum
Rate rather than the applicable rate under the Loan Documents, and thereafter
such applicable rate become less than the Maximum Rate, the rate of interest
payable on such indebtedness shall remain at the Maximum Rate until each Lender
shall have received the amount of interest which such Lender would have
received during such period on such indebtedness had the rate of interest not
been limited to the Maximum Rate during such period. The terms and provisions
of this paragraph shall control and supersede every other conflicting provision
of this Guaranty.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, each of the undersigned Guarantors has
caused this Guaranty to be duly executed and delivered by its officer thereunto
duly authorized as of the date first written above.
[NAME OF GUARANTOR]
-------------------------------------------
By:
----------------------------------------
Title:
--------------------------------
Address:
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309
IN WITNESS WHEREOF, the undersigned Additional Guarantor has
caused this Guaranty to be duly executed and delivered by its officer thereunto
duly authorized as of ______________, ____.
------------------------------------------
(Name of Additional Guarantor)
By:
---------------------------------------
Title:
-------------------------------
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EXHIBIT XXII
[FORM OF SUBSIDIARY SECURITY AGREEMENT]
SUBSIDIARY SECURITY AGREEMENT
This SUBSIDIARY SECURITY AGREEMENT (this "AGREEMENT") is dated
as of ___________, ____ and entered into by and between [NAME OF SUBSIDIARY], a
_______________corporation ("GRANTOR"), and BT COMMERCIAL CORPORATION, as agent
for and representative of (in such capacity herein called "SECURED PARTY") the
financial institutions ("LENDERS") party to the Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS
A. Secured Party and Lenders have entered into a Credit
Agreement dated as of November 12, 1997 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with FWT, Inc., a Texas
corporation ("COMPANY" or "BORROWER"), pursuant to which Lenders have made
certain commitments, subject to the terms and conditions set forth in the
Credit Agreement, to extend certain credit facilities to Borrower.
B. Grantor has executed and delivered the Subsidiary
Guaranty dated as of ___________, ____ (said Subsidiary Guaranty, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "GUARANTY") in favor of Secured Party for the benefit of Lenders,
pursuant to which Grantor has guarantied the prompt payment and performance
when due of all Obligations of the Borrower under the Credit Agreement.
C. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Grantor shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Secured
Party as follows:
SECTION 1. GRANT OF SECURITY. Grantor hereby assigns for
security purposes to Secured Party, and hereby grants to Secured Party a
security interest in, all of Grantor's right, title and interest in and to the
following, in each case whether now or
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hereafter existing or in which Grantor now has or hereafter acquires an
interest and wherever the same may be located (the "COLLATERAL"):
(a) all machinery and equipment in all of its forms
(including, but not limited to, all computers, office furniture, other office
equipment and rolling stock), all parts thereof and all accessions thereto (any
and all such equipment, parts and accessions being the "EQUIPMENT");
(b) all inventory in all of its forms (including, but not
limited to, (i) all goods held by Grantor for sale or lease or to be furnished
under contracts of service or so leased or furnished, (ii) all raw materials,
work in process, finished goods, and materials used or consumed in the
manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in Grantor's
business, (iii) all goods in which Grantor has an interest in mass or a joint
or other interest or right of any kind, and (iv) all goods which are returned
to or repossessed by Grantor, and (v) any inventory specifically listed in
Schedule I annexed hereto) and all accessions thereto and products thereof (all
such inventory, accessions and products being the "INVENTORY") and all
negotiable documents of title (including without limitation warehouse receipts,
dock receipts and bills of lading) issued by any Person covering any Inventory
(any such negotiable document of title being a "NEGOTIABLE DOCUMENT OF TITLE");
(c) all accounts, contract rights, chattel paper,
documents, instruments, general intangibles and other rights and obligations of
any kind arising out of or in connection with the sale or lease of goods or the
rendering of services and all rights in, to and under all security agreements,
leases and other contracts securing or otherwise relating to any such accounts,
contract rights, chattel paper, documents, instruments, investment property,
general intangibles or other obligations (any and all such accounts, contract
rights, chattel paper, documents, instruments, general intangibles and other
obligations being the "ACCOUNTS", and any and all such security agreements,
leases and other contracts being the "RELATED CONTRACTS");
(d) any agreements, if any, specifically listed in
Schedule I annexed hereto, as each such agreement may be amended, supplemented
or otherwise modified from time to time (said agreements, as so amended,
supplemented or otherwise modified, being referred to herein individually as an
"ASSIGNED AGREEMENT" and collectively as the "ASSIGNED AGREEMENTS"), including
without limitation (i) all rights of Grantor to receive moneys due or to become
due under or pursuant to the Assigned Agreements, (ii) all rights of Grantor to
receive proceeds of any insurance, indemnity, warranty or guaranty with respect
to the Assigned Agreements, (iii) all claims of Grantor for damages arising out
of any breach of or default under the Assigned Agreements, and (iv) all rights
of Grantor to terminate, amend, supplement, modify or exercise rights or
options under the Assigned Agreements, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder;
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(e) all deposit accounts, including without limitation
any deposit accounts specifically listed in Schedule I annexed hereto, and all
deposit accounts maintained with Secured Party;
(f) all trademarks, tradenames, tradesecrets, business
names, patents, patent applications, licenses, copyrights, registrations and
franchise rights (including, but not limited to, any trademarks, copyrights or
patents listed in Schedule I hereto) (collectively, "INTELLECTUAL PROPERTY")
and all goodwill associated with any of the foregoing and all renewals,
reissues and extensions of, all applications for any such trademarks,
tradenames, patents, licenses, copyrights and registrations;
(g) to the extent not included in any other paragraph of
this Section 1, all investment property and all other general intangibles
(including without limitation all production techniques, quality control
procedures and product specifications relating to the products and services
sold or delivered by Grantor and all tax refunds, rights to payment or
performance, choses in action and judgments taken on any rights or claims
included in the Collateral);
(h) all plant fixtures, business fixtures and other
fixtures and storage and office facilities, and all accessions thereto and
products thereof;
(i) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon; and
(j) all proceeds, products, rents and profits of or from
any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "PROCEEDS" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
Notwithstanding the foregoing, Collateral shall exclude any
intellectual property right contracts and agreements to the extent, and only to
the extent, that such Intellectual Property, contract or agreement contains a
provision enforceable at law and in equity that would be breached by (or would
result in the termination of such intellectual property, contract, or agreement
upon) the grant of the security interest created herein pursuant to the terms
of this Agreement; provided, however, that if and when any prohibition on the
assignment, pledge or grant of a security interest in such intellectual
property right, contract or agreement is removed, the Secured Party will be
deemed to have been granted a security interest in such intellectual property
right, contract or
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agreement as of the date hereof, and the Collateral will be deemed to include
such intellectual property right, contract or agreement.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Grantor now or hereafter
existing under or arising out of or in connection with the Credit Agreement,
the Guaranty and the other Loan Documents and all extensions or renewals
thereof, whether for principal, interest (including without limitation interest
that, but for the filing of a petition in bankruptcy with respect to Grantor,
would accrue on such obligations), reimbursement of amounts drawn under Letters
of Credit, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender as a preference,
fraudulent transfer or otherwise (all such obligations and liabilities being
the "UNDERLYING DEBT"), and all obligations of every nature of Grantor now or
hereafter existing under this Agreement (all such obligations of Grantor,
together with the Underlying Debt, being the "SECURED OBLIGATIONS").
SECTION 3. GRANTOR REMAINS LIABLE. Anything contained herein
to the contrary notwithstanding, (a) Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Party of any of its rights hereunder shall not release Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or liability
under any contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Grantor
represents and warrants as follows:
(a) Ownership of Collateral. Except for Liens permitted
under the Credit Agreement and the security interest created by any Collateral
Document, Grantor owns the Collateral free and clear of any Lien. Except for
any financing statements listed in Schedule III annexed hereto and such
financing statements as may have been filed in favor of Secured Party relating
to this Agreement, no effective financing statement or
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other instrument similar in effect covering all or any part of the Collateral
is on file in any filing or recording office as of the date hereof.
(b) Location of Equipment and Inventory. All of the
Equipment and Inventory is, as of the date hereof, located at the places
specified in Schedule II annexed hereto.
(c) Negotiable Documents of Title. No Negotiable
Documents of Title are outstanding as of the date hereof with respect to any of
the Inventory (other than in respect of (i) Inventory with an aggregate value
not in excess of $50,000 or (ii) Inventory which, in the ordinary course of
business, is in transit either (A) from a supplier to Grantor, (B) between the
locations specified in Schedule II hereto, or (C) to customers of Grantor).
(d) Office Locations; Other Names. The chief place of
business, the chief executive office and the office where Grantor keeps its
records regarding the Accounts and all originals of all chattel paper that
evidence Accounts is, and has been for the four month period preceding the date
hereof, located at the locations identified as such on Schedule II hereto.
Grantor has not in the past done, and does not now do, business under any other
name (including any trade-name or fictitious business name) except as set forth
on Schedule II hereto.
(e) Delivery of Certain Collateral. All notes and other
instruments (excluding checks) comprising any and all items of Collateral have
been delivered to Secured Party duly endorsed and accompanied by duly executed
instruments of transfer or assignment in blank.
(f) Patents, Trademarks and Copyrights. Schedule I
hereto includes all registered trademarks, patents and copyrights owned as of
the date hereof by Grantor in its own name. Each trademark, patent and
copyright listed on Schedule I hereto is valid, subsisting, unexpired,
enforceable and has not been abandoned (except where Grantor has determined
that they have immaterial value). No action or proceeding is pending which, if
adversely determined, could be reasonably expected to have a material adverse
effect on the value of any material trademark, patent or copyright listed on
Schedule I.
(g) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the grant by Grantor of
the security interest granted hereby, (ii) the execution, delivery or
performance of this Agreement by Grantor, or (iii) the perfection of or the
exercise by Secured Party of its rights and remedies hereunder (except for
filings of UCC financing statements, filings with the United States Patent and
Trademark Office, and any state trademark filing as identified by Grantor to
Secured Party, and as may have been taken by or at the direction of Grantor).
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(h) Perfection. This Agreement, together with (i) the
filing of financing statements in the jurisdictions listed in Schedule II
hereto, (ii) the recording of the Subsidiary Patent Security Agreement to which
Grantor is a party in the United States Trademark Office ("PTO"), (iii) the
recording of the Subsidiary Trademark Security Agreement to which Grantor is a
party in the PTO, and (iv) delivery to, and possession by, the Secured Party,
of notes and instruments constituting Collateral, creates a valid, perfected
and, except as may be permitted under the Intercreditor Agreement with respect
to machinery and equipment, first priority security interest in the Collateral,
securing the payment of the Secured Obligations, and all filings and other
actions necessary or desirable to perfect and protect such security interest
have been duly made or taken.
(i) Other Information. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of Grantor with
respect to the Collateral is accurate and complete in all respects.
SECTION 5. FURTHER ASSURANCES.
(a) Grantor agrees that from time to time, at the expense
of Grantor, Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may reasonably request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
Grantor will: (i) ▇▇▇▇ conspicuously each item of chattel paper included in
the Accounts, each Related Contract and, at the request of Secured Party, each
of its records pertaining to the Collateral, with a legend, in form and
substance satisfactory to Secured Party, indicating that such Collateral is
subject to the security interest granted hereby, (ii) if any Account shall be
evidenced by a promissory note or other instrument (excluding checks), deliver
and pledge to Secured Party hereunder such note or instrument, duly endorsed
and accompanied by duly executed instruments of transfer or assignment, all in
form and substance satisfactory to Secured Party, and at the request of Secured
Party, deliver and pledge to Secured Party hereunder all original counterparts
of chattel paper constituting Collateral, duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to Secured Party, (iii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Secured Party may request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby, (iv) promptly after the acquisition by Grantor of any item of
Equipment which is covered by a certificate of title under a statute of any
jurisdiction under the law of which indication of a security interest on such
certificate is required as a condition of perfection thereof, at the request of
Secured Party, execute and file with the registrar of motor vehicles or other
appropriate authority in such jurisdiction an application or other document
requesting the notation or other indication of the security interest created
hereunder on such certificate of title, (v) within 30 days after the end of
each calendar quarter, deliver to Agent copies of
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all such applications or other documents filed during such calendar quarter and
copies of all such certificates of title issued during such calendar quarter
indicating the security interest created hereunder in the items of Equipment
covered thereby, (vi) at any reasonable time, upon request by Secured Party,
exhibit the Collateral to and allow inspection of the Collateral by Secured
Party, or persons designated by Secured Party, and (vii) at Secured Party's
request, appear in and defend any action or proceeding that may affect
Grantor's title to or Secured Party's security interest in all or any part of
the Collateral.
(b) If Grantor shall obtain rights to any new trademarks
or patents, the provisions of this Agreement shall automatically apply thereto.
Grantor shall promptly notify the Secured Party in writing of any rights to any
new trademark registrations, or issued patent registrations acquired by Grantor
after the date hereof and of any applications therefor made after the date
hereof. Concurrently with such acquisition or with the filing of any such
application or registration, Grantor shall execute, deliver and record in all
places where the Secured Party deems necessary or desirable to perfect or
protect its interest in such Collateral an appropriate conditional assignment
or other agreement or instrument, in form and substance satisfactory to the
Secured Party, pursuant to which Grantor shall grant a security interest and
conditional assignment to the extent of its interest in such patent or
trademark as provided herein to the Secured Party, unless so doing would, in
the reasonable judgment of Grantor, after due inquiry, result in the grant of a
patent or registration of trademark in the name of the Secured Party, in which
event Grantor shall give written notice to the Secured Party as soon as
reasonably practicable and the filing shall instead by undertaken as soon as
practicable but in no case later than immediately following the grant or the
registration of the patent or trademark.
(c) Grantor hereby authorizes Secured Party to file (to
the extent 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 Grantor. Grantor agrees that a carbon, photographic or other
reproduction of this Agreement or of a financing statement signed by Grantor
shall be sufficient as a financing statement and may be filed as a financing
statement in any and all jurisdictions.
(d) Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
SECTION 6. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
(a) not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering the
Collateral;
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(b) notify Secured Party of any change in Grantor's name,
identity or corporate structure within 15 days after such change;
(c) give Secured Party at least 30 days' prior written
notice of any change in Grantor's chief place of business, chief executive
office or residence or the office where Grantor keeps its records regarding the
Accounts and all originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable Grantor to
acquire rights in or the use of any Collateral, use such value for such
purposes;
(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Collateral,
except to the extent the validity thereof is being contested in good faith;
provided that Grantor shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to the date of any proposed
sale under any judgement, writ or warrant of attachment entered or filed
against Grantor or any of the Collateral as a result of the failure to make
such payment; and
(f) shall use commercially reasonable efforts not to
permit the inclusion of any prohibitions on assignments, pledges or grants of
security interests in any licenses of Intellectual Property, contracts or
agreements entered into by Grantor after the date hereof.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND
INVENTORY. Grantor shall:
(a) keep the Equipment and Inventory at the places
therefor specified on Schedule II annexed hereto or, upon at least 30 days'
prior written notice to Secured Party, at such other places in jurisdictions
where all action that may be necessary or desirable, or that Secured Party may
request, in order to perfect and protect any security interest granted or
purported to be granted hereby, or to enable Secured Party to exercise and
enforce its rights and remedies hereunder, with respect to such Equipment and
Inventory shall have been taken;
(b) cause the Equipment to be maintained and preserved in
accordance with Grantor's past practices in good condition, ordinary wear and
tear excepted, and shall forthwith, or, in the case of any loss or damage to
any of the Equipment (other than obsolete or surplus Equipment) when subsection
(c) of Section 8 is not applicable, as quickly as practicable after the
occurrence thereof, make or cause to be made all repairs, replacements and
other improvements in connection therewith that are necessary or desirable to
such end. Grantor shall promptly furnish to Secured Party a statement
respecting any loss or damage to any of the Equipment that is material;
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(c) keep correct and accurate records of the Inventory,
itemizing and describing the kind, type and quantity thereof, Grantor's cost
therefor and (where applicable) the current list prices therefor; and
(d) if any Inventory is in possession or control of any
of Grantor's agents or processors, if the aggregate book value of all such
Inventory exceeds $100,000, and in any event upon the occurrence of an Event of
Default, instruct such agent or processor to hold all such Inventory for the
account of Secured Party and subject to the instructions of Secured Party; and
(e) promptly upon the issuance and delivery to Grantor of
any Negotiable Document of Title (other than any one or more Negotiable
Documents of Title covering (i) Inventory with an aggregate value not in excess
of $100,000 or (ii) Inventory which, in the ordinary course of business, is in
transit either (A) from a supplier to Grantor, (B) between the locations
specified in Schedule II hereto, or (C) to customers of Grantor), deliver such
Negotiable Document of Title to Secured Party.
