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Exhibit 10.1
EXECUTION COPY
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YOUNG & RUBICAM HOLDINGS INC.,
YOUNG & RUBICAM INC., a New York corporation,
YOUNG & RUBICAM INC., a Delaware corporation,
YOUNG & RUBICAM L.P.,
THE SUBSIDIARY BORROWERS
FROM TIME TO TIME PARTIES HERETO
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$700,000,000
CREDIT AND GUARANTEE AGREEMENT
December 12, 1996
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BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
AS ADMINISTRATIVE AGENT
BANK OF AMERICA INTERNATIONAL LIMITED
AS EUROPEAN PAYMENT AGENT
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................... 1
1.1 Defined Terms................................................... 1
1.2 Other Definitional Provisions................................... 27
SECTION 2. AMOUNT AND TERMS OF TERM COMMITMENTS............................ 28
2.1 Term Loans...................................................... 28
2.2 Procedure for Term Loan Borrowing............................... 28
SECTION 3. AMOUNT AND TERMS OF REVOLVING COMMITMENTS....................... 29
3.1 Revolving Commitments........................................... 29
3.2 Procedure for Revolving Borrowing............................... 29
3.3 L/C Commitment.................................................. 30
3.4 Procedure for Issuance of Letters of Credit..................... 31
3.5 Letter of Credit Fees, Commissions and Other Charges............ 31
3.6 L/C Participations.............................................. 32
3.7 Letter of Credit Reimbursement Obligations...................... 33
3.8 Obligations Absolute............................................ 34
3.9 Letter of Credit Payments....................................... 34
3.10 Letter of Credit Applications.................................. 34
3.11 Swing Line Commitment.......................................... 34
3.12 Procedure for Swing Line Borrowing............................. 35
SECTION 4. AMOUNT AND TERMS OF FRONTED OFFSHORE LOANS...................... 36
4.1 Fronted Offshore Currency Subfacility........................... 36
4.2 Procedure for Fronted Offshore Loan Borrowings.................. 36
4.3 Fronted Offshore Loans Fees, Commissions and Other Charges...... 37
4.4 Participations.................................................. 37
SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT ... 39
5.1 Commitment Fees................................................. 39
5.2 Termination or Reduction of Commitments......................... 39
5.3 Repayment of Loans; Evidence of Debt............................ 39
5.4 Optional and Mandatory Prepayments.............................. 41
5.5 Offshore Currency Spot Rate..................................... 44
5.6 Conversion and Continuation Options............................. 45
5.7 Maximum Number of Tranches...................................... 46
5.8 Interest Rates and Payment Dates................................ 46
5.9 Computation of Interest and Fees................................ 46
5.10 Inability to Determine Interest Rate........................... 47
5.11 Pro Rata Treatment and Payments................................ 48
5.12 Illegality..................................................... 49
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5.13 Requirements of Law............................................ 49
5.14 Taxes.......................................................... 50
5.15 Indemnity...................................................... 52
5.16 Change of Lending Office....................................... 52
5.17 Subsidiary Borrowers........................................... 52
SECTION 6. REPRESENTATIONS AND WARRANTIES.................................. 52
6.1 Financial Condition............................................. 53
6.2 No Change....................................................... 53
6.3 Existence; Compliance with Law.................................. 54
6.4 Corporate Power; Authorization; Enforceable Obligations......... 54
6.5 No Legal Bar.................................................... 54
6.6 No Material Litigation.......................................... 54
6.7 No Default...................................................... 55
6.8 Ownership of Property; Liens.................................... 55
6.9 Intellectual Property........................................... 55
6.10 No Burdensome Restrictions..................................... 55
6.11 Taxes.......................................................... 55
6.12 Federal Regulations............................................ 55
6.13 ERISA.......................................................... 56
6.14 Investment Company Act; Other Regulations...................... 56
6.15 Subsidiaries................................................... 56
6.16 Purpose of Loans............................................... 56
6.17 Environmental Matters.......................................... 56
6.18 Regulation H................................................... 57
6.19 Accuracy of Information........................................ 58
6.20 Security Documents............................................. 58
6.21 Solvency....................................................... 58
6.22 Continuing Letters of Credit................................... 58
SECTION 7. CONDITIONS PRECEDENT............................................ 59
7.1 Conditions to Initial Extension of Credit....................... 59
7.2 Conditions to Term Loans on Second Drawdown Date................ 64
7.3 Conditions to Each Extension of Credit.......................... 64
7.4 Each Subsidiary Borrower Credit Event........................... 65
SECTION 8. AFFIRMATIVE COVENANTS........................................... 65
8.1 Financial Statements............................................ 65
8.2 Certificates; Other Information................................. 66
8.3 Payment of Obligations.......................................... 67
8.4 Conduct of Business and Maintenance of Existence................ 67
8.5 Maintenance of Property; Insurance.............................. 67
8.6 Inspection of Property; Books and Records; Discussions.......... 67
8.7 Notices......................................................... 68
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8.8 Environmental Laws.............................................. 68
8.9 Further Assurances.............................................. 69
8.10 Additional Collateral.......................................... 69
8.11 Acquisition of Remaining Equity Interests and Completion
of Recapitalization; Consummation of Holdings Merger
and Partnership Merger...................................... 70
8.12 Interest Rate Protection....................................... 70
SECTION 9. NEGATIVE COVENANTS.............................................. 70
9.1 Financial Condition Covenants................................... 71
9.2 Limitation on Indebtedness...................................... 71
9.3 Limitation on Liens............................................. 73
9.4 Limitation on Guarantee Obligations............................. 74
9.5 Limitation on Fundamental Changes............................... 74
9.6 Limitation on Sale of Assets.................................... 75
9.7 Limitation on Dividends......................................... 75
9.8 Limitation on Capital Expenditures.............................. 76
9.9 Limitation on Investments, Loans and Advances................... 77
9.10 Limitation on Transactions with Affiliates..................... 77
9.11 Limitation on Sales and Leasebacks............................. 78
9.12 Limitation on Changes in Fiscal Year........................... 78
9.13 Limitation on Negative Pledge Clauses.......................... 78
9.14 Limitation on Lines of Business................................ 78
9.15 Limitation on Business of Summit............................... 78
SECTION 10. EVENTS OF DEFAULT.............................................. 78
SECTION 11. GUARANTEE...................................................... 81
11.1 Guarantee...................................................... 81
11.2 No Subrogation, Contribution, Reimbursement or Indemnity....... 82
11.3 Amendments, etc. with respect to the Obligations; Waiver
of Rights................................................... 82
11.4 Guarantee Absolute and Unconditional........................... 83
11.5 Reinstatement.................................................. 84
SECTION 12. THE ADMINISTRATIVE AGENT....................................... 84
12.1 Appointment.................................................... 84
12.2 Delegation of Duties........................................... 85
12.3 Exculpatory Provisions......................................... 85
12.4 Reliance by Administrative Agent............................... 85
12.5 Notice of Default.............................................. 85
12.6 Non-Reliance on Administrative Agent and Other Lenders......... 86
12.7 Indemnification................................................ 86
12.8 Administrative Agent in Its Individual Capacity................ 87
12.9 Successor Administrative Agent................................. 87
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SECTION 13. MISCELLANEOUS.................................................. 87
13.1 Amendments and Waivers......................................... 87
13.2 Notices........................................................ 88
13.3 No Waiver; Cumulative Remedies................................. 89
13.4 Survival of Representations and Warranties..................... 89
13.5 Payment of Expenses and Taxes.................................. 90
13.6 Successors and Assigns; Participations and Assignments......... 90
13.7 Adjustments; Set-off........................................... 93
13.8 Counterparts................................................... 93
13.9 Severability................................................... 93
13.10 Integration................................................... 93
13.11 GOVERNING LAW................................................. 93
13.12 Submission To Jurisdiction; Waivers........................... 94
13.13 Acknowledgements.............................................. 94
13.14 WAIVERS OF JURY TRIAL......................................... 94
13.15 Confidentiality............................................... 94
13.16 Conversion of Currencies...................................... 95
13.17 Joint and Several Obligations................................. 95
13.18 Release of Lien on Receivables................................ 95
13.19 Release of Lien on New York Real Property..................... 96
13.20 Recordation of Mortgages...................................... 96
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Annexes:
Annex A Pricing Grid
Schedules:
Schedule 1.1(a) Lenders, Issuing Banks, Commitments and Addresses
Schedule 6.1 Certain Transactions
Schedule 6.2 Changes
Schedule 6.8 Real Property
Schedule 6.11 Tax Liens
Schedule 6.13 ERISA Events
Schedule 6.15 Subsidiaries
Schedule 6.20 Filing Jurisdictions
Schedule 6.22 Continuing Letters of Credit
Schedule 8.11 Exceptions to Completion of Recapitalization
Schedule 9.2(e) Existing Indebtedness
Schedule 9.2(j) Subordination Terms and Conditions
Schedule 9.3(f) Existing Liens
Schedule 9.4(a) Existing Guarantee Obligations
Exhibits:
Exhibit A Form of Addendum
Exhibit B Form of Borrowing Subsidiary Agreement
Exhibit C Form of Borrowing Subsidiary Termination
Exhibit D Form of Fronting Lender Addendum
Exhibit E Form of Parent Borrower Mortgage
Exhibit F Form of Parent Borrower Pledge Agreement
Exhibit G Form of Parent Borrower Security Agreement
Exhibit H Form of Subsidiaries Guarantee
Exhibit I Form of Subsidiaries Pledge Agreement
Exhibit J Form of Subsidiaries Security Agreement
Exhibit K [Intentionally Omitted]
Exhibit L Form of Swing Line Loan Participation Certificate
Exhibit M Form of Revolving Note
Exhibit N Form of Term Note
Exhibit O Form of Swing Line Note
Exhibit P Form of Fronted Loan Note
Exhibit Q Form of Borrower Closing Certificate
Exhibit R-1 Form of Opinion of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
Exhibit R-2 Form of Opinion of General Counsel
Exhibit R-3 Form of Opinion of Foreign Counsel
Exhibit S Form of Compliance Certificate
Exhibit T Form of Assignment and Acceptance
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CREDIT AND GUARANTEE AGREEMENT, dated as of December 12, 1996, among
YOUNG & RUBICAM HOLDINGS INC., a New York corporation ("Y&R Holdings"), YOUNG &
RUBICAM INC., a New York corporation ("Y&R Inc. (New York)"), YOUNG & RUBICAM
INC., a Delaware corporation ("Y&R Inc. (Delaware)"), YOUNG & RUBICAM L.P., a
Delaware limited partnership ("Y&R LP"; collectively with Y&R Holdings, Y&R Inc.
(New York) and Y&R Inc. (Delaware), the "Parent Borrowers"), the Subsidiary
Borrowers (as hereinafter defined) from time to time parties to this Agreement,
the several banks and other financial institutions from time to time parties to
this Agreement (collectively, the "Lenders"; individually, a "Lender"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association,
as Administrative Agent (as hereinafter defined) for the Lenders, and BANK OF
AMERICA INTERNATIONAL LIMITED, a bank organized under the laws of England, as
European Payment Agent (in such capacity, the "European Payment Agent").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Acquisition": as to any Person, the acquisition (in a single
transaction or a series of related transactions) by such Person of (a) at
least 50% of the outstanding Capital Stock of any other Person, (b) all or
substantially all of the assets of any other Person or (c) assets
constituting one or more business units or divisions of any other Person.