SECTION 8. INSURANCE.
(a) Grantor shall, at its own expense, maintain insurance
with respect to the Equipment and Inventory in accordance with the terms of the
Credit Agreement, in such amounts, against such risks, in such form and with
such insurers as shall be required under the Credit Agreement from time to
time. Grantor shall, if so requested by Secured Party, deliver to Secured
Party original or duplicate policies of such insurance and, as often as Secured
Party may reasonably request, a report of a reputable insurance broker with
respect to such insurance. Further, Grantor shall, at the request of Secured
Party, duly execute and deliver instruments of assignment of such insurance
policies to comply with the requirements of Section 5(a) and cause the
respective insurers to acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance
maintained by Grantor pursuant to this Section 8 may be paid directly to the
Person who shall have incurred liability covered by such insurance. In case of
any loss involving damage to Equipment or Inventory when subsection (c) of this
Section 8 is not applicable, Grantor shall make or cause to be made the
necessary repairs to or replacements of such Equipment or Inventory, and any
proceeds of insurance maintained by Grantor pursuant to this Section 8 shall be
paid to Grantor as reimbursement for the costs of such repairs or replacements.
(c) All insurance payments in respect of such Equipment
or Inventory shall be paid to and applied by Secured Party as specified in
subsection 6.4 of the Credit Agreement.
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SECTION 9. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND
RELATED CONTRACTS.
(a) Grantor shall keep its chief place of business and
chief executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the location therefor specified in Section 4 or, upon at
least 30 days' prior written notice to Secured Party, at such other location in
a jurisdiction where all action that may be necessary or desirable, or that
Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby, or to enable
Secured Party to exercise and enforce its rights and remedies hereunder, with
respect to such Accounts and Related Contracts shall have been taken. Grantor
will hold and preserve such records and chattel paper and will permit
representatives of Secured Party at any time during normal business hours to
inspect and make abstracts from such records and chattel paper, and Grantor
agrees to render to Secured Party, at Grantor's cost and expense, such clerical
and other assistance as may be reasonably requested with regard thereto.
Promptly upon the request of Secured Party, Grantor shall deliver to Secured
Party complete and correct copies of each Related Contract.
(b) Grantor shall, for not less than three years from the
date on which such Account arose, maintain (i) complete records of each
Account, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this subsection (c),
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to Grantor under the Accounts and Related Contracts. In connection
with such collections, Grantor may take (and, at Secured Party's direction,
shall take) such action as Grantor or Secured Party may deem necessary or
advisable to enforce collection of amounts due or to become due under the
Accounts; provided, however, that Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default or
a Potential Event of Default and upon written notice to Grantor of its
intention to do so, to notify the account debtors or obligors under any
Accounts of the assignment of such Accounts to Secured Party and to direct such
account debtors or obligors to make payment of all amounts due or to become due
to Grantor thereunder directly to Secured Party, to notify each Person
maintaining a lockbox or similar arrangement to which account debtors or
obligors under any Accounts have been directed to make payment to remit all
amounts representing collections on checks and other payment items from time to
time sent to or deposited in such lockbox or other arrangement directly to
Secured Party and, upon such notification and at the expense of Grantor, to
enforce collection of any such Accounts and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as Grantor
might have done. After receipt by Grantor of the notice from Secured Party
referred to in the proviso to the preceding sentence, (i) all amounts and
proceeds (including checks and other instruments) received by Grantor in
respect of the Accounts and the Related Contracts shall be received in trust
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for the benefit of Secured Party hereunder, shall be segregated from other
funds of Grantor and shall be forthwith paid over or delivered to Secured Party
in the same form as so received (with any necessary endorsement) to be held as
cash Collateral and either (A) be released to Grantor so long as no Event of
Default shall have occurred and be continuing or (B) if any Event of Default
shall have occurred and be continuing, be applied as provided by Section 18,
and (ii) Grantor shall not adjust, settle or compromise the amount or payment
of any Account, or release wholly or partly any account debtor or obligor
thereof, or allow any credit or discount thereon.
SECTION 10. SPECIAL PROVISIONS WITH RESPECT TO THE ASSIGNED
AGREEMENTS.
(a) Grantor shall at its expense:
(i) perform and observe all terms and provisions
of the Assigned Agreements to be performed or observed by it, maintain
the Assigned Agreements in full force and effect, enforce the Assigned
Agreements in accordance with their terms, and take all such action to
such end as may be from time to time reasonably requested by Secured
Party; and
(ii) from time to time (A) furnish to Secured
Party such information and reports regarding the Assigned Agreements
as Secured Party may reasonably request and (B) upon request of
Secured Party make such demands and requests for information and
reports or for action as Grantor is entitled to make under the
Assigned Agreements.
(b) Grantor shall not during the continuance of any Event
of Default:
(i) cancel or terminate any of the Assigned
Agreements or consent to or accept any cancellation or termination
thereof;
(ii) amend or otherwise modify the Assigned
Agreements or give any consent, waiver or approval thereunder;
(iii) waive any default under or breach of the
Assigned Agreements; or
(iv) take any other action in connection with the
Assigned Agreements that would impair the value of the interest or
rights of Grantor thereunder or that would impair the interest or
rights of Secured Party.
SECTION 11. DEPOSIT ACCOUNTS. Upon the occurrence and during
the continuation of an Event of Default, Secured Party may exercise dominion
and control over, and refuse to permit further withdrawals (whether of money,
securities, instruments
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or other property) from any deposit accounts maintained with Secured Party
constituting part of the Collateral.
SECTION 12. LICENSE OF PATENTS, TRADEMARKS, COPYRIGHTS, ETC.
Grantor hereby grants to Secured Party, effective upon the occurrence and
during the continuation of any Event of Default, the nonexclusive right and
license to use all trademarks, tradenames, copyrights, patents or technical
processes owned or used by Grantor that relate to the Collateral and any other
collateral granted by Grantor as security for the Secured Obligations, together
with any goodwill associated therewith, all to the extent necessary to enable
Secured Party to use, possess and realize on the Collateral and to enable any
successor or assign to enjoy the benefits of the Collateral. This right and
license shall inure to the benefit of all successors, assigns and transferees
of Secured Party and its successors, assigns and transferees, whether by
voluntary conveyance, operation of law, assignment, transfer, foreclosure, deed
in lieu of foreclosure or otherwise. Such right and license is granted free of
charge, without requirement that any monetary payment whatsoever be made to
Grantor.
SECTION 13. TRANSFERS AND OTHER LIENS. Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the Credit
Agreement; or
(b) except for any Liens, if any, permitted under the
Credit Agreement and the security interest created by this Agreement, create or
suffer to exist any Lien upon or with respect to any of the Collateral to
secure the indebtedness or other obligations of any Person.
SECTION 14. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Grantor hereby irrevocably appoints Secured Party as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable, consistent with the provisions
of the Agreement, to accomplish the purposes of this Agreement, including
without limitation:
(a) to obtain and adjust insurance required to be
maintained by Grantor or paid to Secured Party pursuant to Section 8;
(b) during the continuation of any Event of Default, to
ask for, demand, collect, ▇▇▇ for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a) and (b)
above;
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(d) during the continuation of any Event of Default, to
file any claims or take any action or institute any proceedings that Secured
Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Secured Party with respect to
any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon
or threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in
its sole discretion, any such payments made by Secured Party to become
obligations of Grantor to Secured Party, due and payable immediately without
demand;
(f) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and other
documents relating to the Collateral; and
(g) upon the occurrence and during the continuation of an
Event of Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though Secured Party were the absolute owner thereof for all purposes, and
to do, at Secured Party's option and Grantor's expense, at any time or from
time to time, all acts and things that Secured Party deems necessary to
protect, preserve or realize upon the Collateral and Secured Party's security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as Grantor might do.
SECTION 15. SECURED PARTY MAY PERFORM. If Grantor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Grantor under Section 19.
SECTION 16. STANDARD OF CARE. The powers conferred on
Secured Party hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the exercise of reasonable care in the custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Secured Party shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property.
SECTION 17. REMEDIES. If any Event of Default shall have
occurred and be continuing, Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights
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and remedies of a secured party on default under the Uniform Commercial Code as
in effect in any relevant jurisdiction (the "CODE") (whether or not the Code
applies to the affected Collateral), and also may (a) require Grantor to, and
Grantor hereby agrees that it will at its expense and upon request of Secured
Party forthwith, assemble all or part of the Collateral as directed by Secured
Party and make it available to Secured Party at a place to be designated by
Secured Party that is reasonably convenient to both parties, (b) enter onto the
property where any Collateral is located and take possession thereof with or
without judicial process, (c) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (d) take possession of Grantor's premises or place custodians in
exclusive control thereof, remain on such premises and use the same and any of
Grantor's equipment for the purpose of completing any work in process, taking
any actions described in the preceding clause (c) and collecting any Secured
Obligation, and (e) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any of Secured Party's offices or elsewhere, for cash, on credit or
for future delivery, at such time or times and at such price or prices and upon
such other terms as Secured Party may deem commercially reasonable. Secured
Party or any Lender may be the purchaser of any or all of the Collateral at any
such sale and Secured Party, as agent for and representative of Lenders (but
not any Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing), shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Secured Obligations as a credit on account of the
purchase price for any Collateral payable by Secured Party at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from
any claim or right on the part of Grantor, and Grantor hereby waives (to the
extent permitted by applicable law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. Grantor agrees that, to
the extent notice of sale shall be required by law, at least ten days' notice
to 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. Secured
Party shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Grantor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Collateral to more than one
offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations, Grantor shall be liable
for the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency.
XXII-14
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SECTION 18. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of Secured Party, be held by
Secured Party as Collateral for, and/or then, or at any other time thereafter,
applied in full or in part by Secured Party against, the Secured Obligations in
the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in
connection therewith, and all amounts for which Secured Party is
entitled to indemnification hereunder and all advances made by Secured
Party hereunder for the account of Grantor, and to the payment of all
costs and expenses paid or incurred by Secured Party in connection
with the exercise of any right or remedy hereunder, all in accordance
with Section 19;
SECOND: To the payment of all other Secured Obligations in
such order as Secured Party shall elect; and
THIRD: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 19. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Secured Party and each
Lender from and against any and all claims, losses and liabilities in any way
relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
from Secured Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the
amount of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Grantor to perform or observe any of the provisions hereof.
SECTION 20. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Collateral
and shall (a) remain in full force and effect until the payment in full of the
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, (b) be binding
upon Grantor, its successors and assigns, and
XXII-15
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(c) inure, together with the rights and remedies of Secured Party hereunder, to
the benefit of Secured Party and its permitted successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 10.1 of the Credit Agreement, any
Lender may assign or otherwise transfer any Loans held by it to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Lenders herein or otherwise. Upon the
payment in full of all Secured Obligations, the cancellation or termination of
the Commitments and the cancellation or expiration of all outstanding Letters
of Credit, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to Grantor. Upon any such termination Secured
Party will, at Grantor's expense, execute and deliver to Grantor such documents
as Grantor shall reasonably request to evidence such termination.
SECTION 21. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders. Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
notice of resignation as Secured Party under this Agreement; removal of Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute
removal as Secured Party under this Agreement; and appointment of a successor
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
appointment of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Agent under subsection 9.5 of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Secured Party
hereunder.
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SECTION 22. AMENDMENTS; ETC. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by Grantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by Secured Party and, in the case of any such
amendment or modification, by Grantor. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
SECTION 23. NOTICES. Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex, or four Business
Days after depositing it in the United States mail with postage prepaid and
properly addressed. For the purposes hereof, the address of each party hereto
shall be as set forth under such party's name on the signature pages hereof or,
as to either party, such other address as shall be designated by such party in
a written notice delivered to the other party hereto.
SECTION 24. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 25. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 26. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 27. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
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PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement,
terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of
New York are used herein as therein defined.
SECTION 28. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Grantor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Grantor at its address provided in Section 23, such service being
hereby acknowledged by Grantor to be sufficient for personal jurisdiction in
any action against Grantor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Secured Party to bring proceedings against Grantor in the courts of any other
jurisdiction.
SECTION 29. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
LAW, GRANTOR AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.
Grantor and Secured Party each acknowledge that this waiver is a material
inducement for Grantor and Secured Party to enter into a business relationship,
that Grantor and Secured Party have already relied on this waiver in entering
into this Agreement and that each will continue to rely on this waiver in their
related future dealings. Grantor and Secured Party further warrant and
represent that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
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SECTION 30. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
[NAME OF GRANTOR]
By:
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Title:
----------------------
Notice Address:
BT COMMERCIAL CORPORATION
By:
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Title:
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Notice Address:
BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop #4032
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SCHEDULE I
TO SECURITY AGREEMENT
Supplemental Descriptions of Collateral
Specific Inventory Included in Collateral:
Assigned Agreements:
Deposit Accounts:
Trademark Registrations:
Copyright Registrations:
Patent Registrations:
331
SCHEDULE II
TO SECURITY AGREEMENT
Tradenames:
Locations of Equipment:
Locations of Inventory:
Filing Jurisdictions:
332
SCHEDULE III
TO SECURITY AGREEMENT
EXISTING FINANCING STATEMENTS
333
EXHIBIT XXIII
[FORM OF SUBSIDIARY PLEDGE AGREEMENT]
SUBSIDIARY PLEDGE AGREEMENT
This SUBSIDIARY PLEDGE AGREEMENT (this "AGREEMENT") is dated
as of November __, 1997 and entered into by and between [INSERT NAME OF PLEDGOR
IN CAPS], a ____________ corporation ("PLEDGOR"), and BT COMMERCIAL
CORPORATION, as agent for and representative of (in such capacity herein called
"SECURED PARTY") the financial institutions ("LENDERS") party to the Credit
Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Pledgor is the legal and beneficial owner of (i) the
shares of stock (the "PLEDGED SHARES") described in Part A of Schedule I
annexed hereto and issued by the corporations named therein and (ii) the
indebtedness (the "PLEDGED DEBT") described in Part B of said Schedule I and
issued by the obligors named therein.
B. Secured Party and Lenders have entered into a Credit
Agreement dated as of November __, 1997 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with FWT, Inc., a Texas
corporation ("COMPANY"), pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company.
C. Pledgor, together with the other Subsidiaries of
Company, have executed and delivered the Subsidiary Guaranty dated as of
November __, 1997 (said Subsidiary Guaranty, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "GUARANTY") in
favor of Secured Party for the benefit of Lenders, pursuant to which Pledgor
has guarantied the prompt payment and performance when due of all obligations
of Company under the Credit Agreement.
D. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Pledgor shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and other extensions of credit under the Credit
Agreement
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and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Pledgor hereby agrees with Secured Party as
follows:
SECTION 1. PLEDGE OF SECURITY. Pledgor hereby pledges to
Secured Party, and hereby grants to Secured Party a security interest in, all
of Pledgor's right, title and interest in and to the following (the "PLEDGED
COLLATERAL"):
(a) the Pledged Shares and the certificates representing
the Pledged Shares and any interest of Pledgor in the entries on the books of
any financial intermediary pertaining to the Pledged Shares, and all dividends,
cash, warrants, rights, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Shares;
(b) the Pledged Debt and the instruments evidencing the
Pledged Debt, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Debt;
(c) all additional shares of, and all securities
convertible into and warrants, options and other rights to purchase or
otherwise acquire, stock of any issuer of the Pledged Shares from time to time
acquired by Pledgor in any manner (which shares shall be deemed to be part of
the Pledged Shares), the certificates or other instruments representing such
additional shares, securities, warrants, options or other rights and any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to such additional shares, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such additional shares, securities, warrants, options or other rights;
(d) all additional indebtedness from time to time owed to
Pledgor by any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness;
(e) all shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire, stock
of any Person that, after the date of this Agreement, becomes, as a result of
any occurrence, a direct Subsidiary of Pledgor (which shares shall be deemed to
be part of the Pledged Shares), the certificates or other instruments
representing such shares, securities, warrants, options or other rights and any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to such shares, and all dividends, cash, warrants, rights,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares, securities, warrants, options or other rights;
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(f) all indebtedness from time to time owed to Pledgor by
any Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct or indirect Subsidiary of Pledgor, and all interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such indebtedness; and
(g) to the extent not covered by clauses (a) through (f)
above, all proceeds of any or all of the foregoing Pledged Collateral. For
purposes of this Agreement, the term "PROCEEDS" includes whatever is receivable
or received when Pledged Collateral or proceeds are sold, exchanged, collected
or otherwise disposed of, whether such disposition is voluntary or involuntary,
and includes, without limitation, proceeds of any indemnity or guaranty payable
to Pledgor or Secured Party from time to time with respect to any of the
Pledged Collateral.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Pledged Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Pledgor now or hereafter
existing under or arising out of or in connection with the Credit Agreement,
the Guaranty and the other Loan Documents, and all extensions or renewals
thereof, whether for principal, interest (including without limitation interest
that, but for the filing of a petition in bankruptcy with respect to Pledgor,
would accrue on such obligations), reimbursement of amounts drawn under Letters
of Credit, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender as a preference,
fraudulent transfer or otherwise (all such obligations and liabilities being
the "UNDERLYING DEBT"), and all obligations of every nature of Pledgor now or
hereafter existing under this Agreement (all such obligations of Pledgor,
together with the Underlying Debt, being the "SECURED OBLIGATIONS").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates
or instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and
shall be in suitable form for transfer by delivery or, as applicable, shall be
accompanied by Pledgor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Secured Party. Secured Party shall have the right, at any time
in its discretion and without notice to Pledgor, to transfer to or to register
in the name of Secured Party or any of its nominees any or all of the Pledged
Collateral, subject only to the revocable rights specified in Section 7(a). In
addition, Secured Party shall have the right at any time to exchange
certificates or instruments representing or evidencing
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Pledged Collateral for certificates or instruments of smaller or larger
denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor
represents and warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral. All
of the Pledged Shares have been duly authorized and validly issued and are
fully paid and non-assessable. All of the Pledged Debt has been duly
authorized, authenticated or issued, and delivered and is the legal, valid and
binding obligation of the issuers thereof (subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally and equitable principles relating to enforceability) and is
not in default.
(b) Description of Pledged Collateral. The Pledged
Shares constitute 100 percent of the issued and outstanding shares of stock of
each of the direct Subsidiaries of Pledgor, and there are no outstanding
warrants, options or other rights to purchase, or other agreements outstanding
with respect to, or property that is now or hereafter convertible into, or that
requires the issuance or sale of, any Pledged Shares. The Pledged Debt
constitutes all of the issued and outstanding intercompany indebtedness
evidenced by a promissory note of the respective issuers thereof owing to
Pledgor.
(c) Ownership of Pledged Collateral. Pledgor is the
legal, record and beneficial owner of the Pledged Collateral free and clear of
any Lien except for the security interest created by this Agreement.
(d) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the pledge by Pledgor
of the Pledged Collateral pursuant to this Agreement and the grant by Pledgor
of the security interest granted hereby, (ii) the execution, delivery or
performance of this Agreement by Pledgor, or (iii) the exercise by Secured
Party of the voting or other rights, or the remedies in respect of the Pledged
Collateral, provided for in this Agreement (except as may be required in
connection with a disposition of Pledged Collateral by laws affecting the
offering and sale of securities generally).
(e) Perfection. Assuming Secured Party's continued
possession of the certificates representing the Pledged Shares, the pledge of
the Pledged Collateral pursuant to this Agreement creates a valid and perfected
first priority security interest in the Pledged Collateral, securing the
payment of the Secured Obligations.
(f) Margin Regulations. The pledge of the Pledged
Collateral pursuant to this Agreement does not violate Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System.
XXIII-4
337
SECTION 5. TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED
COLLATERAL; ETC. Pledgor shall:
(a) not, except as expressly permitted by the Credit
Agreement, (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral,
(ii) create or suffer to exist any Lien upon or with respect to any of the
Pledged Collateral, except for the security interest under this Agreement, or
(iii) permit any issuer of Pledged Shares to merge or consolidate unless all
the outstanding capital stock of the surviving or resulting corporation is,
upon such merger or consolidation, pledged hereunder and no cash, securities or
other property is distributed in respect of the outstanding shares of any other
constituent corporation; provided that in the event Pledgor makes an Asset Sale
permitted by the Credit Agreement and the assets subject to such Asset Sale are
Pledged Shares, Secured Party shall release the Pledged Shares that are the
subject of such Asset Sale to Pledgor free and clear of the lien and security
interest under this Agreement concurrently with the consummation of such Asset
Sale; provided, further that, as a condition precedent to such release, Secured
Party shall have received evidence satisfactory to it that arrangements
satisfactory to it have been made for delivery to Secured Party of the Net Cash
Proceeds of such Asset Sale to the extent contemplated in the Credit Agreement;
(b) (i) cause each issuer of Pledged Shares that is a
Subsidiary of Pledgor not to issue any stock or other securities in addition to
or in substitution for the Pledged Shares issued by such issuer, except to
Pledgor, (ii) pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all additional shares of stock or other securities
of each issuer of Pledged Shares, and (iii) pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all shares of stock
issued to or otherwise acquired by Pledgor of any Person that, after the date
of this Agreement, becomes, as a result of any occurrence, a direct Subsidiary
of Pledgor;
(c) (i) pledge hereunder, immediately upon their
issuance, any and all instruments or other evidences of additional indebtedness
from time to time owed to Pledgor by any obligor on the Pledged Debt, and (ii)
pledge hereunder, immediately upon their issuance, any and all instruments or
other evidences of indebtedness from time to time owed to Pledgor by any Person
that after the date of this Agreement becomes, as a result of any occurrence, a
direct or indirect Subsidiary of Pledgor;
(d) promptly deliver to Secured Party all written notices
received by it as holder of the Pledged Collateral; and
(e) pay promptly when due all taxes, assessments and
governmental charges or levies imposed upon, and all claims against, the
Pledged Collateral, except to the extent the validity thereof is being
contested in good faith; provided that Pledgor shall in any event pay such
taxes, assessments, charges, levies or claims not later than five days prior to
the date of any proposed sale under any judgement, writ or warrant of
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338
attachment entered or filed against Pledgor or any of the Pledged Collateral as
a result of the failure to make such payment.
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.
(a) Pledgor agrees that from time to time, at the expense
of Pledgor, Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party
to exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral. Without limiting the generality of the foregoing, Pledgor
will: (i) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as Secured Party may reasonably request, in order to perfect
and preserve the security interests granted or purported to be granted hereby
and (ii) at Secured Party's request, appear in and defend any action or
proceeding that may affect Pledgor's title to or Secured Party's security
interest in all or any part of the Pledged Collateral.
(b) Pledgor further agrees that it will, upon obtaining
any additional shares of stock or other securities required to be pledged
hereunder as provided in Section 5(b) or (c), promptly (and in any event within
five Business Days) deliver to Secured Party a Pledge Amendment, duly executed
by Pledgor, in substantially the form of Schedule II annexed hereto (a "PLEDGE
AMENDMENT"), in respect of the additional Pledged Shares or Pledged Debt to be
pledged pursuant to this Agreement. Pledgor hereby authorizes Secured Party to
attach each Pledge Amendment to this Agreement and agrees that all Pledged
Shares or Pledged Debt listed on any Pledge Amendment delivered to Secured
Party shall for all purposes hereunder be considered Pledged Collateral;
provided that the failure of Pledgor to execute a Pledge Amendment with respect
to any additional Pledged Shares or Pledged Debt pledged pursuant to this
Agreement shall not impair the security interest of Secured Party therein or
otherwise adversely affect the rights and remedies of Secured Party hereunder
with respect thereto.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred
and be continuing:
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not inconsistent with
the terms of this Agreement or the Credit Agreement; provided,
however, that Pledgor shall not exercise or refrain from exercising
any such right if Secured Party shall have notified Pledgor that, in
Secured Party's judgment, such action would have a material adverse
effect on the value of the Pledged Collateral or any part thereof; and
provided, further, that Pledgor shall give Secured Party at least five
Business Days' prior written notice
XXIII-6
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of the manner in which it intends to exercise, or the reasons for
refraining from exercising, any such right. It is understood,
however, that neither (A) the voting by Pledgor of any Pledged Shares
for or Pledgor's consent to the election of directors at a regularly
scheduled annual or other meeting of stockholders (or by written
consent) or with respect to incidental matters at any such meeting nor
(B) Pledgor's consent to or approval of any action otherwise permitted
under this Agreement and the Credit Agreement shall be deemed
inconsistent with the terms of this Agreement or the Credit Agreement
within the meaning of this Section 7(a)(i), and no notice of any such
voting or consent need be given to Secured Party;
(ii) Pledgor shall be entitled to receive and retain, and
to utilize free and clear of the lien of this Agreement (but subject
to the provisions of the Credit Agreement), any and all dividends,
principal and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
(A) dividends, principal and interest paid or
payable other than in cash in respect of, and instruments and
other property received, receivable or otherwise distributed
in respect of, or in exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged Collateral in
connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus
or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed
in redemption of or in exchange for any Pledged Shares,
shall be, and shall forthwith be delivered to Secured Party to hold
as, Pledged Collateral and shall, if received by Pledgor, be received
in trust for the benefit of Secured Party, be segregated from the
other property or funds of Pledgor and be forthwith delivered to
Secured Party as Pledged Collateral in the same form as so received
(with all necessary indorsements); and
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies,
dividend payment orders and other instruments as Pledgor may from time
to time reasonably request for the purpose of enabling Pledgor to
exercise the voting and other consensual rights which it is entitled
to exercise pursuant to paragraph (i) above and to receive the
dividends, principal or interest payments which it is authorized to
receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuation of an
Event of Default:
XXIII-7
340
(i) upon written notice from Secured Party to Pledgor,
all rights of Pledgor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to
Section 7(a)(i) shall cease, and all such rights shall thereupon
become vested in Secured Party who shall thereupon have the sole right
to exercise such voting and other consensual rights;
(ii) all rights of Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to receive
and retain pursuant to Section 7(a)(ii) shall cease, and all such
rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to receive and hold as Pledged
Collateral such dividends and interest payments; and
(iii) all dividends, principal and interest payments which
are received by Pledgor contrary to the provisions of paragraph (ii)
of this Section 7(b) shall be received in trust for the benefit of
Secured Party, shall be segregated from other funds of Pledgor and
shall forthwith be paid over to Secured Party as Pledged Collateral in
the same form as so received (with any necessary indorsements).
(c) In order to permit Secured Party to exercise the
voting and other consensual rights which it may be entitled to exercise
pursuant to Section 7(b)(i) and to receive all dividends and other
distributions which it may be entitled to receive under Section 7(a)(ii) or
Section 7(b)(ii), (i) Pledgor shall promptly execute and deliver (or cause to
be executed and delivered) to Secured Party all such proxies, dividend payment
orders and other instruments as Secured Party may from time to time reasonably
request and (ii) without limiting the effect of the immediately preceding
clause (i), Pledgor hereby grants to Secured Party an irrevocable proxy to vote
the Pledged Shares and to exercise all other rights, powers, privileges and
remedies to which a holder of the Pledged Shares would be entitled (including,
without limitation, giving or withholding written consents of shareholders,
calling special meetings of shareholders and voting at such meetings), which
proxy shall be effective, automatically and without the necessity of any action
(including any transfer of any Pledged Shares on the record books of the issuer
thereof) by any other Person (including the issuer of the Pledged Shares or any
officer or agent thereof), upon the occurrence of an Event of Default and which
proxy shall only terminate upon the payment in full of the Secured Obligations.
SECTION 8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Pledgor
hereby irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with
full authority in the place and stead of Pledgor and in the name of Pledgor,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including
without limitation:
(a) to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part of the Pledged
Collateral without the signature of Pledgor (to the extent permitted by
applicable law);
XXIII-8
341
(b) during the continuance of any Event of Default, to
ask, demand, collect, ▇▇▇ for, recover, compound, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Pledged Collateral;
(c) during the continuance of any Event of Default, to
receive, endorse and collect any instruments made payable to Pledgor
representing any dividend, principal or interest payment or other distribution
in respect of the Pledged Collateral or any part thereof and to give full
discharge for the same; and
(d) during the continuance of any Event of Default, to
file any claims or take any action or institute any proceedings that Secured
Party may deem necessary or desirable for the collection of any of the Pledged
Collateral or otherwise to enforce the rights of Secured Party with respect to
any of the Pledged Collateral.
SECTION 9. SECURED PARTY MAY PERFORM. If Pledgor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Pledgor under Section
13(b).
SECTION 10. STANDARD OF CARE. The powers conferred on
Secured Party hereunder are solely to protect its interest in the Pledged
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the exercise of reasonable care in the custody of any Pledged
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Secured Party shall have no duty as to any Pledged Collateral, it
being understood that Secured Party shall have no responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged Collateral,
whether or not Secured Party has or is deemed to have knowledge of such
matters, (b) taking any necessary steps (other than steps taken in accordance
with the standard of care set forth above to maintain possession of the Pledged
Collateral) to preserve rights against any parties with respect to any Pledged
Collateral, (c) taking any necessary steps to collect or realize upon the
Secured Obligations or any guarantee therefor, or any part thereof, or any of
the Pledged Collateral, or (d) initiating any action to protect the Pledged
Collateral against the possibility of a decline in market value. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Pledged Collateral in its possession if such Pledged Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property consisting of negotiable securities.
SECTION 11. REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Pledged Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected
XXIII-9
342
Pledged Collateral), and Secured Party may also in its sole discretion, without
notice except as specified below, sell the Pledged Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange or
broker's board or at any of Secured Party's offices or elsewhere, for cash, on
credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as Secured Party may deem commercially
reasonable, irrespective of the impact of any such sales on the market price of
the Pledged Collateral. Secured Party or any Lender may be the purchaser of
any or all of the Pledged Collateral at any such sale and Secured Party, as
agent for and representative of Lenders (but not any Lender or Lenders in its
or their respective individual capacities unless Requisite Lenders shall
otherwise agree in writing), shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of
the Pledged Collateral sold at any such public sale, to use and apply any of
the Secured Obligations as a credit on account of the purchase price for any
Pledged Collateral payable by Secured Party at such sale. Each purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of Pledgor, and Pledgor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten days' notice to Pledgor
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. Secured Party
shall not be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Pledgor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Pledged Collateral to more
than one offeree. If the proceeds of any sale or other disposition of the
Pledged Collateral are insufficient to pay all the Secured Obligations, Pledgor
shall be liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as from time to time
amended (the "SECURITIES ACT"), and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of the
Pledged Collateral conducted without prior registration or qualification of
such Pledged Collateral under the Securities Act and/or such state securities
laws, to limit purchasers to those who will agree, among other things, to
acquire the Pledged Collateral for their own account, for investment and not
with a view to the distribution or resale thereof. Pledgor acknowledges that
any such private sales may be at prices and on terms less favorable than those
obtainable through a public sale without such restrictions (including, without
limitation, a public offering made pursuant to a registration statement under
the Securities Act) and Pledgor agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that
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Secured Party shall have no obligation to engage in public sales and no
obligation to delay the sale of any Pledged Collateral for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so register it.
(c) If Secured Party determines to exercise its right to
sell any or all of the Pledged Collateral, upon written request, Pledgor shall
and shall cause each issuer (which is a Subsidiary of Pledgor) of any Pledged
Shares to be sold hereunder from time to time to furnish to Secured Party all
such information as Secured Party may request in order to determine the number
of shares and other instruments included in the Pledged Collateral which may be
sold by Secured Party in exempt transactions under the Securities Act and the
rules and regulations of the Securities and Exchange Commission thereunder, as
the same are from time to time in effect.
SECTION 12. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Pledged Collateral may, in the discretion of Secured Party, be held
by Secured Party as Pledged Collateral for, and/or then, or at any time
thereafter, applied in full or in part by Secured Party against, the Secured
Obligations in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in
connection therewith, and all amounts for which Secured Party is
entitled to indemnification hereunder and all advances made by Secured
Party hereunder for the account of Pledgor, and to the payment of all
costs and expenses paid or incurred by Secured Party in connection
with the exercise of any right or remedy hereunder, all in accordance
with Section 13;
SECOND: To the payment of all other Secured Obligations in
such order as Secured Party shall elect; and
THIRD: To the payment to or upon the order of Pledgor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 13. INDEMNITY AND EXPENSES.