"Addendum": an instrument, substantially in the form of Exhibit A,
by which a Lender becomes a party to this Agreement.
"Adjustment Date": the second Business Day following receipt by the
Administrative Agent of (a) the financial statements required to be
delivered pursuant to subsection 8.1(a) or 8.1(b), as the case may be, for
the most recently completed fiscal period, commencing with the fiscal
quarter ending September 30, 1997, and (b) the compliance certificate
required to be delivered pursuant to subsection 8.2(b) with respect to
such financial statements.
"Administrative Agent": BofA, in its capacity as the agent for the
Lenders under this Agreement and the other Loan Documents.
"Administrative Agent's Payment Office": (a) in respect of payments
in Dollars, the address for payments set forth in subsection 13.2 or such
other address as the Administrative Agent may from time to time specify in
accordance with subsection 13.2, and (b) in the case of payments in any
Eligible Offshore Currency, such address as the Administrative Agent may
from time to time specify in accordance with subsection 13.2.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person or (b) direct or cause
the direction of the management and policies of
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such Person, whether by contract or otherwise.
"Agent-Related Persons": BofA and any successor agent pursuant to
subsection 12.9, together with their respective Affiliates (including, in
the case of BofA, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Outstanding R/C Extensions of Credit": at any time, the
amount equal to the sum of (a) the aggregate principal amount (or the
Dollar Equivalent thereof, in the case of Revolving Offshore Loans) of all
Revolving Loans then outstanding, (b) the aggregate principal amount of
all Swing Line Loans then outstanding, (c) the Dollar Equivalent of the
aggregate principal amount of all Fronted Offshore Loans then outstanding
and (d) the aggregate amount (or the Dollar Equivalent thereof, in the
case of Letters of Credit issued in Offshore Currencies) of all L/C
Obligations then outstanding.
"Aggregate Revolving Commitment": $300,000,000, as such amount may
be reduced from time to time pursuant to the terms of this Agreement.
"Aggregate Term Commitment": $400,000,000, as such amount may be
reduced from time to time pursuant to the terms of this Agreement.
"Agreement": this Credit and Guarantee Agreement, as amended,
supplemented or otherwise modified from time to time.
"Agreement Currency": as defined in subsection 13.16(b).
"Applicable Creditor": as defined in subsection 13.16(b).
"Applicable Debt Level Status": (a) from the Closing Date to but not
including the Second Drawdown Date and without regard to the Debt Level
Status actually in effect during such period, Debt ▇▇▇▇▇ ▇ ▇▇▇▇▇▇, (▇)
from and including the Second Drawdown Date to but not including the first
Adjustment Date and without regard to the Debt Level Status actually in
effect during such period, Debt Level 5 Status and (c) thereafter for the
period commencing on and including any Adjustment Date and ending on the
day immediately preceding the next succeeding Adjustment Date, the Debt
Level Status determined to be in effect on the Adjustment Date which is
the first day of such period, provided, however, that, if the financial
statements required to be delivered pursuant to subsection 8.1(a) or
8.1(b) in respect of any fiscal period ending on or after September 30,
1997, or the certificate required to be delivered in connection therewith
pursuant to subsection 8.2(b), are not delivered when due, then during the
period from the date upon which such financial statements and/or
certificates were required to be delivered until two Business Days
following the date upon which such statements and/or certificates actually
are delivered, the applicable Debt Level Status shall be Debt Level 6
Status.
"Applicable Margin": on any day and as to any Type of Loan (other
than Fronted Offshore Loans), the applicable rate per annum for such Type
of Loan set forth on Annex A opposite the Applicable Debt Level Status in
effect on such day.
"Applicable Rate": on any day as to the commitment fees payable
pursuant to subsection 5.1, the applicable rate per annum set forth on
Annex A opposite the Applicable Debt Level Status in effect on such day.
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"Application": an application, in such form as the relevant Issuing
Bank may specify from time to time, requesting such Issuing Bank to open a
Letter of Credit.
"Arranger": BA Securities, Inc., a Delaware corporation.
"Assignee": as defined in subsection 13.6(c).
"Available Revolving Commitment": at any time, the amount equal to
the excess, if any, of (a) the Aggregate Revolving Commitment at such time
over (b) the Aggregate Outstanding R/C Extensions of Credit at such time.
"Available Term Commitment": at any time, the amount equal to the
excess, if any, of (a) the Aggregate Term Commitment at such time over (b)
the aggregate principal amount of the Term Loans of the Term Lenders
theretofore made.
"Banking Day": (a) with respect to any borrowings, disbursements and
payments in respect of and calculations and interest rates pertaining to
Base Rate Loans, any Business Day, (b) with respect to any borrowings,
disbursements and payments in respect of and calculations, interest rates
and Interest Periods pertaining to Eurodollar Loans, any Business Day
which is also a day on which dealings are carried on in the London
interbank market, (c) with respect to any disbursements and payments in
respect of and calculations, interest rates and Interest Periods
pertaining to any Revolving Offshore Loan, any Business Day which is also
a day on which commercial banks are open for foreign exchange business in
London, England, and on which dealings in the relevant Offshore Currency
are carried on in the applicable offshore foreign exchange interbank
market in which disbursement of or payment in such Offshore Currency will
be made or received hereunder and (d) with respect to any borrowings,
disbursements and payments in and calculations, interest rates and
Interest Periods pertaining to any Fronted Offshore Loan, any Business Day
which is also a day on which commercial banks are open for in, and on
which dealings in the relevant Fronted Offshore Currency are carried on
in, the location of the Fronting Lender's Payment Office with respect to
such Fronted Offshore Currency.
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Reference Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate for any reason, including the inability or
failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms hereof, the Base Rate shall be determined
without regard to clause (b) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Reference Rate or the
Federal Funds Effective Rate shall be effective on the effective day of
such change in the Reference Rate or the Federal Funds Effective Rate,
respectively.
"Base Rate Loans": Revolving Loans or Term Loans the rate of
interest applicable to which is based upon the Base Rate.
"Base Year": as defined in subsection 5.4(f).
"BofA": Bank of America National Trust and Savings Association, a
national banking
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association.
"Borrowers": the collective reference to the Parent Borrowers and
the Subsidiary Borrowers.
"Borrowing Date": any Banking Day specified in a notice pursuant to
subsection 2.2, 3.2, 3.12 or 4.2 as a date on which a Borrower requests a
Lender to make a Loan hereunder.
"Borrowing Subsidiary Agreement": a Borrowing Subsidiary Agreement,
substantially in the form of Exhibit B.
"Borrowing Subsidiary Termination": a Borrowing Subsidiary
Termination, substantially in the form of Exhibit C.
"Business": as defined in subsection 6.17.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in Chicago, New York City or San Francisco are
authorized or required by law to close.
"Calculation Date": with respect to each Offshore Currency, the
fifteenth and last day of each calendar month (or, if such day is not a
Business Day, the next succeeding Business Day), provided that (a) the
second Banking Day preceding each Borrowing Date with respect to any
Offshore Currency Loans in an Offshore Currency shall also be a
"Calculation Date" with respect to such Offshore Currency and (b) the
second Banking Day preceding the date of issuance of a Letter of Credit
denominated in an Eligible Offshore Currency shall also be a "Calculation
Date" with respect to such Eligible Offshore Currency.
"Capital Expenditures": as defined in subsection 9.8.
"Capital Stock": any and all shares, interests, participation or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Collateral Account": as defined in subsection 5.4(c).
"Cash Equivalents": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of one year or less
from the date of acquisition and overnight bank deposits of any Lender or
of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-2
by Standard and Poor's Rating Group ("S&P") or P-2 by ▇▇▇▇▇'▇ Investors
Service, Inc. ("Moody's"), (e) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A
by
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Moody's, (f) securities with maturities of one year or less from the date
of acquisition backed by standby letters of credit issued by any Lender or
any commercial bank satisfying the requirements of clause (b) of this
definition or (g) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of clauses (a)
through (f) of this definition.
"Casualty Event": with respect to any property of any Person, the
receipt by such Person of insurance proceeds, or proceeds of a
condemnation award or other compensation in connection with any loss of or
damage to, or any condemnation or other taking of, such property.
"Change of Control": (a) the H&F Group shall cease to be the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
more than 20% (on a fully-diluted basis) of the outstanding shares of
Capital Stock of the Company or the aggregate votes represented by such
shares of Capital Stock, (b) the H&F Group and the Management Investors
shall cease to be the "beneficial owners" (as defined in Rule 13d-3 under
the Exchange Act) of more than 51% (on a fully-diluted basis) in the
aggregate of the outstanding shares of Capital Stock of the Company or the
aggregate votes represented by such shares of Capital Stock, (c) the H&F
Group and the Management Investors shall cease to collectively have the
right to appoint a majority of the members of the board of directors of
the Company, or (d) the Company shall cease directly or indirectly to own
all the Capital Stock, acquired pursuant to the Recapitalization, of Y&R
LP (so long as Y&R LP shall remain in existence) or, until the Holdings
Merger, Y&R Inc. (New York).
"Clients": as defined in the definition of Y&R Agent Subsidiary.
"Closing Date": the date (which must be on or prior to December 31,
1996) on which the conditions precedent set forth in subsection 7.1 shall
be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commitment": with respect to any Lender, such Lender's Term
Commitment and/or Revolving Commitment, as the case may be; collectively,
as to all the Lenders, the "Commitments".
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Company and which is treated as a single employer under Section 414 of the
Code.
"Company": Y&R Holdings, provided that, (a) upon the consummation of
the Holdings Merger, Y&R Inc. (New York) shall be the "Company" for all
purposes of this Agreement and the other Loan Documents and (b) upon the
consummation of the Company Merger, Y&R Inc. (Delaware) shall be the
"Company" for all purposes of this Agreement and the other Loan Documents.
"Company Merger": the merger of Y&R Inc. (New York) with and into
Y&R Inc. (Delaware), with Y&R Inc. (Delaware) as the surviving
corporation.
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"Consolidated": when used in connection with any term (which is not
otherwise defined), means such term as it applies to any Person and its
Subsidiaries on a consolidated basis in accordance with GAAP, after
eliminating all intercompany items.
"Continuing Letter of Credit": each letter of credit that is listed
on Schedule 6.22.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Contribution Agreement": the Agreement and Plan of Contribution,
dated October 30, 1996, among Y&R Inc. (New York), Y&R LP, Y&R Holdings,
Y&R Inc. (Delaware), the Young & Rubicam Restricted Stock Trust (as
defined therein) and the HFCP Investors, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
subsection 7.1(d).
"Control": the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative
thereto.
"Cost of Funds": with respect to any Offshore Currency, the rate of
interest determined by the Administrative Agent or the relevant Fronting
Lender in respect thereof (which determination shall be conclusive absent
manifest error) to be the cost to the Administrative Agent or such
Fronting Lender of obtaining funds denominated in such Offshore Currency
for the period or, if applicable, the relevant Interest Period or Periods
during which any relevant amount in such Offshore Currency is outstanding.
"Debt": of any Person at any date and without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than (i) current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices, (ii) deferred rent and deferred
employee compensation incurred in the ordinary course of business and
(iii) Indebtedness permitted pursuant to subsection 9.2(j)), (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture
or similar instrument, (c) all obligations of such Person under Financing
Leases, (d) all obligations of such Person in respect of letters of credit
and acceptances issued or created for the account of such Person, (e) all
liabilities of the types described in clauses (a) through (d) of this
definition secured by any Lien on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the
payment thereof and (f) all Guarantee Obligations of such Person in
respect of liabilities of the types described in clauses (a) through (e)
of this definition of another Person. The Debt of any Person shall include
the Debt of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship
with such entity, except to the extent the terms of such Debt provide that
such Person is not liable therefor.
"Debt Coverage Ratio": as of the last day of any fiscal quarter of
the Company, the ratio of (a) Consolidated Debt of the Company as of the
last day of such fiscal quarter to (b) Proportionate EBITDA of the Company
for the period of four consecutive fiscal quarters ended on the last day
of such fiscal quarter.
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"Debt Level Status": the existence of Debt ▇▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ ▇ Status, Debt Level 3 Status, Debt ▇▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇ or Debt Level 6 Status, as the case may be.
"Debt Level 1 Status": exists on an Adjustment Date if the Debt
Coverage Ratio as of the last day of the period covered by the financial
statements relating to such Adjustment Date is less than 2.00 to 1.00.
"Debt Level 2 Status": exists on an Adjustment Date if the Debt
Coverage Ratio as of the last day of the period covered by the financial
statements relating to such Adjustment Date is greater than or equal to
2.00 to 1.00 but less than 2.50 to 1.00.
"Debt Level 3 Status": exists on an Adjustment Date if the Debt
Coverage Ratio as of the last day of the period covered by the financial
statements relating to such Adjustment Date is greater than or equal to
2.50 to 1.00 but less than 3.00 to 1.00.
"Debt Level 4 Status": exists on an Adjustment Date if the Debt
Coverage Ratio as of the last day of the period covered by the financial
statements relating to such Adjustment Date is greater than or equal to
3.00 to 1.00 but less than 3.50 to 1.00.
"Debt Level 5 Status": exists on an Adjustment Date if the Debt
Coverage Ratio as of the last day of the period covered by the financial
statements relating to such Adjustment Date is greater than or equal to
3.50 to 1.00 but less than 4.00 to 1.00.
"Debt Level 6 Status": exists on an Adjustment Date if the Debt
Coverage Ratio as of the last day of the period covered by the financial
statements relating to such Adjustment Date is greater than or equal to
4.00 to 1.00.
"Default": any of the events specified in Section 10, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Designated Lenders": as defined in subsection 7.1(a).
"Direct Foreign Subsidiary": any Foreign Subsidiary all or a portion
of the Capital Stock of which is owned by the Company or one or more
Domestic Subsidiaries of the Company.
"Divestiture": as to any Person, the sale, transfer or other
disposition by such Person (in a single transaction or a series of related
transactions) of (a) the Capital Stock of any Subsidiary of such Person,
if, following such sale, transfer or other disposition, such Subsidiary
ceases to be a Subsidiary of such Person, (b) all or substantially all of
the assets of such Person and (c) assets constituting one or more business
units of such Person.
"Dollar Equivalent": at any time as to any amount denominated in an
Offshore Currency, the equivalent amount in Dollars as determined by the
Administrative Agent at such time on the basis of the Spot Rate for the
purchase of Dollars with such Offshore Currency on the most recent
Calculation Date for such Offshore Currency.
"Dollars" and "$": the lawful currency of the United States of
America.
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"Domestic Operating Subsidiary": any Operating Subsidiary which is a
Domestic Subsidiary.
"Domestic Subsidiary": any Operating Subsidiary of the Company
organized under the laws of any jurisdiction within the United States.
"EBITDA": as to any Person for any period, the amount equal to
Consolidated Net Income of such Person for such period excluding
non-operating gains or losses, plus, in each case to the extent deducted
in determining such Consolidated Net Income of such person for such
period, the sum of the following: (a) Consolidated Interest Expense of
such Person for such period, (b) Consolidated provision for income taxes
of such Person for such period, (c) Consolidated depreciation and
amortization expense of such Person for such period, (d) foreign exchange
non-cash losses associated with hyperinflationary countries, (e)
Consolidated non-cash compensation expenses attributable to stock, stock
options, restricted stock, and Related Equity Securities, (f) Consolidated
cash compensation expenses attributable to repurchases of such stock,
stock options, restricted stock and Related Equity Securities, (g)
Consolidated expenses or reserves directly associated with the
Recapitalization, (h) any amounts in respect of the minority interest of
any other Person in such Person for such period, (i) expenses or reserves
associated with (1) the sale of the New York Real Property, including the
relocation or consolidation of individuals and offices located in New York
City (whether or not occupying the New York Real Property) in connection
with, or in anticipation of, such sale, or (2) the relocation or
consolidation of individuals and offices located in New York City,
currently occupying more than 300,000 square feet (such sale and/or
relocation being referred to as the "New York Real Estate Consolidation"),
including in each case all expenses of renovating office space, (j) EBITDA
(as defined herein) for such fiscal period of any other Person which is
not wholly-owned by such Person, but which such Person reports on a
consolidated basis in accordance with GAAP, and (k) equity losses from any
other Person which is partially but not wholly-owned by such Person and
which is not consolidated for such period, minus, in each case to the
extent added in determining such Consolidated Net Income of such Person to
such Period, (i) foreign exchange non-cash gains associated with
hyperinflationary countries, (ii) any amounts in respect of the minority
interest of any other Person in such Person for such period, (iii) EBITDA
(as defined herein) for such fiscal period of any other Person which is
not wholly-owned by such Person, but which such Person reports on a
consolidated basis in accordance with GAAP, and (iv) equity gains from any
other Person which is partially but not wholly-owned by such Person and
which is not consolidated for such period. If such Person or any of its
Consolidated Subsidiaries consummates an Acquisition or Divestiture during
such period, EBITDA (and all amounts included in the calculation thereof,
including, but not limited to, Net Income and Interest Expense) for such
period shall be computed assuming that such Acquisition or Divestiture, as
the case may be, had occurred (and any Indebtedness incurred or repaid in
connection with such Acquisition or Divestiture had been incurred or
repaid) on the first day of such period.
"Eligible L/C Currency": each of the lawful currencies of Canada
(Canadian Dollar), the Republic of France (French Franc), the Federal
Republic of Germany (German ▇▇▇▇), the Republic of Italy (Italian Lira)
and the United Kingdom of Great Britain and Northern Ireland (British
Pounds Sterling).
"Eligible Offshore Currency": each of the lawful currencies of the
Republic of France (French Franc), the Federal Republic of Germany (German
▇▇▇▇) and the United Kingdom of
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Great Britain and Northern Ireland (British Pounds Sterling).
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or
the environment, as now or may at any time hereafter be in effect.
"Equity Interests": the collective reference to the Capital Stock of
Y&R Inc. (New York) and Y&R LP.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan or a Revolving Offshore Loan, the aggregate (without
duplication) of the rates (expressed as a decimal fraction, rounded
upwards to the nearest 1/100 of 1%) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
(rounded upwards to the nearest 1/32 of 1%) equal to the rate at which
BofA is offered Dollar deposits at or about 8:00 A.M., San Francisco time,
two Banking Days prior to the beginning of such Interest Period in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its Eurodollar Loans are then being
conducted for delivery on the first day of such Interest Period for the
number of days comprised therein and in an amount comparable to the amount
of its Eurodollar Loan to be outstanding during such Interest Period.
"Eurodollar Loans": Revolving Loans or Term Loans the rate of
interest applicable to which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
The Eurodollar Rate shall be adjusted automatically as to all Eurodollar
Loans then outstanding as of the effective date of any change in the
Eurocurrency Reserve Requirements.
"European Payment Agent": as defined in the Preamble to this
Agreement.
"Event of Default": any of the events specified in Section 10,
provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
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"Excess Cash Flow": for any fiscal year of the Company, commencing
with the fiscal year ending December 31, 1997, without duplication, the
excess of (a) the sum of (i) EBITDA of the Company for such fiscal year,
(ii) the amount of any refund received by the Company and its Subsidiaries
during such fiscal year on income taxes paid by the Company and its
Subsidiaries to the extent not included in EBITDA of the Company for such
fiscal year, (iii) without duplication of amounts added pursuant to this
clause (iii) or clause (iv) below, cash dividends, cash interest and other
similar cash payments received by the Company and its Subsidiaries during
such fiscal year in respect of investments to the extent not included in
EBITDA of the Company for such fiscal year (including from all Persons
which are partially owned by the Company, but are not Subsidiaries), (iv)
the sum across all Persons which are Subsidiaries but are not wholly-owned
by the Company, or by any Subsidiary of the Company, of such Persons'
EBITDA for such fiscal year, multiplied by the effective primary ownership
percentage held in such Person by the Company as of the end of such fiscal
year, (v) extraordinary cash gains to the extent subtracted or otherwise
not included in EBITDA of the Company for such fiscal year and only to the
extent not otherwise requiring a prepayment under subsection 5.4(e) and
(vi) pension expense deducted in calculating EBITDA of the Company for
such fiscal year over (b) the sum of (i) the aggregate amount of capital
expenditures made by the Company and its Subsidiaries during such fiscal
year and not financed, (ii) the aggregate amount of all reductions of the
Revolving Commitments (to the extent such reductions are required by the
terms of this Agreement to be accompanied by prepayment of Revolving
Loans) or payments or prepayments of the Term Loans during such fiscal
year other than pursuant to subsection 5.4(f), (iii) the aggregate amount
of payments of principal in respect of any Indebtedness (other than under
this Agreement) permitted hereunder during such fiscal year, (iv)
Consolidated Interest Expense of the Company paid or payable in cash
during such fiscal year, (v) the aggregate amount of cash used during such
fiscal year to pay fees described in subsection 5.1 and the fees and
expenses incurred in connection with the Recapitalization and the
financing thereof, (vi) Consolidated provision for current income taxes
for such fiscal year, (vii) extraordinary cash payments or losses by the
Company or any of its Subsidiaries to the extent not subtracted in the
determination of EBITDA of the Company for such fiscal year, (viii) cash
expenses of the Company or any of its Subsidiaries during such fiscal year
associated with the New York Real Estate Consolidation, (ix) the aggregate
amount of cash used by the Company or any of its Subsidiaries for
Investments which are permitted under Section 9.9(c), (d), (f) and (g)
made by the Company or any of its Subsidiaries during such fiscal year,
and (x) the aggregate amount of cash used to make Restricted Payments by
the Company and its Subsidiaries during such fiscal year which are
permitted pursuant to subsection 9.8, (xi) cash pension contributions
during such fiscal year and (xii) the amount of cash used to fund any
payment in respect of the matter described on Schedule 6.13 during such
fiscal year (amounts deducted pursuant to this clause (xii) shall not
exceed $25,000,000 in the aggregate for all fiscal years).