(a) Pledgor agrees to indemnify Secured Party and each
Lender from and against any and all claims, losses and liabilities in any way
relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims,
XXIII-11
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losses or liabilities result from Secured Party's or such Lender's gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction.
(b) Pledgor shall pay to Secured Party upon demand the
amount of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Pledgor to perform or observe any of the provisions hereof.
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (a) remain in full force and effect until the payment in
full of all Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Pledgor, its successors and assigns, and (c) inure,
together with the rights and remedies of Secured Party hereunder, to the
benefit of Secured Party and its successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), but subject to the
provisions of subsection 10.1 of the Credit Agreement, any Lender may assign or
otherwise transfer any Loans held by it to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to Lenders herein or otherwise. Upon the payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Pledged
Collateral shall revert to Pledgor. Upon any such termination Secured Party
will, at Pledgor's expense, execute and deliver to Pledgor such documents as
Pledgor shall reasonably request to evidence such termination and Pledgor shall
be entitled to the return, upon its request and at its expense, against receipt
and without recourse to Secured Party, of such of the Pledged Collateral as
shall not have been sold or otherwise applied pursuant to the terms hereof.
SECTION 15. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders. Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Pledged
Collateral), solely in accordance with this Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
notice of resignation as Secured Party under this Agreement; removal of Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute
removal as Secured Party under this Agreement;
XXIII-12
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and appointment of a successor Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute appointment of a successor Secured Party under
this Agreement. Upon the acceptance of any appointment as Agent under
subsection 9.5 of the Credit Agreement by a successor Agent, that successor
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Secured Party under this
Agreement, and the retiring or removed Secured Party under this Agreement shall
promptly (i) transfer to such successor Secured Party all sums, securities and
other items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and (ii) execute
and deliver to such successor Secured Party such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Secured Party of the security
interests created hereunder, whereupon such retiring or removed Secured Party
shall be discharged from its duties and obligations under this Agreement.
After any retiring or removed Agent's resignation or removal hereunder as
Secured Party, the provisions of this Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Agreement while it
was Secured Party hereunder.
SECTION 16. AMENDMENTS; ETC. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by Pledgor therefrom, shall in any event be effective unless the same
shall be in writing and signed by Secured Party and, in the case of any such
amendment or modification, by Pledgor. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
SECTION 17. NOTICES. Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex, or four Business
Days after depositing it in the United States mail with postage prepaid and
properly addressed. For the purposes hereof, the address of each party hereto
shall be as set forth under such party's name on the signature pages hereof or,
as to either party, such other address as shall be designated by such party in
a written notice delivered to the other party hereto.
SECTION 18. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
XXIII-13
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SECTION 19. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 20. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 21. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the Credit
Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code in the
State of New York are used herein as therein defined.
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Pledgor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Pledgor at its address provided in Section 17, such service being
hereby acknowledged by Pledgor to be sufficient for personal jurisdiction in
any action against Pledgor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Secured Party to bring proceedings against Pledgor in the courts of any other
jurisdiction.
SECTION 23. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, PLEDGOR AND SECURED PARTY HEREBY AGREE
XXIII-14
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TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Pledgor and Secured Party each
acknowledge that this waiver is a material inducement for Pledgor and Secured
Party to enter into a business relationship, that Pledgor and Secured Party
have already relied on this waiver in entering into this Agreement and that
each will continue to rely on this waiver in their related future dealings.
Pledgor and Secured Party further warrant and represent that each has reviewed
this waiver with its legal counsel, and that each knowingly and voluntarily
waives its jury trial rights following consultation with legal counsel. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
SECTION 24. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
XXIII-15
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IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
[NAME OF PLEDGOR]
By:
----------------------------------
Title:
----------------------------
Notice Address:
----------------------
----------------------
----------------------
BT COMMERCIAL CORPORATION
By:
----------------------------------
Title:
----------------------------
Notice Address:
BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop #4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Bhartai Baliga
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349
SCHEDULE I
Attached to and forming a part of the Subsidiary Pledge
Agreement dated as of November __, 1997 between _______________, as Pledgor,
and BT Commercial Corporation, as Secured Party.
Part A
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
------------ -------- ------------ ----- ---------
Part B
Debt Issuer Amount of Indebtedness
----------- ----------------------
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350
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________, 19__, is delivered
pursuant to Section 6(b) of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Subsidiary Pledge Agreement dated November __, 1997, between the undersigned
and BT Commercial Corporation, as Secured Party (the "PLEDGE AGREEMENT,"
capitalized terms defined therein being used herein as therein defined), and
that the [Pledged Shares] [Pledged Debt] listed on this Pledge Amendment shall
be deemed to be part of the [Pledged Shares] [Pledged Debt] and shall become
part of the Pledged Collateral and shall secure all Secured Obligations.
[NAME OF PLEDGOR]
By:
--------------------------------
Title:
--------------------------
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
------------ -------- ------------ ----- ---------
Debt Issuer Amount of Indebtedness
----------- ----------------------
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EXHIBIT XXIV
[FORM OF SUBSIDIARY TRADEMARK SECURITY AGREEMENT]
SUBSIDIARY TRADEMARK COLLATERAL SECURITY AGREEMENT
This SUBSIDIARY TRADEMARK COLLATERAL SECURITY AGREEMENT (this
"AGREEMENT") is dated as of November ___, 1997 and entered into by and between
[NAME OF ASSIGNOR], a ______________ corporation ("GRANTOR"), and BT COMMERCIAL
CORPORATION, as agent for and representative of (in such capacity herein called
"SECURED PARTY") the financial institutions ("LENDERS") party to the Credit
Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Secured Party and Lenders have entered into a Credit
Agreement dated as of November ___, 1997 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with FWT, INC., a Texas
corporation ("COMPANY") pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company.
B. Grantor owns and uses in its business, and will in
the future adopt and so use, various intangible assets, including trademarks,
service marks, designs, logos, indicia, tradenames, corporate names, company
names, business names, fictitious business names, trade styles and/or other
source and/or business identifiers and applications pertaining thereto
(collectively, the "TRADEMARKS").
C. Secured Party desires Grantor to assign and grant to
it a lien on and security interest in all of Grantor's existing and future
Trademarks, all registrations that have been or may hereafter be issued or
applied for thereon in the United States and any state thereof and in foreign
countries (the "REGISTRATIONS"), all common law and other rights in and to the
Trademarks in the United States and any state thereof and in foreign countries
(the "TRADEMARK RIGHTS"), all goodwill of Grantor's business symbolized by the
Trademarks and associated therewith, including without limitation the documents
and things described in Section 1(b) (the "ASSOCIATED GOODWILL"), and all
proceeds of the Trademarks, the Registrations, the Trademark Rights and the
Associated Goodwill, and Grantor agrees to assign and grant to Secured Party a
secured and protected interest in the Trademarks, the Registrations, the
Trademark Rights, the Associated Goodwill and all the proceeds thereof as
provided herein.
D. Grantor has executed and delivered (i) the Subsidiary
Guaranty dated as of ______________ ___, _____ (said Subsidiary Guaranty, as it
may hereafter be
XXIV-1
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amended, supplemented or otherwise modified from time to time, being the
"GUARANTY") in favor of Secured Party for the benefit of Lenders, pursuant to
which Grantor has guaranteed the prompt payment and performance when due of all
Obligations of the Company under the Credit Agreement and (ii) the Subsidiary
Security Agreement dated as of _______________ __, 1997 (the "SUBSIDIARY
SECURITY AGREEMENT") between Grantor and Secured Party for the benefit of
Lenders, pursuant to which Grantor has granted Secured Party a security
interest in all of its personal property, including, without limitation, the
Collateral, as defined below, which Subsidiary Security Agreement is to be
supplemented by this Agreement.
E. Pursuant to the Subsidiary Security Agreement,
Grantor has assigned and granted to Secured Party a lien on and security
interest in, among other assets, all of Grantor's equipment, inventory,
accounts and general intangibles relating to the products and services sold or
delivered under or in connection with the Trademarks such that, upon the
occurrence and during the continuation of an Event of Default, Secured Party
would be able to exercise its remedies consistent with the Subsidiary Security
Agreement, this Agreement and applicable law to foreclose upon Grantor's
business and use the Trademarks, the Registrations and the Trademark Rights in
conjunction with the continued operation of such business, maintaining
substantially the same product and service specifications and quality as
maintained by Grantor, and benefit from the Associated Goodwill.
F. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Grantor shall have
assigned and granted the security interests and undertaken the obligations
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Secured
Party as follows:
SECTION 1. ASSIGNMENT AND GRANT OF SECURITY. Grantor hereby
assigns to Secured Party, and hereby grants to Secured Party a security
interest in, all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be located
(the "COLLATERAL"):
(a) each of the Trademarks and rights and interests in
Trademarks that are presently, or in the future may be, owned, held (whether
pursuant to a license or otherwise) or used by Grantor, in whole or in part
(including, without limitation, the Trademarks specifically identified in
Schedule A annexed hereto, as the same may be amended pursuant hereto from time
to time), and including all Trademark Rights with respect thereto and all
federal, state and foreign Registrations therefor heretofore or hereafter
granted or applied for, the right (but not the obligation) to register claims
under any state or federal trademark law or regulation or any trademark law or
regulation of any foreign country and to apply for, renew and extend the
Trademarks, Registrations and Trademark Rights, the right (but not the
obligation) to ▇▇▇ or bring opposition or cancellation proceedings in the name
of Grantor or
XXIV-2
353
in the name of Secured Party or otherwise for past, present and future
infringements of the Trademarks, Registrations or Trademark Rights and all
rights (but not obligations) corresponding thereto in the United States and any
foreign country, and the Associated Goodwill; it being understood that the
rights and interests included herein shall include, without limitation, all
rights and interests pursuant to licensing or other contracts in favor of
Grantor pertaining to any Trademarks, Registrations or Trademark Rights
presently or in the future owned, held or used by third parties but, in the
case of third parties which are not Affiliates of Grantor, only to the extent
permitted by such licensing or other contracts or otherwise permitted by
applicable law and, if not so permitted under any such contracts and applicable
law, only with the consent of such third parties;
(b) the following documents and things in Grantor's
possession, or subject to Grantor's right to possession, related to (Y) the
production, sale and delivery by Grantor, or by any Affiliate, licensee or
subcontractor of Grantor, of products or services sold or delivered by or under
the authority of Grantor in connection with the Trademarks, Registrations or
Trademark Rights (which products and services shall, for purposes of this
Agreement, be deemed to include, without limitation, products and services sold
or delivered pursuant to merchandising operations utilizing any Trademarks,
Registrations or Trademark Rights); or (Z) any retail or other merchandising
operations conducted under the name of or in connection with the Trademarks,
Registrations or Trademark Rights by Grantor or any Affiliate, licensee or
subcontractor of Grantor:
(i) all lists and ancillary documents that
identify and describe any of Grantor's customers, or those of its
Affiliates, licensees or subcontractors, for products sold and
services delivered under or in connection with the Trademarks or
Trademark Rights, including without limitation any lists and ancillary
documents that contain a customer's name and address, the name and
address of any of its warehouses, branches or other places of
business, the identity of the Person or Persons having the principal
responsibility on a customer's behalf for ordering products or
services of the kind supplied by Grantor, or the credit, payment,
discount, delivery or other sale terms applicable to such customer,
together with information setting forth the total purchases, by brand,
product, service, style, size or other criteria, and the patterns of
such purchases;
(ii) all product and service specification
documents and production and quality control manuals used in the
manufacture or delivery of products and services sold or delivered
under or in connection with the Trademarks or Trademark Rights;
(iii) all documents which reveal the name and
address of any source of supply, and any terms of purchase and
delivery, for any and all materials, components and services used in
the production of products and services sold or delivered under or in
connection with the Trademarks or Trademark Rights; and
XXIV-3
354
(iv) all documents constituting or concerning the
then current or proposed advertising and promotion by Grantor or its
Affiliates, licensees or subcontractors of products and services sold
or delivered under or in connection with the Trademarks or Trademark
Rights including, without limitation, all documents which reveal the
media used or to be used and the cost for all such advertising
conducted within the described period or planned for such products and
services;
(c) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon;
(d) to the extent not included in the foregoing clauses
(a) - (c), all general intangibles relating to the Collateral; and
(e) all proceeds, products, rents and profits (including
without limitation license royalties and proceeds of infringement suits) of or
from any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "PROCEEDS" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Grantor now or hereafter
existing under or arising out of or in connection with the Credit Agreement,
the Guaranty and the other Loan Documents and all extensions or renewals
thereof, whether for principal, interest (including without limitation interest
that, but for the filing of a petition in bankruptcy with respect to Grantor,
would accrue on such obligations), reimbursement of amounts drawn under Letters
of Credit, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender as a preference,
fraudulent transfer or otherwise (all such obligations and liabilities being
the "UNDERLYING DEBT"), and all obligations of every nature of Grantor now or
hereafter existing under this Agreement (all such obligations of Grantor,
together with the Underlying Debt, being the "SECURED OBLIGATIONS").
XXIV-4
355
SECTION 3. GRANTOR REMAINS LIABLE. Anything contained herein
to the contrary notwithstanding, (a) Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Party of any of its rights hereunder shall not release Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or liability
under any contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Grantor
represents and warrants as follows:
(a) Description of Collateral. A true and complete list
of all Trademarks, Registrations and Trademark Rights owned, held (whether
pursuant to a license or otherwise) or used by Grantor, in whole or in part, as
of the date of this Agreement is set forth in Schedule A annexed hereto. Each
Trademark, Registration or Trademark Right designated on Schedule A annexed
hereto as a Material Trademark Property, and each other Trademark, Registration
or Trademark Right hereafter arising or otherwise owned, held or used by
Grantor that is subsequently so designated, is referred to herein as a
"MATERIAL TRADEMARK PROPERTY".
(b) Validity and Enforceability of Collateral. Each
Material Trademark Property is valid, subsisting and enforceable. As of the
Closing Date, Grantor is not aware of any pending or threatened claim by any
third party that any Material Trademark Property is invalid or unenforceable or
that the use of any Material Trademark Property violates the rights of any
third person or of any basis for any such claim, and there is no such pending
or threatened claim, whether arising prior to or after the Closing Date, that
could reasonably be expected to have a Material Adverse Effect.
(c) Ownership of Collateral. Except for the interests
disclosed in Schedule B annexed hereto and the security interest assigned and
created by this Agreement, Grantor is the sole legal and beneficial owner of
the entire right, title and interest in and to each Material Trademark
Property, free and clear of any Lien other than the interests disclosed in
Schedule B annexed hereto and Liens of mechanics, materialmen, attorneys and
other similar liens imposed by law in the ordinary course of business in
connection with the establishment, creation or application for Registration of
any Trademarks, Registrations or Trademark Rights for sums not yet delinquent
or being contested in good faith (such Liens being referred to herein as
"PERMITTED TRADEMARK LIENS"). Except with respect to the interests disclosed
in Schedule B annexed hereto and such as may have been filed in favor of
Secured Party relating to this Agreement, no effective financing statement or
other instrument similar in effect covering all or any part of the Collateral
is on file in any filing or recording office, including the United States
Patent and Trademark Office.
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356
(d) Office Locations; Other Names. The chief place of
business, the chief executive office and the office where Grantor keeps its
records regarding the Collateral is, and has been for the four month period
preceding the date hereof, located at ___________________________________.
Grantor has not in the past done, and does not now do, business under any other
name (including any trade-name or fictitious business name).
(e) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the assignment and
grant by Grantor of the security interest created hereby, (ii) the execution,
delivery or performance of this Agreement by Grantor, or (iii) the perfection
or exercise by Secured Party of its rights and remedies hereunder (except as
may have been taken by or at the direction of Grantor).
(f) Perfection. This Agreement, together with the filing
of a financing statement describing the Collateral with the Secretary of State
of the State of Texas and the recording of this Agreement with the United
States Patent and Trademark Office, assigns and creates a valid, perfected and,
except for the interests disclosed in Schedule B annexed hereto, first priority
security interest in the Collateral (subject only to Permitted Trademark
Liens), securing the payment of the Secured Obligations, and all filings and
other actions necessary or desirable to perfect and protect such security
interest have been duly made or taken.
(g) Other Information. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of Grantor with
respect to the Collateral is accurate and complete in all respects.