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Existing Credit Facilities": that certain Credit Agreement, dated
as of June 26, 1996, among Y&R Inc. (New York), Y&R LP, the other
borrowers party thereto, NationsBank, N.A., as Administrative Agent, The
Bank of New York, as Documentation Agent and Issuing Bank, and Credit
Lyonnais, New York Branch and Wachovia Bank of Georgia, N.A., as
Co-Agents.
"Existing Issuing Bank": each Person that has issued one or more
Continuing Letters of Credit.
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"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by
the Administrative Agent from three federal funds brokers of recognized
standing selected by it.
"Fee Payment Date": the first Banking Day of each April, July,
October and January.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"Fixed Charge Coverage Ratio": as of the last day of any fiscal
quarter of the Company, the ratio of (a) Proportionate EBITDAR of the
Company for the period of four fiscal quarters ending on the last day of
such fiscal quarter to (b) the sum of (i) Consolidated Interest Expense of
the Company, (ii) Consolidated Rental Expense of the Company and (iii)
scheduled amortization of the Term Loans and other Consolidated
Indebtedness of the Company, in each case for such period.
"Foreign Currency Protection Agreements": as to any Person, all
foreign exchange contracts, currency swap agreements or other similar
agreements or arrangements entered into in the ordinary course of business
(and not for speculative purposes) designed to protect such Person against
fluctuations in currency values.
"Foreign Subsidiary": any Operating Subsidiary of the Company
organized under the laws of any jurisdiction outside the United States of
America.
"Fronted Loan Note": as defined in subsection 5.3(g).
"Fronted Loan Participants": with respect to each Fronted Offshore
Loan, the collective reference to all Revolving Lenders.
"Fronting Lender": with respect to a particular Fronted Offshore
Currency, each Lender (or an Affiliate thereof) which executes and
delivers a Fronting Lender Addendum with respect to such Fronted Offshore
Currency, provided that, unless the Administrative Agent otherwise agrees,
there shall be no more than one Fronting Lender for any Fronted Offshore
Currency.
"Fronting Lender Addendum": a Fronting Lender Addendum,
substantially in the form of Exhibit D.
"Fronting Lender's Payment Office": in the case of payments in a
Fronted Offshore Currency, such address as such Fronting Lender may from
time to time specify for such purpose pursuant to the applicable Fronting
Lender Addendum.
"Fronted Offshore Currency": with respect to each Fronting Lender,
the Offshore Currency or Currencies specified in the applicable Fronting
Lender Addendum.
"Fronted Offshore Currency Sublimit": with respect to each Fronting
Lender and any Fronted Offshore Currency, the amount specified by such
Fronting Lender for such Fronted
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Offshore Currency in the applicable Fronting Lender Addendum.
"Fronted Offshore Currency Subfacility": the lending facility
described in subsection 4.1.
"Fronted Offshore Loans": as defined in subsection 4.1.
"FX Trading Office": the BofA Foreign Exchange Trading Desk in
Chicago, Illinois, or such other of BofA's offices as the Administrative
Agent may designate as such from time to time.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time, provided that, solely for
purposes of determining compliance with subsection 9.1 and for purposes of
the definitions of "Debt Coverage Ratio", "Interest Coverage Ratio",
"Interest Expense", "Fixed Charge Coverage Ratio", "Net Income" and "Net
Worth" (and, as used in such definitions, any other defined terms used in
such definitions), "GAAP" shall mean generally accepted accounting
principles in the United States of America as in effect on the date
hereof.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued
a reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of
the primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum
reasonably anticipated liability in respect thereof as determined by the
Company in good faith.
"Guarantees": the collective reference to the guarantee contained in
Section 11 and in the Subsidiaries Guarantee.
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"Guarantor": any Person which delivers a Guarantee pursuant to this
Agreement.
"Hedging Agreement": any Foreign Currency Protection Agreement or
Interest Rate Protection Agreement.
"HFCP Investors": the collective reference to ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Capital Partners III, L.P., a California limited partnership, H&F Orchard
Partners III, L.P., a California limited partnership, H&F International
Partners III, L.P., a California limited partnership and certain other
investors party to the Contribution Agreement on the date hereof.
"H&F Group": the collective reference to the HFCP Investors and
their Affiliates.
"Holdings Merger": the merger of Y&R Holdings with and into Y&R Inc.
(New York), with Y&R Inc. (New York) as the surviving corporation.
"Inactive Subsidiary": any Subsidiary of the Company which (and only
for so long as such Subsidiary) (a) is not then engaged in any business,
(b) does not have liabilities or obligations, and is not a party to any
litigation or other proceeding involving amounts, in excess of $500,000 in
the aggregate, (c) does not own assets with an aggregate book value in
excess of $500,000, (d) does not own any Capital Stock of any Person
(other than another Inactive Subsidiary) and (e) does not incur any
liabilities or obligations other than in connection with its continued
inactive existence or the liquidation or dissolution thereof.
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than (i) current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices and (ii) deferred rent and deferred
employee compensation incurred in the ordinary course of business), (b)
any other indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such Person under
Financing Leases, (d) all obligations of such Person in respect of letters
of credit and acceptances issued or created for the account of such
Person, (e) all liabilities secured by any Lien on any property owned by
such Person even though such Person has not assumed or otherwise become
liable for the payment thereof and (f) all obligations of such Person in
respect of Hedging Agreements. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is
liable therefor as a result of such Person's ownership interest in or
other relationship with such entity, except to the extent the terms of
such Indebtedness provide that such Person is not liable therefor. For
purposes of determining Indebtedness of any Person, the "principal amount"
of the obligations of such Person in respect of any Hedging Agreement at
any time shall be the maximum aggregate amount (giving effect to any
netting agreements) that such Person would be required to pay if such
Hedging Agreement were terminated at such time.
"Initial Consolidated Net Worth": the Consolidated Net Worth of the
Company as of March 31, 1997.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
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"Interest Coverage Ratio": as of the last day of any fiscal quarter
of the Company, the ratio of (a) Proportionate EBITDA of the Company for
the period of four fiscal quarters ending on the last day of such fiscal
quarter to (b) Consolidated Interest Expense of the Company for such
period.
"Interest Expense": of any Person for any period the amount of
interest expense, both expensed and capitalized, of such Person,
determined in accordance with GAAP, for such period, including, but not
limited to, the amortization of debt issuance costs, provided that (i)
Interest Expense for the period of four consecutive fiscal quarters ending
March 31, 1997, shall be equal to the product of (A) Interest Expense for
the fiscal quarter ending March 31, 1997 times (B) 4, (ii) Interest
Expense for the period of four consecutive fiscal quarters ending June 30,
1997, shall be equal to the product of (A) Interest Expense for the two
consecutive fiscal quarters ending June 30, 1997 times (B) 2, and (iii)
Interest Expense for the period of four consecutive fiscal quarters ending
September 30, 1997, shall be equal to the product of (A) Interest Expense
for the three consecutive fiscal quarters ending September 30, 1997 times
(B) a fraction, the numerator of which is 4 and the denominator of which
is 3.
"Interest Payment Date": (a) as to any Base Rate Loan or Swing Line
Loan, the last Banking Day of each March, June, September and December,
(b) as to any Eurodollar Loan or Revolving Offshore Loan having an
Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan or Revolving Offshore Loan having an
Interest Period longer than three months, each day which is three months,
or a whole multiple thereof, after the first day of such Interest Period
and the last day of such Interest Period and (d) as to any Fronted
Offshore Loan, the date or dates specified in the applicable Fronting
Lender Addendum.
"Interest Period": (a) with respect to any Eurodollar Loan or
Revolving Offshore Loan,
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan or Revolving Offshore Loan and ending one, two, three or six
months thereafter, as selected by the relevant Borrower in its
notice of borrowing or notice of conversion, as the case may be,
given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan or
Revolving Offshore Loan and ending one, two, three or six months
thereafter, as selected by the relevant Borrower by irrevocable
notice to the Administrative Agent not less than three Banking Days
prior to the last day of the then current Interest Period with
respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period would otherwise end on a day that
is not a Banking Day, such Interest Period shall be extended to the
next succeeding Banking Day unless the result of such extension
would be to carry such Interest Period into another calendar month
in which event such Interest Period shall end on the immediately
preceding Banking Day;
(2) any Interest Period that would otherwise extend beyond the
Revolving
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Termination Date (in the case of Revolving Loans) or beyond the date
final payment is scheduled to be due on the Term Loans (in the case
of Term Loans) shall end on the Revolving Termination Date or such
date of final payment, as the case may be; and
(3) any Interest Period that begins on the last Banking Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Banking Day of a calendar month; and
(b) with respect to any Fronted Offshore Loan, the interest
periods (if any) specified in the applicable Fronting Lender Addendum.
"Interest Rate Protection Agreements": as to any Person, all
interest rate swaps, caps or collar agreements or similar arrangements
entered into by such Person in the ordinary course of business (and not
for speculative purposes) providing for protection against fluctuations in
interest rates or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"Investment": as defined in subsection 9.9.
"Issuance Date": any Banking Day specified in a notice pursuant to
subsection 3.4 as a date on which an Issuing Bank is requested to issue a
Letter of Credit hereunder.
"Issuing Bank": initially, (a) each Lender specified on Schedule
1.1(a) as an Issuing Bank and (b) each Existing Issuing Bank listed on
Schedule 6.22, in each case in its capacity as issuer of a Letter of
Credit. Additional Lenders may from time to time be designated as "Issuing
Banks" by the Company (with the consent of such Lender and with the
consent (which shall not be unreasonably withheld) of the Administrative
Agent) by written notice to such effect from the Company to the
Administrative Agent.
"Judgment Currency": as defined in subsection 13.16(b).
"L/C Sublimit": at any time, the lesser of (a) $50,000,000 and (b)
the Revolving Commitments then in effect.
"L/C Obligations": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount (or the Dollar Equivalent
thereof, in the case of Letters of Credit issued in Offshore Currencies)
of all Letters of Credit and (b) the aggregate amount (or the Dollar
Equivalent thereof, in the case of Letters of Credit issued in Offshore
Currencies) of then unpaid Reimbursement Obligations.
"L/C Participants": with respect to each Letter of Credit, the
collective reference to all the Revolving Lenders.
"Lender": as defined in the Preamble to this Agreement, provided
that, for purposes of subsections 5.12, 5.13, 5.14 and 5.15, all Fronting
Lenders and Issuing Banks shall be deemed to be "Lenders".
"Letters of Credit": as defined in subsection 0.
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"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention
agreement and any Financing Lease having substantially the same economic
effect as any of the foregoing).
"Loan": any loan made by any Lender or Fronting Lender pursuant to
this Agreement.
"Loan Documents": this Agreement, any Notes, any Applications, the
Guarantees and the Security Documents.
"Loan Parties": the Parent Borrowers, each Subsidiary Borrower and
each other Subsidiary of the Parent Borrowers which is a party to a Loan
Document.
"Majority Lenders": at any time, Lenders the Voting Percentages of
which aggregate more than 50%.
"Majority Revolving Lenders": at any time, Revolving Lenders the
Revolving Commitment Percentages of which aggregate more than 50%.
"Majority Term Lenders": at any time, Term Lenders the Term
Commitment Percentages of which aggregate more than 50%.
"Management Investor Notes": as defined in subsection 7.1(b).
"Management Investors": as defined in the Stockholders' Agreement.
"Material Adverse Effect": a material adverse effect on (a) at any
time on or prior to the Closing Date, the Recapitalization, (b) the
business, operations, property, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole or (c) the
validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Administrative Agent or the
Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated
as such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Material Foreign Subsidiary": any Foreign Subsidiary of the Company
(a) which has liabilities or obligations, or is a party to any litigation
or other proceeding involving amounts, in excess of $2,500,000 in the
aggregate, provided that no Foreign Subsidiary shall be a Material Foreign
Subsidiary under this clause (a) unless a Borrower or any Domestic
Operating Subsidiary or other Material Foreign Subsidiary is or may be
liable for such liabilities, obligations, litigations or proceedings, or
(b) which owns assets (net of current liabilities (other than those owed
to the Company or any of its Subsidiaries) immediately prior to the
occurrence of the relevant event described in Section 10(f) with respect
to such Foreign Subsidiary) with an aggregate book value in excess of
$2,500,000.
"Material Lease": any lease, sublease, license or other occupancy
agreement (a) which involves an obligation with respect to 50,000 or more
square feet in area of real property and (b)
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to which any Borrower or any of its Subsidiaries is a party or pursuant to
which such Borrower or any such Subsidiary uses or occupies real property.
"Media and Production Vendors": as defined in the definition of Y&R
Agent Subsidiary.
"Mergers": collectively, the Holdings Merger, the Partnership Merger
and the Company Merger.
"Mortgages": the collective reference to any Parent Borrower
Mortgages and any Subsidiary Mortgages.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Negotiated Rate": an interest rate agreed upon by the relevant
Parent Borrower and the Swing Line Lender.
"Negotiated Rate Loan": a Swing Line Loan that bears interest at the
Negotiated Rate for an interest period (not to exceed 30 days) to be
agreed upon by the relevant Parent Borrower and the Swing Line Lender.
"Net Income": as to any Person for any period, the net income of
such Person and its Consolidated Subsidiaries as determined in accordance
with GAAP for such period.
"Net Proceeds": (a) with respect to any sale, lease or other
disposition of assets (other than inventory sold, leased or otherwise
disposed of in the ordinary course of business) by any Loan Party or any
of its Subsidiaries, the net amount equal to the aggregate amount received
in cash (including any cash received by way of deferred payment pursuant
to a note receivable, other non-cash consideration or otherwise, but only
as and when such cash is so received) in connection with such sale or
other disposition minus the sum of (i) the reasonable and documented fees,
commissions and other out-of-pocket expenses (including, without
limitation, fees and expenses of attorneys, accountants, appraisers, title
examiners, service companies and environmental consultants) incurred by
such Loan Party and its Subsidiaries and payable to Persons other than
Affiliates of such Loan Party in connection with such sale or other
disposition (including, in connection with the repayment or amendment of
any Indebtedness which is secured in whole or in part by such assets) and
(ii) federal, state, local and foreign taxes incurred by such Loan Party
and its Subsidiaries in connection with such sale;
(b) with respect to any issuance of any Indebtedness or Capital
Stock by any Loan Party or any of its Subsidiaries, the net amount equal
to the aggregate amount received in cash (including any cash received by
way of deferred payment pursuant to a note receivable, other non-cash
consideration or otherwise, but only as and when such cash is so received)
in connection with such issuance minus the reasonable and documented fees,
commissions and other out-of-pocket expenses incurred by such Loan Party
and its Subsidiaries in connection with such issuance; and
(c) with respect to proceeds received by any Loan Party or any of
their Subsidiaries in respect of a Casualty Event, the amount of such
proceeds minus (i) the reasonable and documented out-of-pocket fees and
expenses incurred by such Loan Party and its Subsidiaries in
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connection with the collection of such proceeds and (ii) any such proceeds
received in respect of insurance which are required to be paid to any
co-insured Persons or other loss payees with respect to such insurance.
"Net Worth": of any Person, as of the date of determination thereof,
all items which in conformity with GAAP would be included under
shareholders' equity on a consolidated balance sheet of such Person and
its Consolidated Subsidiaries at such date of determination; provided that
the "Net Worth" of any Person shall not include the effects of any (a)
non-cash compensation charges after the Closing Date or any charges or
losses relating to the sale of the New York Real Property, (b) any foreign
currency translation adjustments and (c) adjustments in respect of pension
plan liabilities.
"New York Real Estate Consolidation": as defined in the definition
of EBITDA.
"New York Real Property": the real property owned by Y&R Inc. (New
York) located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
"Non-Excluded Taxes": as defined in subsection 5.14.
"Non-Executing Persons": as defined in subsection 7.1(a).
"Notes": the collective reference to the Fronted Loan Notes, the
Revolving Notes, the Swing Line Note and the Term Notes.
"Obligations": the unpaid principal of and interest on the Fronted
Offshore Loans and all other obligations and liabilities of the Subsidiary
Borrowers to the Administrative Agent, the Lenders and the Fronting
Lenders (including, without limitation, interest accruing at the then
applicable rate provided in this Agreement after the maturity of the
Fronted Offshore Loans and interest accruing at the then applicable rate
provided in this Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the relevant Subsidiary Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding),
whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out of, or
in connection with, this Agreement, the other Loan Documents, or any other
document made, delivered or given in connection herewith or therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the
Administrative Agent or any Lender that are required to be paid by the
Subsidiary Borrowers pursuant to the terms of this Agreement or any other
Loan Document).
"Offers": as defined in subsection 7.1(c).
"Offshore Base Rate": with respect to each day during each Interest
Period pertaining to a Revolving Offshore Loan, the rate of interest per
annum (rounded upwards to the nearest 1/32 of 1%) determined by the
Administrative Agent as the rate at which deposits in the applicable
Eligible Offshore Currency in the approximate amount of BofA's Revolving
Offshore Loan for such Interest Period would be offered by BofA London (or
such other office as may be designated for such purpose by BofA), to major
banks in the London interbank market at their request at approximately
11:00 a.m. (London time) two Banking Days prior to the commencement of
such Interest Period.
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"Offshore Currency": a currency other than Dollars that is freely
tradeable or exchangeable into Dollars.
"Offshore Currency Equivalent": at any time as to any amount
denominated in Dollars, the equivalent amount in the relevant Offshore
Currency or Currencies as determined by the Administrative Agent at such
time on the basis of the Spot Rate for the purchase of such Offshore
Currency or Currencies with Dollars on the date of determination thereof.
"Offshore Currency Loans": Loans denominated in an Offshore
Currency.
"Offshore Currency Sublimit": at any time, (a) as to all Offshore
Currency Loans, the lesser of (i) $175,000,000 and (ii) the Revolving
Commitments then in effect and (b) as to Offshore Currency Loans
denominated in the same Offshore Currency, the lesser of (i) if such
Offshore Currency is (A) an Eligible Offshore Currency or (B) Canadian
Dollars or Italian Lira, $75,000,000, or, if such Offshore Currency is any
other Offshore Currency, $25,000,000 and (ii) the Revolving Commitments
then in effect.
"Offshore Rate": with respect to each day during each Interest
Period pertaining to a Revolving Offshore Loan, a rate per annum
determined for such day in accordance with the following formula (rounded
upward to the nearest 1/100th of 1%):
Offshore Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
The Offshore Rate shall be adjusted automatically as to all Revolving
Offshore Rate Loans then outstanding as of the effective date of any
change in the Eurocurrency Reserve Requirements.
"Operating Subsidiary": any Subsidiary other than an Inactive
Subsidiary.
"Outstanding Notes": (i) $32.0 million in original principal amount
of 8.75% Guaranteed Notes due January 16, 1999 issued pursuant to that
certain Amended and Restated Guaranteed Senior Note Agreement dated as of
July 15, 1994 and (ii) $100.0 million in original principal amount of
7.01% Guaranteed Notes due February 15, 2006 issued pursuant to that
certain Guaranteed Senior Note Agreement dated as of February 15, 1996.
"Outstanding Swing Line Loans": as defined in subsection 3.12(b).
"Parent Borrower": as defined in the Preamble to this Agreement.
"Parent Borrower Mortgage": a Mortgage, substantially in the form of
Exhibit E or such other form as shall be reasonably acceptable to the
Administrative Agent and the Company, with respect to the New York Real
Property and any other parcel of real property owned by a Parent Borrower
upon which a Mortgage is granted in accordance with subsection 8.10, as
the same may be amended, supplemented or otherwise modified from time to
time.
"Parent Borrower Pledge Agreement": the Pledge Agreement to be
executed and delivered by the Parent Borrowers, substantially in the form
of Exhibit F, as the same may be amended, supplemented or otherwise
modified from time to time.
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"Parent Borrower Security Agreement": the Security Agreement to be
executed and delivered by the Parent Borrowers, substantially in the form
of Exhibit G, as the same may be amended, supplemented or otherwise
modified from time to time.
"Parent Borrower Security Documents": the collective reference to
any Parent Borrower Mortgages, the Parent Borrower Pledge Agreement and
the Parent Borrower Security Agreement.
"Participant": as defined in subsection 13.6(b).
"Partnership Merger": the merger of a Subsidiary of Y&R Holdings
with and into Y&R LP, with Y&R LP as the surviving entity.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Investments": the collective reference to Investments
permitted pursuant to subsection 9.9(c).
"Person": an individual, partnership, corporation, business trust,
joint stock company, limited liability company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pledge Agreements": the collective reference to the Parent Borrower
Pledge Agreement and the Subsidiaries Pledge Agreement.
"Properties": as defined in subsection 6.17.
"Proportionate EBITDA": of the Company for any period, the sum of
(a) EBITDA of the Company, for such period, plus (b) the sum across all
Persons which are partially but not wholly-owned by the Company (or by any
other Person which is partially but not wholly owned by the Company) of
such Person's EBITDA, for such period, multiplied by the effective primary
ownership percentage held in such Person by the Company at the "as of"
date for computing Proportionate EBITDA. EBITDA associated with any Person
(or interests therein) or businesses acquired after the Closing Date will
be included for the purposes of calculating Proportionate EBITDA, and
EBITDA associated with any Person (or interests therein) or business sold
after the Closing Date will be deducted from Proportionate EBITDA, in each
case as if such transaction occurred at the beginning of the relevant
period.