SECTION 5. FURTHER ASSURANCES; NEW TRADEMARKS, REGISTRATIONS
AND TRADEMARK RIGHTS; CERTAIN INSPECTION RIGHTS.
(a) Grantor agrees that from time to time, at the expense
of Grantor, Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest assigned or granted or purported to be assigned or granted hereby or
to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of
the foregoing, Grantor will: (i) at the request of Secured Party, ▇▇▇▇
conspicuously each of its records pertaining to the Collateral with a legend,
in form and substance satisfactory to Secured Party, indicating that such
Collateral is subject to the security interest granted hereby, (ii) execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as Secured
Party may request, in order to perfect and preserve the security interests
granted or purported to be granted hereby, (iii) use its best efforts to obtain
any necessary consents of third parties to the assignment and perfection of a
security interest to Secured Party with respect to any Collateral, (iv) at any
reasonable time, upon request by Secured Party, exhibit
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the Collateral to and allow inspection of the Collateral by Secured Party, or
persons designated by Secured Party, and (v) at Secured Party's request, appear
in and defend any action or proceeding that may affect Grantor's title to or
Secured Party's security interest in all or any part of the Collateral.
(b) Grantor hereby authorizes Secured Party to file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of Grantor. Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or
of a financing statement signed by Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Grantor hereby authorizes Secured Party to modify
this Agreement without obtaining Grantor's approval of or signature to such
modification by amending Schedule A annexed hereto to include reference to any
right, title or interest in any existing Trademark, Registration or Trademark
Right or any Trademark, Registration or Trademark Right acquired or developed
by Grantor after the execution hereof or to delete any reference to any right,
title or interest in any Trademark, Registration or Trademark Right in which
Grantor no longer has or claims any right, title or interest.
(d) Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
(e) If Grantor shall obtain rights to any new Trademarks,
Registrations or Trademark Rights, the provisions of this Agreement shall
automatically apply thereto. Grantor shall promptly notify Secured Party in
writing of any rights to any new Trademarks or Trademark Rights acquired by
Grantor after the date hereof and of any Registrations issued or applications
for Registration made after the date hereof, which notice shall state whether
such Trademark, Registration or Trademark Right constitutes a Material
Trademark Property. Concurrently with the filing of an application for
Registration for any Trademark, Grantor shall execute, deliver and record in
all places where this Agreement is recorded an appropriate Trademark Security
Agreement, substantially in the form hereof, with appropriate insertions, or an
amendment to this Agreement, in form and substance satisfactory to Secured
Party, pursuant to which Grantor shall assign and grant a security interest to
the extent of its interest in such Registration as provided herein to Secured
Party unless so doing would, in the reasonable judgment of Grantor, after due
inquiry, result in the grant of a Registration in the name of Secured Party, in
which event Grantor shall give written notice to Secured Party as soon as
reasonably practicable and the filing shall instead be undertaken as soon as
practicable but in no case later than immediately following the grant of the
Registration.
(f) Grantor hereby grants to Secured Party and its
employees, representatives and agents the right to visit Grantor's and any of
its Affiliate's or subcontractor's plants, facilities and other places of
business that are utilized in connection
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with the manufacture, production, inspection, storage or sale of products and
services sold or delivered under any of the Trademarks, Registrations or
Trademark Rights (or which were so utilized during the prior six month period),
and to inspect the quality control and all other records relating thereto upon
reasonable notice to Grantor and as often as may be reasonably requested.
SECTION 6. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
(a) not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering the
Collateral;
(b) notify Secured Party of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of
any change in Grantor's chief place of business or chief executive office or
the office where Grantor keeps its records regarding the Collateral;
(d) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Collateral,
except to the extent the validity thereof is being contested in good faith;
provided that Grantor shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to the date of any proposed
sale under any judgement, writ or warrant of attachment entered or filed
against Grantor or any of the Collateral as a result of the failure to make
such payment;
(e) not sell, assign (by operation of law or otherwise)
or otherwise dispose of any of the Collateral except as permitted by the Credit
Agreement;
(f) except for the interests disclosed in Schedule B
annexed hereto, Permitted Trademark Liens and the security interest assigned
and created by this Agreement, not create or suffer to exist any Lien upon or
with respect to any of the Collateral to secure the indebtedness or other
obligations of any Person;
(g) diligently keep reasonable records respecting the
Collateral and at all times keep at least one complete set of its records
concerning substantially all of the Trademarks, Registrations and Trademark
Rights at its chief executive office or principal place of business;
(h) not permit the inclusion in any contract to which it
becomes a party of any provision that could or might in any way conflict with
this Agreement or impair or prevent the assignment and creation of a security
interest in Grantor's rights and interests in any property included within the
definitions of any Trademarks, Registrations, Trademark Rights and Associated
Goodwill;
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(i) take all steps necessary to protect the secrecy of
all trade secrets relating to the products and services sold or delivered under
or in connection with the Trademarks and Trademark Rights, including without
limitation entering into confidentiality agreements with employees and labeling
and restricting access to secret information and documents;
(j) use proper statutory notice in connection with its
use of each Material Trademark Property to the extent reasonably necessary for
the protection of such Material Trademark Property;
(k) use consistent standards of high quality (which may
be consistent with Grantor's past practices) in the manufacture, sale and
delivery of products and services sold or delivered under or in connection with
the Trademarks, Registrations and Trademark Rights, including, to the extent
applicable, in the operation and maintenance of its merchandising operations;
and
(l) upon any officer of Grantor obtaining knowledge
thereof, promptly notify Secured Party in writing of any event that may
materially and adversely affect the value of the Collateral or any portion
thereof, the ability of Grantor or Secured Party to dispose of the Collateral
or any portion thereof, or the rights and remedies of Secured Party in relation
thereto, including without limitation the levy of any legal process against the
Collateral or any portion thereof.
SECTION 7. AMOUNTS PAYABLE IN RESPECT OF THE COLLATERAL.
Except as otherwise provided in this Section 7, Grantor shall continue to
collect, at its own expense, all amounts due or to become due to Grantor in
respect of the Collateral or any portion thereof. In connection with such
collections, Grantor may take (and, at Secured Party's direction, shall take)
such action as Grantor or Secured Party may deem necessary or advisable to
enforce collection of such amounts; provided, however, that Secured Party shall
have the right at any time, upon the occurrence and during the continuation of
an Event of Default or a Potential Event of Default and upon written notice to
Grantor of its intention to do so, to notify the obligors with respect to any
such amounts of the existence of the security interest assigned and created
hereby, and to direct such obligors to make payment of all such amounts
directly to Secured Party, and, upon such notification and at the expense of
Grantor, to enforce collection of any such amounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as Grantor might have done. After receipt by Grantor of the notice from
Secured Party referred to in the proviso to the preceding sentence, (i) all
amounts and proceeds (including checks and other instruments) received by
Grantor in respect of amounts due to Grantor in respect of the Collateral or
any portion thereof shall be received in trust for the benefit of Secured Party
hereunder, shall be segregated from other funds of Grantor and shall be
forthwith paid over or delivered to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 14, and (ii) Grantor shall not adjust, settle or
compromise the amount or payment of any such amount or release wholly or partly
any obligor with respect thereto or allow any credit or discount thereon.
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SECTION 8. TRADEMARK APPLICATIONS AND LITIGATION.
(a) Grantor shall have the duty diligently, through
counsel reasonably acceptable to Secured Party, to prosecute any trademark
application relating to any Material Trademark Property that is pending as of
the date of this Agreement, to make federal application on any existing or
future registerable but unregistered Material Trademark Property (whenever it
is commercially reasonable in the reasonable judgment of Grantor to do so), and
to file and prosecute opposition and cancellation proceedings, renew
Registrations and do any and all acts which are necessary or desirable to
preserve and maintain all rights in all Material Trademark Properties. Any
expenses incurred in connection therewith shall be borne solely by Grantor.
Grantor shall not abandon any Material Trademark Property.
(b) Except as provided in Section 8(d), Grantor shall
have the right to commence and prosecute in its own name, as real party in
interest, for its own benefit and at its own expense, such suits, proceedings
or other actions for infringement, unfair competition, dilution or other damage
as are in its reasonable business judgment necessary to protect the Collateral.
Secured Party shall provide, at Grantor's expense, all reasonable and necessary
cooperation in connection with any such suit, proceeding or action including,
without limitation, joining as a necessary party.
(c) Grantor shall promptly, following its becoming aware
thereof, notify Secured Party of the institution of, or of any adverse
determination in, any proceeding (whether in the United States Patent and
Trademark Office or any federal, state, local or foreign court) described in
Section 8(a) or 8(b) or regarding Grantor's claim of ownership in or right to
use any of the Trademarks, Registrations or Trademark Rights, its right to
register the same, or its right to keep and maintain such Registration.
Grantor shall provide to Secured Party any information with respect thereto
requested by Secured Party.
(d) Anything contained herein to the contrary
notwithstanding, upon the occurrence and during the continuation of an Event of
Default, Secured Party shall have the right (but not the obligation) to bring
suit, in the name of Grantor, Secured Party or otherwise, to enforce any
Trademark, Registration, Trademark Right, Associated Goodwill and any license
thereunder, in which event Grantor shall, at the request of Secured Party, do
any and all lawful acts and execute any and all documents required by Secured
Party in aid of such enforcement and Grantor shall promptly, upon demand,
reimburse and indemnify Secured Party as provided in Section 15 in connection
with the exercise of its rights under this Section 8. To the extent that
Secured Party shall elect not to bring suit to enforce any Trademark,
Registration, Trademark Right, Associated Goodwill or any license thereunder as
provided in this Section 8(d), Grantor agrees to use all reasonable measures,
whether by action, suit, proceeding or otherwise, to prevent the infringement
of any of the Trademarks, Registrations, Trademark Rights or Associated
Goodwill by others and for that purpose agrees to diligently maintain any
action, suit or proceeding against any Person so infringing necessary to
prevent such infringement.
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SECTION 9. NON-DISTURBANCE AGREEMENTS, ETC. If and to the
extent that Grantor is permitted to license the Collateral, Secured Party shall
enter into a non-disturbance agreement or other similar arrangement, at
Grantor's request and expense, with Grantor and any licensee of any Collateral
permitted hereunder in form and substance satisfactory to Secured Party
pursuant to which (a) Secured Party shall agree not to disturb or interfere
with such licensee's rights under its license agreement with Grantor so long as
such licensee is not in default thereunder and (b) such licensee shall
acknowledge and agree that the Collateral licensed to it is subject to the
security interest assigned and created in favor of Secured Party and the other
terms of this Agreement.
SECTION 10. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Grantor hereby irrevocably appoints Secured Party as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of
this Agreement, including without limitation:
(a) to endorse Grantor's name on all applications,
documents, papers and instruments necessary for Secured Party in the use or
maintenance of the Collateral;
(b) to ask for, demand, collect, ▇▇▇ for, recover,
compound, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;
(d) to file any claims or take any action or institute
any proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon
or threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in
its sole discretion, any such payments made by Secured Party to become
obligations of Grantor to Secured Party, due and payable immediately without
demand; and
(f) upon the occurrence and during the continuation of an
Event of Default, (i) to execute and deliver any of the assignments or
documents requested by Secured Party pursuant to Section 13(b), (ii) to grant
or issue an exclusive or non-exclusive license to the Collateral or any portion
thereof to any Person, and (iii) otherwise generally to sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though Secured Party were the absolute owner thereof
for all purposes, and to do, at Secured Party's option and Grantor's expense,
at any time or from
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time to time, all acts and things that Secured Party deems necessary to
protect, preserve or realize upon the Collateral and Secured Party's security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as Grantor might do.
SECTION 11. SECURED PARTY MAY PERFORM. If Grantor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Grantor under Section 15.
SECTION 12. STANDARD OF CARE. The powers conferred on
Secured Party hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the exercise of reasonable care in the custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Secured Party shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property.
SECTION 13. REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "CODE") (whether or not the Code applies to the affected
Collateral), and also may (i) require Grantor to, and Grantor hereby agrees
that it will at its expense and upon request of Secured Party forthwith,
assemble all or part of the Collateral as directed by Secured Party and make it
available to Secured Party at a place to be designated by Secured Party that is
reasonably convenient to both parties, (ii) enter onto the property where any
Collateral is located and take possession thereof with or without judicial
process, (iii) prior to the disposition of the Collateral, store the Collateral
or otherwise prepare the Collateral for disposition in any manner to the extent
Secured Party deems appropriate, (iv) take possession of Grantor's premises or
place custodians in exclusive control thereof, remain on such premises and use
the same for the purpose of taking any actions described in the preceding
clause (iii) and collecting any Secured Obligation, (v) exercise any and all
rights and remedies of Grantor under or in connection with the contracts
related to the Collateral or otherwise in respect of the Collateral, including
without limitation any and all rights of Grantor to demand or otherwise require
payment of any amount under, or performance of any provision of, such
contracts, and (vi) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any of Secured Party's offices or elsewhere, for cash, on credit or
for future delivery, at such time or times and at such price or prices and upon
such other terms as Secured Party may deem commercially reasonable. Secured
Party or any Lender may be the purchaser of any or all of the Collateral at any
such sale and Secured Party, as agent for and
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representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Grantor, and Grantor hereby waives (to the extent permitted by applicable law)
all rights of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to 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. Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
Secured Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
Grantor hereby waives any claims against Secured Party arising by reason of the
fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale, even if Secured Party accepts the first offer received and does not offer
such Collateral to more than one offeree. If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantor shall be liable for the deficiency and the fees of any
attorneys employed by Secured Party to collect such deficiency.
(b) Upon written demand from Secured Party, Grantor shall
execute and deliver to Secured Party an assignment or assignments of the
Trademarks, Registrations, Trademark Rights and the Associated Goodwill and
such other documents as are requested by Secured Party. Grantor agrees that
such an assignment and/or recording shall be applied to reduce the Secured
Obligations outstanding only to the extent that Secured Party (or any Lender)
receives cash proceeds in respect of the sale of, or other realization upon,
the Collateral.
(c) Within five Business Days after written notice from
Secured Party, Grantor shall make available to Secured Party, to the extent
within Grantor's power and authority, such personnel in Grantor's employ on the
date of such Event of Default as Secured Party may reasonably designate, by
name, title or job responsibility, to permit Grantor to continue, directly or
indirectly, to produce, advertise and sell the products and services sold or
delivered by Grantor under or in connection with the Trademarks, Registrations
and Trademark Rights, such persons to be available to perform their prior
functions on Secured Party's behalf and to be compensated by Secured Party at
Grantor's expense on a per diem, pro-rata basis consistent with the salary and
benefit structure applicable to each as of the date of such Event of Default.
SECTION 14. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale
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of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of Secured Party, be held by Secured Party as
Collateral for, and/or then, or at any other time thereafter, applied in full
or in part by Secured Party against, the Secured Obligations in the following
order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in
connection therewith, and all amounts for which Secured Party is
entitled to indemnification hereunder and all advances made by Secured
Party hereunder for the account of Grantor, and to the payment of all
costs and expenses paid or incurred by Secured Party in connection
with the exercise of any right or remedy hereunder, all in accordance
with Section 15.
SECOND: To the payment of all other Secured Obligations in
such order as Secured Party shall elect; and
THIRD: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 15. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Secured Party and each
Lender from and against any and all claims, losses and liabilities in any way
relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
from Secured Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the
amount of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Grantor to perform or observe any of the provisions hereof.
SECTION 16. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall assign and create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Grantor, its successors and assigns, and (c) inure,
together with the rights and remedies of Secured Party hereunder, to the
benefit of Secured Party and its successors, transferees and assigns. Without
limiting the generality
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of the foregoing clause (c), but subject to the provisions of subsection 10.1
of the Credit Agreement, any Lender may assign or otherwise transfer any Loans
held by it to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to Lenders herein or
otherwise. Upon the payment in full of all Secured Obligations, the
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit, the security interest assigned
and granted hereby shall terminate and all rights to the Collateral shall
revert to Grantor. Upon any such termination Secured Party will, at Grantor's
expense, execute and deliver to Grantor such documents as Grantor shall
reasonably request to evidence such termination.
SECTION 17. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders. Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
notice of resignation as Secured Party under this Agreement; removal of Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute
removal as Secured Party under this Agreement; and appointment of a successor
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
appointment of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Agent under subsection 9.5 of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Secured Party
hereunder.