"Proportionate EBITDAR": of the Company for any period, the amount
equal to Proportionate EBITDA of the Company for such period plus
Consolidated Rental Expense of the Company (calculated without giving
effect to clause (b) of the definition thereof) for such period.
"Recapitalization": the resulting ownership of the Parent Borrowers
after the
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consummation of the transactions contemplated by subsections 7.1(b),
7.1(c) and 7.1(e).
"Recapitalization Documentation": as defined in subsection 7.1(d).
"Reference Rate": the rate of interest in effect for such day as
publicly announced from time to time by BofA in San Francisco, California,
as its "reference rate." The "reference rate" is a rate set by BofA based
upon various factors including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such
announced rate. Any change in the reference rate announced by BofA shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Refinancing": as defined in subsection 7.1(w).
"Register": as defined in subsection 13.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reimbursement Obligation": the obligation of the Borrowers to
reimburse the relevant Issuing Bank pursuant to subsection 0 for amounts
drawn under Letters of Credit issued by such Issuing Bank.
"Related Equity Securities": as to any Person, all options, warrants
or other rights to acquire, or obligations to issue, shares of Capital
Stock of, equity interests in, or partnership interests in, such Person,
or similar securities or contractual obligations the value of which is
derived from the value of an equity interest in such Person, or securities
convertible into or exchangeable for Capital Stock of, equity interests
in, partnership interests in, or similar securities or contractual
obligations of, such Person.
"Remaining Equity Interests": all Equity Interests (together with
interest payable with respect thereto) which are not purchased on the
Closing Date pursuant to the Offers and which are not contributed to the
Company by the Management Investors on or prior to the Closing Date.
"Rental Expense": of any Person for any period, the sum of (a) the
aggregate amount of fixed and contingent rental expense of such Person for
such period determined in accordance with GAAP with respect to leases of
real and personal property, net of rental income from any sublease
arrangements and (b) any cash payments resulting in a reduction in the
lease loss reserve in respect of the New York Real Property.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the thirty day notice period
is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
ss. 2615.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents
of such Person, and any law, treaty, rule or
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regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Reset Date": as defined in subsection 5.5.
"Responsible Officer": as to any Person, the chief executive
officer, the president, any member of the management committee of such
Person or any other officer of such Person designated as such in writing
by the Company or, with respect to financial matters, the chief financial
officer, the chief accounting officer or the treasurer of such Person.
"Revolving Commitment": of any Lender at any date, the obligation of
such Lender at such date to (a) make Revolving Loans, (b) issue or
participate in Letters of Credit, (c) participate in Fronted Offshore
Loans and (d) participate in Swing Line Loans, in an aggregate principal
and/or face amount at any one time outstanding not to exceed the amount
set forth opposite such Lender's name on Schedule 1.1(a); collectively, as
to all such Lenders, the "Revolving Commitments".
"Revolving Commitment Percentage": with respect to each Revolving
Lender, (a) at any time prior to the termination of the Revolving
Commitments, the percentage which such Revolving Lender's Revolving
Commitment then constitutes of the Aggregate Revolving Commitment at such
time and (b) at any time after the termination of the Revolving
Commitments, the percentage which (i) the sum of (A) the principal amount
(or the Dollar Equivalent thereof, in the case of Offshore Currency Loans)
of such Lender's Loans (other than Swing Line Loans and Fronted Offshore
Loans) then outstanding plus (B) the product of such Revolving Lender's
Revolving Commitment Percentage immediately prior to the termination of
the Revolving Commitments (after giving effect to any permitted assignment
pursuant to subsection 13.6) times the sum of the L/C Obligations and the
aggregate principal amount (or the Dollar Equivalent thereof, in the case
of Fronted Offshore Loans) of Swing Line Loans and Fronted Offshore Loans
of all the Lenders then outstanding then constitutes of (ii) the sum of
(x) the aggregate principal amount (or the Dollar Equivalent thereof, in
the case of Offshore Currency Loans) of Revolving Loans, Swing Line Loans
and Fronted Offshore Loans then outstanding plus (y) the aggregate L/C
Obligations of all the Lenders then outstanding.
"Revolving Commitment Period": the period from (and including) the
Closing Date to (but not including) the Revolving Termination Date or such
earlier date upon which the Revolving Commitments are terminated as
provided herein.
"Revolving Lender": any Lender with an unused Revolving Commitment
and/or any Revolving Loans outstanding hereunder; collectively, the
"Revolving Lenders".
"Revolving Loan": as defined in subsection 3.1(a).
"Revolving Note": as defined in subsection 5.3(g).
"Revolving Offshore Loan": Revolving Loans denominated in an
Eligible Offshore Currency the rate of interest applicable to which is
based upon the Offshore Rate with respect to such Eligible Offshore
Currency.
"Revolving Termination Date": March 31, 2003.
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"Second Drawdown Date": a Business Day during the Term Commitment
Period specified in a notice of borrowing delivered pursuant to subsection
2.2.
"Security Agreements": the collective reference to the Parent
Borrower Security Agreement and the Subsidiaries Security Agreement.
"Security Documents": the collective reference to this Agreement,
the Mortgages, the Security Agreements, the Pledge Agreements and all
other security documents hereafter delivered to the Administrative Agent
granting a Lien on any asset or assets of any Person to secure the
obligations and liabilities of the Borrowers hereunder and under any of
the other Loan Documents or to secure any guarantee of any such
obligations and liabilities.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of
any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the
amount of all "liabilities of such Person, contingent or otherwise", as of
such date, as such quoted terms are determined in accordance with
applicable federal and state laws governing determinations of the
insolvency of debtors, (b) the present fair saleable value of the assets
of such Person will, as of such date, be greater than the amount that will
be required to pay the liability of such Person on its debts as such debts
become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they
mature. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or
not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or
unsecured.
"Special Compensation Arrangements": as defined in subsection
7.1(c).
"Spot Rate": (a) as to any Eligible Offshore Currency, the rate
quoted by BofA as the spot rate for the purchase by BofA of Dollars with
such Eligible Offshore Currency or the purchase by BofA of such Eligible
Offshore Currency with Dollars, as the case may be, through its FX Trading
Office at approximately 8:00 a.m. (San Francisco time) on such date as of
which the foreign exchange computation is made for delivery two Banking
Days later and (b) as to any Fronted Offshore Currency, the rate quoted by
the relevant Fronting Lender as the spot rate for the purchase by such
Fronting Lender of Dollars with such Fronted Offshore Currency or the
purchase by such Fronting Lender of such Fronted Offshore Currency with
Dollars, as the case may be, at the time specified in such Fronting
Lender's Fronting Lender Addendum and on such date as of which the foreign
exchange computation is made for delivery two Banking Days later.
"Stockholders' Agreement": the Stockholders' Agreement, dated as of
December 12, 1996, by and among the HFCP Investors, the Management
Investors, the Management Voting Trust (as defined therein), the Director
Investors (as defined therein), Y&R Holdings, Y&R Inc. (New York), and Y&R
Inc. (Delaware), as the same may be amended, supplemented or
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otherwise modified from time to time in accordance with subsection 7.1(d).
"Subsidiaries Guarantee": the Guarantee to be executed and delivered
by each Domestic Subsidiary (other than Summit and any Y&R Agent
Subsidiary) and certain Foreign Subsidiaries, substantially in the form of
Exhibit H, as the same may be amended, supplemented or otherwise modified
from time to time.
"Subsidiaries Pledge Agreement": the Pledge Agreement to be executed
and delivered by the Domestic Subsidiaries and Foreign Subsidiaries
parties thereto, substantially in the form of Exhibit I, as the same may
be amended, supplemented or otherwise modified from time to time.
"Subsidiaries Security Agreement": the Security Agreement to be
executed and delivered by each Domestic Subsidiary (other than Summit and
any Y&R Agent Subsidiary), substantially in the form of Exhibit J, as the
same may be amended, supplemented or otherwise modified from time to time.
"Subsidiaries Security Documents": the collective reference to any
Subsidiary Mortgages, the Subsidiaries Pledge Agreement and the
Subsidiaries Security Agreement.
"Subsidiary": as to any Person, a corporation, partnership or other
entity (a) of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, directly
or indirectly through one or more intermediaries, or both, by such Person
or (b) the accounts of which would be consolidated with those of such
Person in such Person's Consolidated financial statements if such
financial statements were prepared in accordance with GAAP at such time.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Company.
"Subsidiary Borrower": at any time, any Foreign Subsidiary of the
Company designated as a Subsidiary Borrower by the Company pursuant to
subsection 5.17 that has not ceased to be a Subsidiary Borrower pursuant
to such subsection or Section 10.
"Subsidiary Mortgage": a Mortgage, in such form as shall be
reasonably acceptable to the Administrative Agent and the relevant
Domestic Subsidiary, with respect to each parcel of real property owned by
a Domestic Subsidiary upon which a Mortgage is granted in accordance with
subsection 8.10, as the same may be amended, supplemented or otherwise
modified from time to time.
"Summit": Summit Insurance Company, a Subsidiary of the Parent
Borrowers.
"Swing Line Commitment": at any time, the obligation of the Swing
Line Lender to make Swing Line Loans pursuant to subsection 3.11.
"Swing Line Lender": BofA, in its capacity as provider of the Swing
Line Loans.
"Swing Line Loans": as defined in subsection 3.11.
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"Swing Line Loan Participation Certificate": a certificate,
substantially the form of Exhibit L.
"Swing Line Note": as defined in subsection 5.3(g).
"Term Loan": as defined in subsection 2.1.
"Term Commitment": of any Lender at any time, the obligation of such
Lender at such time to make Term Loans to the Parent Borrowers in an
aggregate principal amount not to exceed the amount set forth opposite
such Lender's name on Schedule 1.1(a); collectively, as to all such
Lenders, the "Term Commitments".
"Term Commitment Percentage": at any time with respect to each Term
Lender, the percentage which (a) the sum of (i) such Term Lender's then
unused Term Commitment and (ii) the principal amount of such Term Lender's
then outstanding Term Loans, then constitutes of (b) the sum of (i) the
aggregate then unused Term Commitments of all the Term Lenders and (ii)
the aggregate principal amount of the then outstanding Term Loans of all
the Term Lenders.
"Term Commitment Period": the period from (and including) the
Closing Date to (and including) the first to occur of the Second Drawdown
Date and March 30, 1997 or such earlier date upon which the Term
Commitments are terminated as provided herein.
"Term Lender": any Lender with an unused Term Commitment hereunder
and/or any Term Loans outstanding hereunder; collectively, the "Term
Lenders".
"Term Note": as defined in subsection 5.3(g).
"Title Insurance Company": as defined in subsection 7.1(r).
"Tranche": the collective reference to Eurodollar Loans or Revolving
Offshore Loans of the same currency the then current Interest Periods with
respect to all of which begin on the same date and end on the same later
date (whether or not such Loans shall originally have been made on the
same day); Tranches may be identified as "Eurodollar Tranches" or
"Offshore Tranches", as the case may be.
"Transferee": as defined in subsection 13.6(f).
"Type": as to any Loan, its nature as a Base Rate Loan, a Eurodollar
Loan, Revolving Offshore Loan or Fronted Offshore Loan.
"UCC Filing Collateral": Collateral (other than fixtures) as to
which filing financing statements under the applicable Uniform Commercial
Code is an effective method of perfection of a security interest in such
Collateral.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended or replaced from time to time.
"Voting Percentage": as to any Lender (a) at any time prior to the
termination of the Revolving Commitments, the percentage which (i) the sum
of (x) such Lender's Revolving
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Commitment plus (y) such Lender's unused Term Commitment plus (z) the
outstanding principal amount of such Lender's Term Loans then constitutes
of (ii) the sum of (x) the Revolving Commitment plus (y) the Available
Term Commitment plus (z) the aggregate principal amount of Term Loans of
all the Term Lenders then outstanding, and (b) at any time after the
termination of the Revolving Commitments, the percentage which (i) the sum
of (x) the principal amount (or the Dollar Equivalent thereof, in the case
of Offshore Currency Loans) of such Lender's Loans (other then Swing Line
Loans and Fronted Offshore Loans) then outstanding plus (y) the product of
such Lender's Revolving Commitment Percentage times the sum of the L/C
Obligations and the aggregate principal amount (or the Dollar Equivalent
thereof, in the case of Fronted Offshore Loans) of Swing Line Loans and
Fronted Offshore Loans then outstanding then constitutes of (ii) the sum
of (x) the aggregate principal amount (or the Dollar Equivalent thereof,
in the case of Offshore Currency Loans) of Loans of all the Lenders then
outstanding plus (y) the aggregate L/C Obligations of all the Lenders then
outstanding.
"Y&R Agent Subsidiary": any Domestic Subsidiary of any Borrower
which is designated as such in writing by the Parent Borrowers to the
Administrative Agent and which satisfies the following conditions: (a)
except as permitted pursuant to clause (d) below, (i) the assets of such
Subsidiary shall consist solely of amounts owed by Persons (other than the
Borrowers and Subsidiaries of the Borrowers) ("Clients") to such Y&R Agent
Subsidiary in respect of media and production orders placed by any
Borrower or any Subsidiary of any Borrower on behalf of or at the request
of such Clients which amounts are expected to be paid by such Subsidiary
to the Person or Persons which performed or exhibited the advertising
pursuant to such media and production orders ("Media and Production
Vendors"), and (ii) the liabilities of such Subsidiary shall consist
solely of the obligation to pay amounts owed in respect of media and
production orders placed by any Borrower or any Subsidiary of any Borrower
on behalf of or at the request of such Clients to the Media and Production
Vendors which performed such media and production orders; (b) such
Subsidiary shall not invoice any Client for or collect from any Client any
amounts other than amounts which such Subsidiary expects to pay to Media
and Production Vendors in respect of media and production orders placed by
any Borrower or any Subsidiary of any Borrower on behalf of or at the
request of such Clients and such Subsidiary shall not be entitled to, and
shall not, invoice or collect any amount owed by Clients in respect of
service charges, commissions and other amounts which are not expected to
paid to Media and Production Vendors (including, but not limited to,
amounts which would be reflected on a Consolidated statement of income of
the Company); (c) such Subsidiary shall use amounts collected by it from
Clients to satisfy the obligations owed to Media and Production Vendors
which were expected to be satisfied with such amounts at the time such
amounts were collected; and (d) such Subsidiary shall not (i) engage in
any business, other than as expressly contemplated under this definition,
(ii) own any assets, other than as expressly contemplated under this
definition, (iii) incur, assume or suffer to exist any Indebtedness or
other liabilities or obligations (including, but not limited to, Guarantee
Obligations), other than as expressly contemplated under this definition
and as permitted pursuant to subsection 9.2(b), (iv) incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, or (v) make any Investments,
other than as permitted pursuant to subsection 9.9(b), 9.9(f) and 9.9(g).
"Y&R Holdings": as defined in the Preamble to this Agreement.
"Y&R Inc. (Delaware)": as defined in the Preamble to this Agreement.
"Y&R Inc. (New York)": as defined in the Preamble to this Agreement.
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"Y&R LP": as defined in the Preamble to this Agreement.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any other Loan Document or any certificate or other document made
or delivered pursuant hereto.
(b) As used herein and in any other Loan Document, and any
certificate or other document made or delivered pursuant hereto, accounting
terms relating to the Parent Borrowers and their Subsidiaries not defined in
subsection 1.1 and accounting terms partly defined in subsection 1.1, to the
extent not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) Each determination of an amount hereunder that requires the
conversion of a currency into another currency shall be based on the Spot Rate
for such currency in effect as of the most recent applicable Calculation Date
preceding the date of such determination.
(e) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF TERM COMMITMENTS
2.1 Term Loans. Subject to the terms and conditions hereof, each
Term Lender severally agrees to make a term loan (each, a "Term Loan") to the
Parent Borrowers (i) on the Closing Date in an amount up to such Term Lender's
Term Commitment Percentage of $265,000,000 or such lesser amount as shall be
requested by the Parent Borrowers pursuant to subsection 2.2 and (ii) on the
Second Drawdown Date in an amount equal to such Term Lender's Term Commitment
Percentage of the then Available Term Commitment. Subject to subsection 5.7, the
Term Loans may from time to time be (a) Eurodollar Loans, (b) Base Rate Loans or
(c) a combination thereof, as determined by the Company and notified to the
Administrative Agent in accordance with subsections 2.2 and 5.6.
2.2 Procedure for Term Loan Borrowing. The Parent Borrowers may
borrow under the Term Commitments during the Term Commitment Period on the
Closing Date and on the Second Drawdown Date, provided that the Parent Borrowers
shall give the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to 8:30 A.M., San Francisco time, (a)
three Banking Days prior to the requested Borrowing Date, if all or any part of
the requested Term Loans are to be initially Eurodollar Loans or (b) one Banking
Day prior to the requested Borrowing Date, otherwise), specifying (i) the amount
to be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing
is to be of Eurodollar Loans, Base Rate Loans or a combination thereof and (iv)
if the borrowing is to be entirely or partly of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the initial
Interest Periods therefor. Each borrowing under the Term Commitments shall be in
an amount equal to (x) in the case of Base Rate Loans, $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and (y) in the case of Eurodollar
Loans, $10,000,000 or a whole multiple of $1,000,000 in excess thereof,
provided, further, that Y&R (Delaware) may not borrow under the Term Commitments
prior to the consummation of the Company Merger. Upon receipt of any such notice
from the Parent Borrowers, the Administrative Agent shall promptly notify each
Lender
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thereof. Each Term Lender will make the amount of its pro rata share of the Term
Loans available to the Administrative Agent for the account of the Parent
Borrowers at the Administrative Agent's Payment Office prior to 10:00 A.M., San
Francisco time, on the Closing Date or the Second Drawdown Date, as the case may
be, in Dollars and in funds immediately available to the Administrative Agent.
The Administrative Agent shall credit the account of the Parent Borrower
specified in the relevant notice of borrowing on the books of such office of the
Administrative Agent on the related Borrowing Date, with the aggregate of the
amounts made available to the Administrative Agent by the Term Lenders and in
like funds as received by the Administrative Agent.
SECTION 3. AMOUNT AND TERMS OF REVOLVING COMMITMENTS
3.1 Revolving Commitments. (a) Subject to the terms and conditions
hereof, each Revolving Lender severally agrees to make revolving credit loans
("Revolving Loans") to the Borrowers from time to time during the Revolving
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Revolving Lender's Revolving Commitment Percentage of
the sum of the then outstanding L/C Obligations, the aggregate principal amount
of then outstanding Swing Line Loans and the Dollar Equivalent of the then
outstanding principal amount of Fronted Offshore Loans (after giving effect to
the use of proceeds of such Revolving Loans), does not exceed the amount of such
Revolving Lender's Revolving Commitment and provided that, after giving effect
to such Revolving Loan and the use of proceeds thereof, (i) the Dollar
Equivalent of the aggregate outstanding principal amount of Offshore Currency
Loans does not exceed the Offshore Currency Sublimit for all Offshore Currency
Loans, (ii) the Dollar Equivalent of the aggregate outstanding principal amount
of Offshore Currency Loans in any Offshore Currency does not exceed the Offshore
Currency Sublimit for Offshore Currency Loans in such Offshore Currency and
(iii) the aggregate outstanding principal amount of all Revolving Loans made in
Dollars to any Subsidiary Borrower shall not, together with the Dollar
Equivalent of all outstanding Revolving Offshore Loans made to such Subsidiary
Borrower, exceed $75,000,000. During the Revolving Commitment Period, each
Borrower may use the Revolving Commitments by borrowing, prepaying the Revolving
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) Subject to subsection 5.7, the Revolving Loans may from time to
time be (i) Eurodollar Loans, (ii) Base Rate Loans, (iii) (subject to the
limitations set forth herein) Revolving Offshore Loans or (iv) a combination
thereof, as determined by the Company and notified to the Administrative Agent
in accordance with subsections 3.2 and 5.6, provided that no Revolving Loan
shall be made as a Eurodollar Loan or a Revolving Offshore Loan after the day
that is one month prior to the Revolving Termination Date.
3.2 Procedure for Revolving Borrowing. Each Borrower may borrow
under the Revolving Commitments during the Revolving Commitment Period on any
Banking Day, provided that the Company shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 8:30 A.M., San Francisco time, (a) three Banking Days prior to the
requested Borrowing Date, if all or any part of the requested Revolving Loans
are to be initially Eurodollar Loans, (b) four Banking Days prior to the
requested Borrowing Date, if all or any part of the requested Revolving Loans
are to be initially Revolving Offshore Loans or (c) one Banking Day prior to the
requested Borrowing Date, otherwise), specifying (i) the amount to be borrowed,
(ii) the requested Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, Base Rate Loans, Revolving Offshore Loans or a combination
thereof and (iv) if the borrowing is to be entirely or partly of Eurodollar
Loans or Revolving Offshore Loans, the respective amounts of each such Type of
Loan and the respective lengths of the initial Interest Periods therefor and, in
the case of Revolving Offshore Loans, the type and amount of the Eligible
Offshore Currency or Currencies in which such Loans are to be
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denominated. Each borrowing under the Revolving Commitments shall be in an
amount equal to (x) in the case of Base Rate Loans, $5,000,000 or a whole
multiple of $1,000,000 in excess thereof (or, if the then Available Revolving
Commitment is less than $5,000,000, such lesser amount) and (y) in the case of
Eurodollar Loans or Revolving Offshore Loans, $5,000,000 (or the Offshore
Currency Equivalent thereof, in the case of Revolving Offshore Loans) or a whole
multiple of $1,000,000 (or 1,000,000 units of the relevant Eligible Offshore
Currency, in the case of Revolving Offshore Loans) in excess thereof, provided,
further, that Y&R (Delaware) may not borrow under the Revolving Commitments
prior to the consummation of the Company Merger. Upon receipt of any such notice
from the Company, the Administrative Agent shall promptly notify each Lender
and, if such notice relates to a borrowing of Revolving Offshore Loans, the
European Payment Agent thereof. Each Lender will make the amount of its pro rata
share of each borrowing available to the Administrative Agent or, in the case of
Revolving Offshore Loans, the European Payment Agent, for the account of the
relevant Borrower at the Administrative Agent's Payment Office prior to 11:00
A.M., local time of such office, on the Borrowing Date requested by the Company
in funds immediately available to the Administrative Agent in Dollars or in the
Eligible Offshore Currency, as the case may be, of such borrowing. Such
borrowing will then be made available to the relevant Borrower by the
Administrative Agent or the European Payment Agent, as the case may be,
crediting the account of the relevant Borrower on the books of such office with
the aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent.