SECTION 18. AMENDMENTS; ETC. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by Grantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by Secured Party and, in the case of any such
amendment or modification, by Grantor. Any
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such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given.
SECTION 19. NOTICES. Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage
prepaid and properly addressed. For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on the signature
pages hereof or, as to either party, such other address as shall be designated
by such party in a written notice delivered to the other party hereto.
SECTION 20. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 21. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 22. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 23. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement,
terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of
New York are used herein as therein defined.
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SECTION 24. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, GRANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO GRANTOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 19;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE
IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER GRANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT SECURED PARTY RETAINS THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION 24
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
SECTION 25. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Grantor and Secured
Party each acknowledge that this waiver is a material inducement for Grantor
and Secured Party to enter into a business relationship, that Grantor and
Secured Party have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Grantor and Secured Party further warrant and represent that
XXIV-17
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each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 25 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
SECTION 26. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
XXIV-18
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IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
[NAME OF GRANTOR]
By:
-------------------------------------
Title:
Notice Address:
------------------------
------------------------
------------------------
BT COMMERCIAL CORPORATION
By:
-------------------------------------
Title:
Notice Address: BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop #4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Bhartai Baliga
S-1
370
SCHEDULE A
TO
SUBSIDIARY TRADEMARK COLLATERAL SECURITY AGREEMENT
UNITED STATES
REGISTERED TRADEMARK REGISTRATION REGISTRATION
OWNER DESCRIPTION NUMBER DATE
---------- ------------- ------------ ------------
A-1
371
SCHEDULE B
TO
SUBSIDIARY TRADEMARK COLLATERAL SECURITY AGREEMENT
B-1
372
EXHIBIT XXV
[FORM OF SUBSIDIARY PATENT SECURITY AGREEMENT]
SUBSIDIARY PATENT COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
This SUBSIDIARY PATENT COLLATERAL ASSIGNMENT AND SECURITY
AGREEMENT (this "AGREEMENT") is dated as of ___________, ____ and entered into
by and between [NAME OF ASSIGNOR], a _____________ corporation ("ASSIGNOR"),
and BT COMMERCIAL CORPORATION, as agent for and representative of (in such
capacity herein called "ASSIGNEE") the financial institutions ("LENDERS") party
to the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Assignee and Lenders have entered into a Credit
Agreement dated as of November 12, 1997 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with FWT, Inc., a Texas
corporation ("COMPANY"), pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company.
B. Assignor has and may in the future have rights, title
and interests in and to various Patents and other related Collateral (as such
terms are hereinafter defined).
C. Assignor is willing to grant to Assignee (i) a
security interest in all such Collateral for the purpose of securing the
complete and timely satisfaction of all of the Secured Obligations (as
hereinafter defined) and (ii) effective upon the occurrence and during the
continuation of an Event of Default, an assignment of Assignor's entire right,
title and interest in and to all such Collateral.
D. Assignor has executed and delivered (i) the
Subsidiary Guaranty dated as of ___________, ____ (said Subsidiary Guaranty, as
it may hereafter be amended, supplemented or otherwise modified from time to
time, being the "GUARANTY") in favor of Assignee for the benefit of Lenders,
pursuant to which Assignor has guarantied the prompt payment and performance
when due of all Obligations of the Company under the Credit Agreement and (ii)
the Subsidiary Security Agreement dated as of ___________, ____ (the
"SUBSIDIARY SECURITY AGREEMENT") between Assignor and Assignee for the benefit
of Lenders, pursuant to which Assignor has granted Assignee a security interest
in all of its personal property, including without limitation, the Collateral,
as defined herein, which Subsidiary Security Agreement is to be supplemented by
this Agreement.
XXV-1
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E. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Assignor shall have
granted the security interests and made the conditional assignment and
undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Assignor hereby agrees with Assignee
as follows:
SECTION 1. GRANT OF SECURITY. Assignor hereby grants to
Assignee a security interest in all of Assignor's right, title and interest in
and to the following, in each case whether now or hereafter existing or in
which Assignor now has or hereafter acquires an interest and wherever the same
may be located (the "COLLATERAL"):
(a) all patents and patent applications and rights and
interests in patents and patent applications under any domestic law that are
presently, or in the future may be, owned by Assignor and all patents and
patent applications and rights and interests in patents and patent applications
under any domestic law that are presently, or in the future may be, held or
used by Assignor in whole or in part (including, without limitation, the
patents and patent applications listed in Schedule A annexed hereto, as the
same may be amended pursuant hereto from time to time), all rights (but not
obligations) corresponding thereto (including without limitation the right (but
not the obligation) to ▇▇▇ for past, present and future infringements in the
name of Assignor or in the name of Assignee or Lenders), and all re-issues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof (all of the foregoing being collectively referred to as the "PATENTS");
it being understood that the rights and interest assigned hereby shall include,
without limitation, all rights and interests pursuant to licensing or other
contracts in favor of Assignor pertaining to patent applications and patents
presently or in the future owned or used by third parties but, in the case of
third parties which are not Affiliates of Assignor, only to the extent
permitted by such licensing or other contracts and, if not so permitted, only
with the consent of such third parties;
(b) All general intangibles relating to the Patents;
(c) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon; and
(d) all proceeds, products, rents and profits (including
without limitation license royalties and proceeds of infringement suits) of or
from any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Assignee is the loss
payee thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of
XXV-2
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the foregoing Collateral. For purposes of this Agreement, the term "PROCEEDS"
includes whatever is receivable or received when Collateral or proceeds are
sold, exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary.
Notwithstanding the foregoing, Collateral shall exclude any
intellectual property right, contracts and agreements to the extent, and only
to the extent, that such intellectual property right, contract or agreement
contains a provision enforceable at law and in equity that would be breached by
(or would result in the termination of such intellectual property contract or
agreement upon) the grant of the security interest created herein pursuant to
the terms of this Agreement; provided, however, that if and when any
prohibition on the assignment, pledge or grant of a security interest in such
intellectual property right, contract or agreement is removed, the Secured
Party will be deemed to have been granted a security interest in such
intellectual property right, contract or agreement as of the date hereof, and
the Collateral will be deemed to include such intellectual property right,
contract or agreement.
SECTION 2. CONDITIONAL ASSIGNMENT. In addition to, and not
by way of limitation of, the granting of a security interest in the Collateral
pursuant to Section 1, Assignor hereby, effective only upon the occurrence and
during the continuance of an Event of Default and upon written notice from
Assignee and subject to the terms of this Agreement, grants, sells, conveys,
transfers, assigns and sets over to Assignee, for its benefit and the ratable
benefit of Lenders, all of Assignor's right, title and interest in and to the
Collateral, including without limitation Assignor's right, title and interest
in and to the Patents identified in Schedule A annexed hereto.
SECTION 3. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Assignor now or hereafter
existing under or arising out of or in connection with the Credit Agreement,
Guaranty and the other Loan Documents and all extensions or renewals thereof,
whether for principal, interest (including without limitation interest that,
but for the filing of a petition in bankruptcy with respect to Assignor, would
accrue on such obligations), reimbursement of amounts drawn under Letters of
Credit, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Assignee or any Lender as a preference, fraudulent
transfer or otherwise (all such obligations and liabilities being the
"UNDERLYING DEBT"), and all obligations of every nature of Assignor now or
hereafter existing under this Agreement (all such obligations of Assignor,
together with the Underlying Debt, being the "SECURED OBLIGATIONS").
XXV-3
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SECTION 4. ASSIGNOR REMAINS LIABLE. Anything contained
herein to the contrary notwithstanding, (a) Assignor shall remain liable under
any contracts and agreements included in the Collateral, to the extent set
forth therein, to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by
Assignee of any of its rights hereunder shall not release Assignor from any of
its duties or obligations under the contracts and agreements included in the
Collateral, and (c) Assignee shall not have any obligation or liability under
any contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Assignee be obligated to perform any of the obligations or
duties of Assignor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Assignor
represents and warrants as follows:
(a) Description of Collateral. A true and complete list
of all Patents owned, held (whether pursuant to a license or otherwise) or used
by Assignor, in whole or in part, as of the date of this Agreement is set forth
in Schedule A annexed hereto.
(b) Validity and Enforceability of Collateral. Each of
the Patents that is material to the business of Assignor is valid, subsisting
and enforceable and Assignor is not aware of any pending or, to Assignor's
knowledge, threatened claim by any third party that any such material Patent is
invalid or unenforceable or that the use of any such material Patents violates
the rights of any third person or of any basis for any such claim.
(c) Ownership of Collateral. Except for any interests
disclosed in Schedule B annexed hereto, if any, Permitted Encumbrances and the
security interest and conditional assignment created by this Agreement,
Assignor owns the Collateral free and clear of any Lien. Except with respect
to any interests disclosed in Schedule B annexed hereto and such as may have
been filed in favor of Assignee relating to this Agreement, (i) no effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any filing or recording office and (ii) no
effective filing covering all or any part of the Collateral is on file in the
United States Patent and Trademark Office.
SECTION 6. NEW PATENTS AND PATENT APPLICATIONS.
(a) Assignor hereby authorizes Assignee to modify this Agreement without
obtaining Assignor's approval of or signature to such modification by amending
Schedule A annexed hereto to include reference to any right, title or interest
in any existing Patent or any Patent acquired or developed by Assignor after
the execution hereof or to delete any reference to any right, title or interest
in any Patent in which Assignor no longer has or claims any right, title or
interest.
(b) If Assignor shall hereafter obtain rights to any
patentable inventions, or become entitled to the benefit of any patent
application or patent or any reissue,
XXV-4
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division, continuation, renewal, extension, or continuation-in-part of any
Patent or any improvement on any Patent, the provisions of this Agreement shall
automatically apply thereto. Assignor shall promptly notify Assignee in writing
of any Patents acquired by Assignor after the date hereof. Concurrently with
the filing of an application for any Patent, Assignor shall execute, deliver
and record in all places where this Agreement is recorded an appropriate Patent
Collateral Assignment and Security Agreement, substantially in the form hereof,
with appropriate insertions, or an amendment to this Agreement, in form and
substance satisfactory to Assignee, pursuant to which Assignor shall grant a
security interest and conditional assignment to the extent of its interest in
such Patent as provided herein to Assignee unless so doing would, in the
reasonable judgment of Assignor, after due inquiry, result in the grant of a
patent in the name of Assignee, in which event Assignor shall give written
notice to Assignee as soon as reasonably practicable and the filing shall
instead be undertaken as soon as practicable but in no case later than
immediately following the grant of the Patent.
SECTION 7. CERTAIN COVENANTS OF ASSIGNOR. Assignor shall:
(a) diligently keep reasonable records respecting the
Collateral and at all times keep at least one complete set of its records
concerning substantially all of the Patents at its chief executive office or
principal place of business;
(b) use commercially reasonable efforts not to permit the
inclusion in any contract to which it becomes a party after the date hereof of
any provision that could or might in any way impair or prevent the creation of
a security interest in, or the assignment of, Assignor's rights and interests
in any property included within the definition of any Patents acquired under
such contracts;
(c) take all steps reasonably necessary to protect the
secrecy of all trade secrets relating to the products and services sold or
delivered under or in connection with the Patents, including without limitation
entering into confidentiality agreements with employees and labeling and
restricting access to secret information and documents;
(d) use proper statutory notice in connection with its
use of each of the Patents; and
(e) use consistent standards of high quality (which may
be consistent with Assignor's past practices) in the manufacture, sale and
delivery of products and services sold or delivered under or in connection with
the Patents, including, to the extent applicable, in the operation and
maintenance of its retail stores and other merchandising operations.
SECTION 8. CERTAIN INSPECTION RIGHTS. Assignor hereby grants
to Assignee and its employees, representatives and agents the right to visit,
during Assignor's normal business hours, Assignor's plants, facilities and
other places of business that are utilized in connection with the manufacture,
production, inspection,
XXV-5
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storage or sale of products and services sold or delivered under any of the
Patents (or which were so utilized during the prior six month period), and to
inspect the quality control and all other records relating thereto upon
reasonable notice to Assignor and as often as may be reasonably requested (but
in no event more than two (2) times in any calendar year), provided, however,
that Assignee shall have the right to an unlimited number of visits during an
Event of Default.
SECTION 9. AMOUNTS PAYABLE IN RESPECT OF THE COLLATERAL.
Except as otherwise provided in this Section 9, Assignor shall continue to
collect, at its own expense, all amounts due or to become due to Assignor in
respect of the Collateral or any portion thereof. In connection with such
collections, Assignor may take (and, at Assignee's direction, shall take) such
action as Assignor or Assignee may deem necessary or advisable to enforce
collection of such amounts; provided, however, that Assignee shall have the
right at any time, upon the occurrence and during the continuation of an Event
of Default and upon written notice to Assignor of its intention to do so, to
notify the obligors with respect to any such amounts of the existence of the
security interest created, and the conditional assignment effected hereby, and
to direct such obligors to make payment of all such amounts directly to
Assignee, and, upon such notification and at the expense of Assignor, to
enforce collection of any such amounts and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as
Assignor might have done. After receipt by Assignor of the notice from
Assignee referred to in the proviso to the preceding sentence, (i) all amounts
and proceeds (including checks and other instruments) received by Assignor in
respect of amounts due to Assignor in respect of the Collateral or any portion
thereof shall be received in trust for the benefit of Assignee hereunder, shall
be segregated from other funds of Assignor and shall be forthwith paid over or
delivered to Assignee in the same form as so received (with any necessary
endorsement) to be held as cash Collateral and applied as provided by Section
17, and (ii) Assignor shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any obligor with respect
thereto or allow any credit or discount thereon.
SECTION 10. PATENT APPLICATIONS AND LITIGATION.
(a) Assignor shall have the duty diligently (subject to
Assignor's reasonable business judgment), through counsel reasonably acceptable
to Assignee, to prosecute any patent application relating to any of the Patents
specifically identified in Schedule A annexed hereto that is pending as of the
date of this Agreement, to make application on any existing or future
unpatented but patentable invention that is material to Assignor, and to do any
and all acts which are necessary or desirable to preserve and maintain all
rights in all Patents. Any expenses incurred in connection therewith shall be
borne solely by Assignor. Subject to the foregoing and Assignor's reasonable
judgment, Assignor shall not abandon any right to file a patent application or
any pending patent application or any Patent without the prior written consent
of Assignee.
XXV-6
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(b) Except as provided in Section 10(d) and
notwithstanding Section 2, Assignor shall have the right to commence and
prosecute in its own name, as real party in interest, for its own benefit and
at its own expense, such suits, proceedings or other actions for infringement,
unfair competition, or other damage or reexamination or reissue proceedings as
are in its reasonable business judgment necessary to protect the Collateral.
Assignee shall provide, at Assignor's expense, all reasonable and necessary
cooperation in connection with any such suit, proceeding or action including,
without limitation, joining as a necessary party.
(c) Assignor shall promptly, following its becoming aware
thereof, notify Assignee of the institution of, or of any adverse determination
in, any proceeding (whether in the United States Patent and Trademark Office or
any federal, state, local or foreign court) described in Section 10(a) or 10(b)
or regarding Assignor's interests in any material Collateral. Assignor shall
provide to Assignee any information with respect thereto reasonably requested
by Assignee.
(d) Anything contained herein to the contrary
notwithstanding, upon the occurrence and during the continuation of an Event of
Default, Assignee shall have the right (but not the obligation) to bring suit,
in the name of Assignor, Assignee or otherwise, to enforce any Patent and any
license thereunder, in which event Assignor shall, at the request of Assignee,
do any and all lawful acts and execute any and all documents required by
Assignee in aid of such enforcement and Assignor shall promptly, upon demand,
reimburse and indemnify Assignee as provided in Section 18 in connection with
the exercise of its rights under this Section 10. To the extent that Assignee
elects not to bring suit to enforce any Patent or any license thereunder as
provided in this Section 10(d), Assignor agrees to use all reasonable measures,
whether by action, suit, proceeding or otherwise, to prevent the infringement
of any of the Patents by others and for that purpose agrees to diligently
maintain any action, suit or proceeding against any Person so infringing
necessary to prevent such infringement.
SECTION 11. NON-DISTURBANCE AGREEMENTS, ETC. If and to the
extent that Assignor is permitted to license the Collateral, Assignee shall
enter into a non-disturbance agreement or other similar arrangement, at
Assignor's request and expense, with Assignor and any licensee of any
Collateral permitted hereunder in form and substance satisfactory to Assignee
pursuant to which (a) Assignee shall agree not to disturb or interfere with
such licensee's rights under its license agreement with Assignor so long as
such licensee is not in default thereunder and (b) such licensee shall
acknowledge and agree that the Collateral licensed to it is subject to the
security interest and conditional assignment created in favor of Assignee and
the other terms of this Agreement.
SECTION 12. REASSIGNMENT OF COLLATERAL. If (a) an Event of
Default shall have occurred and, by reason of cure, waiver, modification,
amendment or otherwise, no longer be continuing, (b) no other Event of Default
shall have occurred and be continuing, (c) an assignment to Assignee of any
rights, title and interests in and to the
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Collateral shall have been previously made and shall have become absolute and
effective pursuant to Section 2, Section 13(f) or Section 16(b), and (d) the
Secured Obligations shall not have become immediately due and payable, upon the
written request of Assignor and the written consent of Assignee; then Assignee
shall promptly execute and deliver to Assignor such assignments as may be
necessary to reassign to Assignor any such rights, title and interests as may
have been assigned to Assignee as aforesaid, subject to any disposition thereof
that may have been made by Assignee pursuant hereto; provided that, after
giving effect to such reassignment, Assignee's security interest and
conditional assignment granted pursuant to Section 1 and Section 2, as well as
all other rights and remedies of Assignee granted hereunder, shall continue to
be in full force and effect; and provided, further that the rights, title and
interests so reassigned shall be free and clear of all Liens other than Liens
(if any) encumbering such rights, title and interest at the time of their
assignment to Assignee and Permitted Encumbrances.
SECTION 13. ASSIGNEE APPOINTED ATTORNEY-IN-FACT. Assignor
hereby irrevocably appoints Assignee as Assignor's attorney-in-fact, with full
authority in the place and stead of Assignor and in the name of Assignor,
Assignee or otherwise, from time to time in Assignee's discretion to take any
action and to execute any instrument that Assignee may deem necessary or
advisable, consistent with the terms of this Agreement, to accomplish the
purposes of this Agreement, including without limitation:
(a) to endorse Assignor's name on all applications,
documents, papers and instruments necessary for Assignee in the use or
maintenance of the Collateral;
(b) during the continuance of an Event of Default, to ask
for, demand, collect, ▇▇▇ for, recover, compound, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;
(d) during the continuance of an Event of Default, to
file any claims or take any action or institute any proceedings that Assignee
may deem necessary or desirable for the collection of any of the Collateral or
otherwise to enforce the rights of Assignee with respect to any of the
Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon
or threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Assignee in its
sole discretion, any such payments made by Assignee to become obligations of
Assignor to Assignee, due and payable immediately without demand; and
(f) upon the occurrence and during the continuation of an
Event of Default, (i) to execute and deliver any of the assignments or
documents requested by
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Assignee pursuant to Section 16(b), (ii) to grant or issue an exclusive or
non-exclusive license to the Collateral or any portion thereof to any Person,
and (iii) otherwise generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though Assignee were the absolute owner thereof for all purposes,
and to do, at Assignee's option and Assignor's expense, at any time or from
time to time, all acts and things that Assignee deems necessary to protect,
preserve or realize upon the Collateral and Assignee's security interest
therein in order to effect the intent of this Agreement, all as fully and
effectively as Assignor might do.
SECTION 14. ASSIGNEE MAY PERFORM. If Assignor fails to
perform any agreement contained herein, Assignee may itself perform, or cause
performance of, such agreement, and the expenses of Assignee incurred in
connection therewith shall be payable by Assignor under Section 18.
SECTION 15. STANDARD OF CARE. The powers conferred on
Assignee hereunder are solely to protect its interest in the Collateral and
shall not impose any duty upon it to exercise any such powers. Except for the
exercise of reasonable care in the custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, Assignee shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. Assignee shall be deemed to have exercised reasonable care in the
custody and preservation of Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which Assignee accords its own
property.
SECTION 16. REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) Assignee may exercise in respect of the Collateral,
in addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected Collateral), and
also may (i) require Assignor to, and Assignor hereby agrees that it will at
its expense and upon request of Assignee forthwith, assemble all or part of the
Collateral as directed by Assignee and make it available to Assignee at a place
to be designated by Assignee that is reasonably convenient to both parties,
(ii) enter onto the property where any Collateral is located and take
possession thereof with or without judicial process, (iii) prior to the
disposition of the Collateral, store the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Assignee deems
appropriate, (iv) take possession of Assignor's premises or place custodians in
exclusive control thereof, remain on such premises and use the same for the
purpose of taking any actions described in the preceding clause (iii) and
collecting any Secured Obligation, (v) exercise any and all rights and remedies
of Assignor under or in connection with the contracts related to the Collateral
or otherwise in respect of the Collateral, including without limitation any and
all rights of Assignor to demand or otherwise require payment of any amount
under, or performance of any provision of,
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such contracts, and (vi) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any of Assignee's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon
such other terms as Assignee may deem commercially reasonable. Assignee or any
Lender may be the purchaser of any or all of the Collateral at any such sale
and Assignee, as agent for and representative of Lenders (but not any Lender or
Lenders in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing), shall be entitled, for the purpose
of bidding and making settlement or payment of the purchase price for all or
any portion of the Collateral sold at any such public sale, to use and apply
any of the Secured Obligations as a credit on account of the purchase price for
any Collateral payable by Assignee at such sale. Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on
the part of Assignor, and Assignor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Assignor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to Assignor 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. Assignee shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. Assignee 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. Assignor hereby waives any claims against Assignee arising by
reason of the fact that the price at which any Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale, even if Assignee accepts the first offer received and does not
offer such Collateral to more than one offeree. If the proceeds of any sale or
other disposition of the Collateral are insufficient to pay all the Secured
Obligations, Assignor shall be liable for the deficiency and the fees of any
attorneys employed by Assignee to collect such deficiency.
(b) Upon written demand from Assignee, Assignor shall
execute and deliver to Assignee an assignment or assignments of the Patents and
such other documents as are necessary or appropriate to carry out the intent
and purposes of this Agreement; provided that the failure of Assignor to comply
with such demand will not impair or affect the validity of the conditional
assignment effected by Section 2 or its effectiveness upon notice by Assignee
as specified in Section 2. Assignor agrees that such an assignment (including
without limitation the conditional assignment effected by Section 2) and/or
recording shall be applied to reduce the Secured Obligations outstanding only
to the extent that Assignee (or any Lender) receives cash proceeds in respect
of the sale of, or other realization upon, the Collateral.
SECTION 17. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Assignee in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of Assignee, be held by Assignee
as Collateral for, and/or then, or at any other
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time thereafter, applied in full or in part by Assignee against, the Secured
Obligations in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Assignee and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Assignee in connection
therewith, and all amounts for which Assignee is entitled to
indemnification hereunder and all advances made by Assignee hereunder
for the account of Assignor, and to the payment of all costs and
expenses paid or incurred by Assignee in connection with the exercise
of any right or remedy hereunder, all in accordance with Section 18;
SECOND: To the payment of all other Secured Obligations in
such order as Assignee shall elect; and
THIRD: To the payment to or upon the order of Assignor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 18. INDEMNITY AND EXPENSES.
(a) Assignor agrees to indemnify Assignee and each Lender
from and against any and all claims, losses and liabilities in any way relating
to, growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result
solely from Assignee's or such Lender's gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction.
(b) Assignor shall pay to Assignee upon demand the amount
of any and all costs and expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that Assignee 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
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of Assignee hereunder, or (iv) the failure by Assignor to
perform or observe any of the provisions hereof.
SECTION 19. CONTINUING ASSIGNMENT AND SECURITY INTEREST;
TRANSFER OF LOANS. This Agreement shall create a continuing security interest
in, and conditional assignment of, the Collateral and shall (a) remain in full
force and effect until the payment in full of the Secured Obligations, the
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit, (b) be binding upon Assignor,
its permitted successors and assigns, and (c) inure, together with the rights
and remedies of Assignee hereunder, to the benefit of Assignee and its
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), but subject to the provisions of subsection 10.1 of the
Credit Agreement, any
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Lender may assign or otherwise transfer any Loans held by it to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Lenders herein or otherwise. Upon the
payment in full of all Secured Obligations, the cancellation or termination of
the Commitments and the cancellation or expiration of all outstanding Letters
of Credit, the security interest and conditional assignment granted hereby
shall terminate and all rights to the Collateral shall revert to Assignor.
Upon any such termination Assignee will, at Assignor's expense, execute and
deliver to Assignor such documents as Assignor shall reasonably request to
evidence such termination.
SECTION 20. ASSIGNEE AS AGENT.
(a) Assignee has been appointed to act as Assignee
hereunder by Lenders. Assignee shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement.
(b) Assignee shall at all times be the same Person that
is Agent under the Credit Agreement. Written notice of resignation by Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute notice
of resignation as Assignee under this Agreement; removal of Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute removal as
Assignee under this Agreement; and appointment of a successor Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute appointment of a
successor Assignee under this Agreement. Upon the acceptance of any
appointment as Agent under subsection 9.5 of the Credit Agreement by a
successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Assignee under this Agreement, and the retiring or removed Assignee
under this Agreement shall promptly (i) transfer to such successor Assignee all
sums, securities and other items of Collateral held hereunder, together with
all records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Assignee under this Agreement, and
(ii) execute and deliver to such successor Assignee such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Assignee of the
security interests created hereunder, whereupon such retiring or removed
Assignee shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed Agent's resignation or removal
hereunder as Assignee, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Assignee hereunder.
SECTION 21. AMENDMENTS; ETC. Subject to Section 6(a), no
amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by Assignor therefrom, shall in any
event be effective unless the same shall be in writing and signed by Assignee
and, in the case of any such
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amendment or modification, by Assignor. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
SECTION 22. NOTICES. Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex, or four Business
Days after depositing it in the United States mail with postage prepaid and
properly addressed. For the purposes hereof, the address of each party hereto
shall be as set forth under such party's name on the signature pages hereof or,
as to either party, such other address as shall be designated by such party in
a written notice delivered to the other party hereto.
SECTION 23. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Assignee in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 24. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 25. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 26. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement,
terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of
New York are used herein as therein defined.
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SECTION 27. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ASSIGNOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT ASSIGNOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Assignor hereby agrees that service of all process in any such proceeding in
any such court may be made by registered or certified mail, return receipt
requested, to Assignor at its address provided in Section 22, such service
being hereby acknowledged by Assignor to be sufficient for personal
jurisdiction in any action against Assignor in any such court and to be
otherwise effective and binding service in every respect. Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of Assignee to bring proceedings against Assignor in the courts
of any other jurisdiction.
SECTION 28. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
LAW, ASSIGNOR AND ASSIGNEE HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.
Assignor and Assignee each acknowledge that this waiver is a material
inducement for Assignor and Assignee to enter into a business relationship,
that Assignor and Assignee have already relied on this waiver in entering into
this Agreement and that each will continue to rely on this waiver in their
related future dealings. Assignor and Assignee further warrant and represent
that each has reviewed this waiver with its legal counsel, and that each
knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
SECTION 29. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
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IN WITNESS WHEREOF, Assignor and Assignee have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
[NAME OF ASSIGNOR]
By:
-----------------------------------
Title:
--------------------------
Notice Address:
BT COMMERCIAL CORPORATION
By:
-----------------------------------
Title:
--------------------------
Notice Address:
BT Commercial Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop #4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Bhartai Baliga
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SCHEDULE A
TO SUBSIDIARY PATENT COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
PATENTS ISSUED
Patent No. Issue Date Invention Inventor
---------- ---------- --------- --------
PATENTS PENDING
Applicant's Date Application
Name Filed No. Invention Inventor
----------- ----- ----------- --------- --------
A-1
389
SCHEDULE B
TO SUBSIDIARY PATENT COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
B-1
390
EXHIBIT XXVI
[FORM OF INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT]
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
This INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT (this
"Agreement") is dated as of November 12, 1997, and entered into by BT
COMMERCIAL CORPORATION, as administrative agent (in such capacity, the
"Revolving Agent") for the lenders under the Credit Agreement referred to
below, BANKERS TRUST COMPANY, as administrative agent (in such capacity, the
"Bridge Agent") for the lenders under the Senior Secured Credit Agreement
referred to below, BANKERS TRUST COMPANY, as collateral agent (in such
capacity, the "Collateral Agent") under the Pledge Agreements referred below,
and FWT, INC., a Texas corporation (the "Borrower").
PRELIMINARY STATEMENTS
A. The Borrower, the several lenders from time to time
parties thereto (the "Revolving Lenders") and the Revolving Agent, have entered
into a Credit Agreement dated as of the date hereof, pursuant to which the
Revolving Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to the Borrower.
B. The Borrower, the several lenders from time to time
parties thereto (the "Bridge Lenders; the Bridge Lenders, the Revolving
Lenders, the Bridge Agent, the Revolving Agent and the Collateral Agent are
sometimes hereinafter collectively referred to as the "Secured Parties") and
the Bridge Agent, have entered into a Senior Secured Credit Agreement dated as
of the date hereof, pursuant to which the Bridge Lenders have made certain
commitments, subject to the terms and conditions set forth in the Senior
Secured Credit Agreement, to extend certain credit facilities to the Borrower.
C. As required by the Credit Agreement, the Borrower has
executed and delivered in favor of the Revolving Agent for the benefit of the
Revolving Lenders that certain Company Security Agreement dated as of the date
hereof (said agreement, as it may hereafter be amended, restated or otherwise
modified from time to time, being the "Revolving Borrower Security Agreement")
granting to Revolving Agent a security interest in all the personal property of
Borrower (the "Revolving Borrower Personal Property Collateral").
D. As required by the Senior Secured Credit Agreement,
the Borrower has executed and delivered in favor of the Bridge Agent for the
benefit of the Bridge Lenders that certain Company Security Agreement dated as
of the date hereof (said agreement, as it may
391
hereafter be amended, restated or otherwise modified from time to time, being
the "Bridge Borrower Security Agreement") granting to Bridge Agent a security
interest in all the personal property of Borrower other than the inventory, the
accounts receivable and the general intangibles (including without limitation,
intellectual property) of Borrower (the "Bridge Borrower Personal Property
Collateral").
E. The Credit Agreement requires that each future
Subsidiary of the Borrower that is a Guarantor execute and deliver in favor of
the Revolving Agent for the benefit of the Revolving Lenders a security
agreement in the form required by such Credit Agreement (said agreement, as it
may be amended, restated or otherwise modified from time to time, being a
"Revolving Subsidiary Security Agreement") granting to Revolving Agent a
security interest in all the personal property of such Subsidiary (the
"Revolving Subsidiary Personal Property Collateral"; the Revolving Borrower
Security Agreement and the Revolving Subsidiary Security Agreement being herein
collectively referred to as the "Revolving Security Agreements" and the
Revolving Borrower Personal Property Collateral and the Revolving Subsidiary
Personal Property Collateral being herein collectively referred to as the
"Revolving Personal Property Collateral").
F. The Senior Secured Credit Agreement requires that each
future Subsidiary of the Borrower that is a Guarantor execute and deliver in
favor of the Bridge Agent for the benefit of the Bridge Lenders a security
agreement in the form required by such Senior Secured Credit Agreement (said
agreement, as it may be amended, restated or otherwise modified from time to
time, being a "Bridge Subsidiary Security Agreement") granting to Bridge Agent
a security interest in all the personal property of such Subsidiary other than
the inventory, the accounts receivable and the general intangibles (including
without limitation, the intellectual property) of such Subsidiary (the "Bridge
Subsidiary Personal Property Collateral"; the Bridge Borrower Security
Agreement and the Bridge Subsidiary Security Agreement being herein
collectively referred to as the "Bridge Security Agreements" and the Bridge
Borrower Personal Property Collateral and the Bridge Subsidiary Personal
Property Collateral being herein collectively referred to as the "Bridge
Personal Property Collateral").
G. Each of the Credit Agreement and the Senior Secured
Credit Agreement requires that upon acquisition of the stock of a Subsidiary,
the Borrower execute and deliver in favor of the Collateral Agent for the
benefit of the Secured Parties a pledge agreement in the form required by such
Credit Agreement and such Senior Secured Credit Agreement (said agreement, as
it may be amended, restated or otherwise modified from time to time, being a
"Borrower Pledge Agreement") granting to Collateral Agent a security interest
in all of the shares of stock of Borrower's Subsidiaries held by Borrower (the
"Borrower Stock Collateral").
H. Each of the Credit Agreement and the Senior Secured
Credit Agreement requires that each future Subsidiary of the Borrower that is a
Guarantor execute and deliver in
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favor of the Collateral Agent for the benefit of the Secured Parties a pledge
agreement in the form required by such Credit Agreement and such Senior Secured
Credit Agreement (such agreement, as it may be amended, restated or otherwise
modified from time to time, being a "Subsidiary Pledge Agreement") granting to
Collateral Agent a security interest in all of the shares of stock of
Borrower's indirect Subsidiaries held by such Subsidiary (the "Subsidiary Stock
Collateral"; the Borrower Pledge Agreement and the Subsidiary Pledge Agreement
being herein collectively referred to as the "Pledge Agreements"; the Borrower
Stock Collateral and the Subsidiary Stock Collateral being herein collectively
referred to as the "Stock Collateral"; the Pledge Agreements, the Revolving
Security Agreements and the Bridge Security Agreements being herein
collectively referred to as the "Collateral Documents"; and the Stock
Collateral, the Revolving Personal Property Collateral and the Bridge Personal
Property Collateral being herein collectively referred to as the "Collateral").
I. The Revolving Agent, the Bridge Agent and the
Collateral Agent desire to set forth their agreement as to the relative
priority of their respective security interests in the Collateral, as to the
manner of sharing amounts received from exercise of their rights with respect
to the Collateral and as to the exercise of remedies under the Collateral
Documents.
J. The parties hereto desire to set forth certain
provisions regarding the appointment, duties and responsibilities of the
Collateral Agent.
NOW, THEREFORE, the parties party hereto agree as follows:
Section 1. Intercreditor Arrangements.
A. Priority. Irrespective of any statement contained in
the Collateral Documents and irrespective of the time, order or method of
attachment or perfection of the security interests granted thereby, the
security interests in the Collateral created by the Collateral Documents in
favor of the Bridge Agent and the Bridge Lenders shall have priority to the
extent set forth herein over the security interests in the Collateral created
by the Collateral Documents in favor of the Revolving Agent and the Revolving
Lenders.
B. Extent of Priority. The proceeds in respect of any
Collateral, whether in the form of cash, securities, insurance proceeds, in
kind or otherwise, shall first be distributed to or set aside for the Bridge
Agent for the benefit of the Bridge Lenders in an amount equal to the aggregate
amount owed to the Bridge Agent and the Bridge Lenders under the Senior Secured
Credit Agreement. Any proceeds in excess of such amount shall then be
distributed to or set aside for the Revolving Agent for the benefit of the
Revolving Lenders in an amount equal to the aggregate amount owed to the
Revolving Lenders and the Revolving Agent under the Credit Agreement.
C. Enforcement of Remedies. Bridge Agent and Revolving
Agent agree to give notice to the other and to the Collateral Agent of the
acceleration or demand for payment of any amounts due under the Credit
Agreement, the Senior Secured Credit Agreement and the Collateral Documents, as
the case may be. With respect to the Bridge Security Agreements
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and the Revolving Security Agreements, each of the Bridge Agent and Revolving
Agent may, without the consent of the other or of the Collateral Agent, proceed
to enforce against the Borrower, the Borrower's Subsidiaries or the Collateral
any right or remedy which is available to it under such Collateral Documents;
provided, however, that it shall give five Business Days prior written notice
of such action to the other unless it determines in good faith that immediate
action is necessary to protect the Collateral, in which case such notice may be
given contemporaneously with the taking of such action. With respect to the
Pledge Agreements, the Collateral Agent may, without the consent of the other
Secured Parties, proceed to enforce against the Borrower, the Borrower's
Subsidiaries or the Collateral any right or remedy which is available to it
under such Collateral Documents upon the direction of a majority of the
Revolving Lenders (the "Requisite Revolving Lenders") or a majority of the
Bridge Lenders (the "Requisite Bridge Lenders"), as the case may be; provided,
however, that it shall give five Business Days prior written notice of such
action to the other Secured Parties unless it determines in good faith that
immediate action is necessary to protect the Collateral, in which case such
notice may be given contemporaneously with the taking of such action.
D. If any Secured Party acquires custody, control or
possession of any Collateral or proceeds therefrom, such Secured Party shall
promptly cause such Collateral, proceeds or payments to be delivered or
distributed in accordance with the provisions of Section 2 of this Agreement.
Until such time as the provisions of the immediately preceding sentence have
been complied with, such Secured Party shall be deemed to hold all such
Collateral, proceeds and payments in trust for the Secured Parties entitled
thereto hereunder. Nothing in this Section shall prevent a Secured Party from
receiving and retaining payments (a) for the provision of services to Borrower
or its Subsidiaries, or (b) in connection with any extension of credit or other
financial accommodation to Borrower or its Subsidiaries, or (c) as security for
any such extension of credit or other financial accommodation if the
obligations of Borrower or its Subsidiaries incurred in connection with such
services, extension of credit or other financial accommodation do not
constitute obligations secured by the Collateral Documents, and if such
obligations are not incurred and such security is not given in breach of the
Credit Agreement or the Senior Secured Credit Agreement.
E. This Agreement shall only apply to the Secured
Parties' rights with respect to the Collateral and the Collateral Documents.
Nothing in this Agreement is intended to affect the rights and remedies of any
of the Secured Parties with respect to any other security interests, liens,
mortgages, pledges or charges of any kind whatsoever which such Secured Parties
may now have or may hereafter obtain with respect to any of the Borrower, its
Subsidiaries or any of the property or assets of the Borrower or its
Subsidiaries other than the Collateral.
Section 2. Application of Collateral or Proceeds of
Collateral. All Collateral or proceeds therefrom shall be applied in the
following order of priority:
First, to the extent not theretofore paid by or on behalf of
Borrower, to pay the fees, costs, expenses of the Revolving Agent, the
Bridge Agent or the Collateral Agent incurred in connection with the
performance of its duties under the Collateral
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Documents, including reasonable attorneys' fees and expenses, and any
other amounts payable to the Revolving Agent, the Bridge Agent or the
Collateral Agent hereunder or under any of the Collateral Documents in
respect of any indemnities or other obligations of the Borrower or its
Subsidiaries;
Second, to the Bridge Agent for the benefit of the Bridge
Lenders in the aggregate amount owed to the Bridge Lenders and the
Bridge Agent under the Senior Secured Credit Agreement;
Third, to the Revolving Agent for the benefit of the Revolving
Lenders in the aggregate amount owed to Revolving Lenders and the
Revolving Agent under the Credit Agreement; and
Fourth, after the payment in full of all obligations under the
Collateral Documents, the balance, if any, to such Person or Persons as
are entitled thereto.
Section 3. Appointment of Collateral Agent.
A. The Revolving Agent on behalf of the Revolving Lenders
and the Bridge Agent on behalf of the Bridge Lenders hereby severally appoint
Bankers Trust Company as Collateral Agent, and authorize the Collateral Agent
to serve as the agent and representative of the Revolving Lenders and the
Bridge Lenders for the purposes of executing and delivering on their behalf the
Pledge Agreements to be executed and delivered by the Borrower and its
Subsidiaries party thereto and, subject to the provisions of this Agreement,
enforcing the Revolving Lenders' and the Bridge Lenders' rights in respect of
the Stock Collateral and the obligations of the Borrower and its Subsidiaries
under the Pledge Agreements. Bankers Trust Company hereby accepts such
appointment and agrees to act as Collateral Agent hereunder and to enter into
and act as Collateral Agent under the Pledge Agreements in accordance with the
terms thereof and of this Agreement.
B. Each party executing this Agreement which is entitled
to give directions to the Collateral Agent agrees that the Collateral Agent may
act as Requisite Revolving Lenders or Requisite Bridge Lenders may request
(regardless of whether any individual Revolving Lender or Bridge Lender agrees,
disagrees or abstains with respect to such request) and that the Collateral
Agent shall have no liability for acting in accordance with such request
(provided such action does not conflict with the express terms of this
Agreement).
C. The Collateral Agent may at any time request
directions from the Requisite Revolving Lenders or Requisite Bridge Lenders as
to any course of action or other matter relating hereto or to the Pledge
Agreements. Except as otherwise may be provided in the Pledge Agreements,
directions given by Requisite Revolving Lenders or Requisite Bridge Lenders to
the Collateral Agent hereunder shall be binding on all Revolving Lenders or all
Bridge Lenders, as the case may be.
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D. Each of the Revolving Agent, the Bridge Agent, the
Revolving Lenders and the Bridge Lenders agrees not to take any action
whatsoever to enforce any term or provision of the Pledge Agreements or to
enforce any of its rights in respect of the Stock Collateral except through the
Collateral Agent in accordance with this Agreement.
Section 4. Disclaimers, Indemnity, Etc.
A. The Collateral Agent shall have no duties or
responsibilities to the Secured Parties except those expressly set forth in
this Agreement and the Collateral Documents and the Collateral Agent shall not
by reason of this Agreement or the Collateral Documents be a trustee for any
Secured Party or have any other fiduciary obligation to any Secured Party
(including any obligation under the Trust Indenture Act of 1939, as amended).
The Collateral Agent shall not be responsible to any Secured Party for any
recitals, statements, representations or warranties contained in this
Agreement, the Credit Agreement or the Senior Secured Credit Agreement or any
related loan documents (collectively, the "Financing Agreements") or in any
certificate or other document referred to or provided for in, or received by
any of them under, any of the Financing Agreements, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any of the
Financing Agreements or any other document referred to or provided for therein
or any lien under the Collateral Documents or the perfection or priority of any
such lien or the value or condition of the Collateral or the title of the
Borrower or its Subsidiaries to the Collateral or for any failure by Borrower
or its Subsidiaries to perform any of its obligations under any of the
Financing Agreements. The Collateral 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.
Neither the Collateral Agent nor any of its directors, officers, employees or
agents shall be liable or responsible for any action taken or omitted to be
taken by it or them hereunder or in connection herewith, except to the extent
of its or their own gross negligence or willful misconduct.
B. The Collateral Agent shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telex, telecopy, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel to
the Borrower or any Subsidiary of the Borrower), independent accountants and
other experts selected by the Collateral Agent.
C. Notwithstanding anything to the contrary contained
herein, the Collateral Agent shall not be required to take any action that is
in its opinion contrary to law or to the terms of this Agreement or any or all
of the Collateral Documents or which would in its opinion subject it or any of
its officers, employees or directors to liability, and the Collateral Agent
shall not be required to take any action under this Agreement or any or all of
the Collateral Documents unless and until the Collateral Agent shall be
indemnified to its satisfaction by the Secured Parties against any and all
loss, cost, expense or liability in connection therewith.
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D. Except as expressly provided herein or in the
Collateral Documents, the Collateral Agent shall have no duty to take any
affirmative steps with respect to the collection of amounts payable in respect
of the Collateral. The Collateral Agent shall incur no liability as a result
of any sale of any Collateral at any private sale, except to the extent that
such liability arises or results from its gross negligence or willful
misconduct.
E. (i) The Collateral Agent may resign at any time by
giving at least 30 days notice thereof to the Secured Parties (such resignation
to take effect as hereinafter provided). In the event of any such resignation
of the Collateral Agent, the Revolving Lenders and the Bridge Lenders shall
thereupon have the right to appoint a successor Collateral Agent. If no
successor Collateral Agent shall have been so appointed and shall have accepted
such appointment within 30 days after the notice of the intent of the
Collateral Agent to resign, then the retiring Collateral Agent may, on behalf
of the other Secured Parties, appoint a successor Collateral Agent. Any
successor Collateral Agent appointed pursuant to this clause (i) shall be a
bank party to the Credit Agreement or the Senior Secured Credit Agreement or a
commercial bank organized under the laws of the United States of America or any
state thereof and having a combined capital and surplus of at least
$250,000,000.
(ii) Upon the acceptance of any appointment as
Collateral Agent hereunder by a successor Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Collateral
Agent, and the retiring or removed Collateral Agent shall thereupon be
discharged from its duties and obligations hereunder. After any retiring or
removed Collateral Agent's resignation or removal hereunder as Collateral
Agent, the provisions of this Section 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 the Collateral Agent.
F. The Borrower agrees (i) to reimburse the Collateral
Agent, on demand, for any expenses incurred by the Collateral Agent, including
counsel fees and compensation of agents, arising out of, in any way connected
with, or as a result of, the execution or delivery of this Agreement, any
Collateral Document or any agreement or instrument contemplated hereby or
thereby or the performance by the parties hereto or thereto of their respective
obligations hereunder or thereunder or in connection with the enforcement or
protection of the rights of the Collateral Agent and the Secured Parties under
this Agreement and any Collateral Documents and (ii) to indemnify and hold
harmless the Collateral Agent and its directors, officers, employees and
agents, on demand, from and against any and all claims, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Collateral Agent in its capacity as the
Collateral Agent or any of them in any way relating to or arising out of this
Agreement or any Collateral Document, or any action taken or omitted by them
under this Agreement or any Collateral Document; provided that the Borrower
shall not be liable to the Collateral Agent for any portion of such claims,
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements to the extent resulting from the gross
negligence or willful misconduct of the Collateral Agent or any of its
directors, officers, employees or agents. In addition, in the event that any
successor Collateral
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Agent shall be appointed, the Borrower agrees to pay the reasonable fees and
expenses of such successor Collateral Agent for the performance of its duties
hereunder and under the Collateral Documents.
Section 5. Miscellaneous.
A. All notices and other communications provided for
herein shall be in writing and may be personally served, telecopied, or sent by
courier delivery or United States mail and shall be deemed to have been given
when delivered in person, or upon receipt of such telecopy, courier delivery or
mail. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 5(A)) shall
be as set forth under each party's name on the signature pages hereof.
B. This Agreement and the Collateral Documents may be
modified or waived only by an instrument or instruments in writing signed by
the Revolving Agent, the Bridge Agent and the Collateral Agent and the Borrower
and its Subsidiaries signatory hereto or to any such Collateral Document.
C. This Agreement shall be binding upon and inure to the
benefit of the Revolving Agent, the Bridge Agent and the Collateral Agent, each
other Person party hereto and each Secured Party and their respective
successors and assigns.
D. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
E. Upon the earlier to occur of: (I) the payment in full
of the Borrower's obligations under the Senior Secured Credit Agreement through
the proceeds of the issuance of the Takeout Securities (as defined in the
Credit Agreement) or (II) the termination of all commitments to extend credit
which would constitute obligations secured by the Collateral Documents and the
indefeasible payment in full of all such obligations and expiration or
cancellation of all letters of credit secured by the Collateral Documents, this
Agreement shall terminate.
F. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK) WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
G. By countersigning or otherwise accepting the terms of
this Agreement, the Borrower and each Subsidiary party hereto acknowledge and
consent to and agree to perform and be bound by each of the provisions hereof
stated to be applicable to them.
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H. All judicial proceedings brought against any party
hereto arising out of or relating to this Agreement may be brought in any state
or federal court of competent jurisdiction located in the Borough of Manhattan
in the State of New York and by execution and delivery of this Agreement, each
party hereto accepts for itself and in connection with its properties,
generally and unconditionally, the nonexclusive jurisdiction of the aforesaid
courts and waives any defense of forum non conveniens and irrevocably agrees to
be bound by any judgment rendered thereby in connection with this Agreement.
I. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The
scope of this waiver is intended to be all encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement and that each will continue to rely on this waiver in their
related future dealings. Each party hereto further warrants and represents
that it has reviewed this waiver with its legal counsel, and that it knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
J. Nothing contained in this Agreement and no action
taken by the Bridge Agent, the Revolving Agent or the Collateral Agent
hereunder shall be deemed to constitute the Bridge Agent, the Revolving Agent
or the Collateral Agent a partnership, association, joint venture or other
entity.
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IN WITNESS HEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
BANKERS TRUST COMPANY, as Bridge Agent
By:
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Title:
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Notice Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
BT COMMERCIAL CORPORATION,
as Revolving Agent
By:
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Title:
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Notice Address:
BT Commercial Corporation
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Mail Stop #4032
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Bhartai Baliga
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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400
Each Loan Party, by its execution of this Agreement in the
space provided below, hereby accepts and agrees to be bound by the foregoing
provisions of this Agreement.
FWT, INC.
By:
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Title:
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