3.3 L/C Commitment. (a) Subject to the terms and conditions hereof,
each Issuing Bank, in reliance on the agreements of the other Revolving Lenders
set forth in subsection 3.6 agrees to issue letters of credit ("Letters of
Credit") for the account of the Parent Borrowers (and, if such Letter of Credit
is issued for the benefit of any Subsidiary, for the account of the Parent
Borrowers and such Subsidiary, jointly and severally) on any Business Day during
the Revolving Commitment Period in such form as may be approved from time to
time by such Issuing Bank; provided that (i) no Issuing Bank shall have any
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (A) the L/C Obligations at such time would exceed the L/C Sublimit or
(B) the Aggregate Outstanding R/C Extensions of Credit at such time would exceed
the Aggregate Revolving Commitment at such time and (ii) no Issuing Bank shall
issue any Letter of Credit unless it shall have received notice from the
Administrative Agent that the issuance of such Letter of Credit will not violate
clause (i) above. Each Continuing Letter of Credit shall be deemed to be issued
under this Agreement on the Closing Date (to the extent such Continuing Letter
of Credit has not been fully drawn or has not expired or been terminated as of
the Closing Date) and shall be a Letter of Credit for all purposes hereof (other
than subsection 3.4) and the other Loan Documents.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars, an Eligible L/C Currency or such
other Offshore Currency as the Company, the relevant Issuing Bank and the
Administrative Agent may from time to time agree, and shall be either (A)
a standby letter of credit issued to support obligations of the Company or
any of its Subsidiaries, contingent or otherwise, or (B) a commercial
letter of credit issued in respect of the purchase of inventory or other
goods or services by the Company or any of its Subsidiaries in the
ordinary course of business, and
(ii) expire no later than the earlier of (A) 30 calendar days prior
to the Revolving Termination Date and (B) one year after the date of
issuance thereof, provided that, subject to the immediately preceding
clause (A), any standby Letter of Credit may, at the request of the
Company as set forth in the applicable Application, be automatically
extended on each anniversary of the issuance thereof for an additional
period of one year unless the Issuing Bank which issued such Letter of
Credit shall have given prior written notice to the Company and the
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beneficiary of such Letter of Credit that such Letter of Credit will not
be extended.
(c) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(d) No Issuing Bank shall at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause such
Issuing Bank or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.4 Procedure for Issuance of Letters of Credit. The Company may
from time to time request that an Issuing Bank issue a Letter of Credit by (a)
delivering to such Issuing Bank at its address for notices specified herein in
such manner as may be agreed by or be acceptable to such Issuing Bank (including
by electronic transmission) an application therefor, completed to the
satisfaction of such Issuing Bank, and such other certificates, documents and
other papers and information as such Issuing Bank may request and (b)
concurrently delivering a notice to the Administrative Agent that such Letter of
Credit has been requested. Upon receipt of any such application, each Issuing
Bank agrees to process such application and the certificates, documents and
other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall such Issuing Bank be required to
issue any Letter of Credit earlier than three Business Days after its receipt of
the application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed by such
Issuing Bank and the Company with respect thereto. Each Issuing Bank shall
furnish a copy of each Letter of Credit issued by such Issuing Bank to the
Company and the Administrative Agent promptly following the issuance thereof.
The Administrative Agent shall furnish a copy of each such Letter of Credit to
each Revolving Lender promptly following receipt thereof. The Administrative
Agent shall deliver to each L/C Participant on the last Banking Day of each
calendar month and on each Fee Payment Date a report setting forth for such
period the aggregate daily stated amount available to be drawn under the Letters
of Credit issued by all Issuing Banks that were outstanding during such period.
3.5 Letter of Credit Fees, Commissions and Other Charges. (a) The
Parent Borrowers (or, if a Letter of Credit is issued for the benefit of any
Subsidiary, the Parent Borrowers and such Subsidiary, jointly and severally)
shall pay to the relevant Issuing Bank with respect to each Letter of Credit
issued by such Issuing Bank under this Agreement, for the account of such
Issuing Bank, a fronting fee with respect to the period from the date of
issuance of such Letter of Credit to the expiration or termination date of such
Letter of Credit, computed at a rate of 1/8% per annum on the average aggregate
amount available to be drawn under such Letter of Credit during the period for
which such fee is calculated. Such fronting fee shall be payable in arrears on
each Fee Payment Date to occur after the issuance of such Letter of Credit and
on the Revolving Termination Date (or on such earlier date as the Revolving
Commitments shall terminate as provided herein) and shall be nonrefundable.
(b) The Parent Borrowers (or, if a Letter of Credit is issued for
the benefit of any Subsidiary, the Parent Borrowers and such Subsidiary, jointly
and severally) shall pay to the Administrative Agent, for the account of the L/C
Participants, a letter of credit commission with respect to each Letter of
Credit issued under this Agreement with respect to the period from the date of
issuance of such Letter of Credit to the expiration or termination date of such
Letter of Credit, computed at a rate per annum equal to the Applicable Margin in
respect of Eurodollar Loans from time to time in effect on the average aggregate
amount available to be drawn under such Letter of Credit during the period for
which such fee is calculated. Such commission shall be shared ratably among the
L/C Participants in accordance with their respective Revolving Commitment
Percentages. Such commission shall be payable in arrears on each Fee Payment
Date to occur after the issuance of such Letter of Credit and on
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the Revolving Termination Date (or on such earlier date as the Revolving
Commitments shall terminate as provided herein) and shall be nonrefundable.
(c) In addition to the foregoing fees and commissions, the Parent
Borrowers (or, if a Letter of Credit is issued for the benefit of any
Subsidiary, the Parent Borrowers and such Subsidiary, jointly and severally)
shall pay or reimburse each Issuing Bank for such normal and customary costs and
expenses as are incurred or charged by such Issuing Bank in issuing, effecting
payment under, amending or otherwise administering any Letter of Credit.
(d) The Administrative Agent shall, promptly following its receipt
thereof, distribute to each Issuing Bank and the L/C Participants all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this subsection.
3.6 L/C Participations. (a) Each Issuing Bank irrevocably agrees to
grant and hereby grants to each L/C Participant (other than such Issuing Bank),
and, to induce such Issuing Bank to issue Letters of Credit hereunder, each such
L/C Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from such Issuing Bank, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's Revolving Commitment Percentage in such Issuing
Bank's obligations and rights under each Letter of Credit issued by such Issuing
Bank hereunder and the amount of each draft paid by such Issuing Bank
thereunder. Each such L/C Participant unconditionally and irrevocably agrees
with each Issuing Bank that, if a draft is paid under any Letter of Credit
issued by such Issuing Bank for which such Issuing Bank is not reimbursed in
full by the Borrowers in accordance with the terms of this Agreement, such L/C
Participant shall pay to the Administrative Agent for the account of such
Issuing Bank upon demand an amount equal to such L/C Participant's Revolving
Commitment Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed. Each L/C Participant's obligation to make the payment
referred to in the immediately preceding sentence shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such L/C Participant or any Borrower may have against any Issuing Bank,
any Borrower or any other Person for any reason whatsoever, (ii) the occurrence
or continuance of a Default or an Event of Default, (iii) any adverse change in
the condition (financial or otherwise) of any Borrower, (iv) any breach of this
Agreement by any Loan Party or any other Lender or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
(b) If any amount required to be paid by any L/C Participant to any
Issuing Bank pursuant to subsection 3.6 in respect of any unreimbursed portion
of any payment made by such Issuing Bank under any Letter of Credit issued by
such Issuing Bank is not paid to such Issuing Bank when due but is paid within
three Business Days after the date such payment is due, such L/C Participant
shall pay to such Issuing Bank on demand an amount equal to the product of (i)
such amount, times (ii) the daily average cost to such Issuing Bank of funding
such amount as reasonably determined by such Issuing Bank, during the period
from and including the date such payment is required to the date on which such
payment is immediately available to such Issuing Bank, times (iii) a fraction
the numerator of which is the number of days that elapse during such period and
the denominator of which is 360, together with a customary administrative fee
with respect thereto. If any such amount required to be paid by any L/C
Participant pursuant to subsection 3.6 is not in fact made available to any
Issuing Bank by such L/C Participant within three Business Days after the date
such payment is due, such Issuing Bank shall be entitled to recover from such
L/C Participant, on demand, such amount with interest thereon calculated from
such due date at the greater of (A) the rate payable pursuant to the immediately
preceding sentence plus the Applicable Margin for Revolving Offshore Loans and
(B) the rate per annum applicable to Base Rate Loans hereunder. A certificate of
any Issuing Bank submitted to any L/C Participant with respect to
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any amounts owing under this subsection shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after any Issuing Bank has made payment
under any Letter of Credit issued by such Issuing Bank and has received from any
L/C Participant its pro rata share of such payment in accordance with subsection
3.6, such Issuing Bank receives any payment related to such Letter of Credit
(whether directly from the Borrowers or otherwise, including proceeds of
collateral applied thereto by such Issuing Bank), or any payment of interest on
account thereof, such Issuing Bank will promptly distribute to such L/C
Participant its pro rata share thereof.
(d) If any payment received by any Issuing Bank pursuant to
subsection 3.6 with respect to any Letter of Credit issued by it shall be
required to be returned by such Issuing Bank, each L/C Participant shall pay to
such Issuing Bank its pro rata share thereof.
3.7 Letter of Credit Reimbursement Obligations. (a) The Parent
Borrowers (or, if a Letter of Credit is issued for the benefit of any
Subsidiary, the Parent Borrowers and such Subsidiary, jointly and severally)
agree to reimburse each Issuing Bank for the amount of (i) any draft paid by
such Issuing Bank under any Letter of Credit issued by such Issuing Bank and
(ii) any taxes, fees, charges or other costs or expenses incurred by such
Issuing Bank in connection with such payment. Each such payment shall be made to
the relevant Issuing Bank at its address for notices specified herein in the
currency in which the relevant Letter of Credit was issued and in immediately
available funds in such currency.
(b) If any draft shall be presented for payment under any Letter of
Credit issued by any Issuing Bank, such Issuing Bank shall promptly notify the
Company of the date and amount thereof. If an Issuing Bank notifies the Company
prior to 8:30 A.M., San Francisco time, on any Business Day, of any drawing
under any Letter of Credit issued by it in Dollars, the Parent Borrowers (or, if
such Letter of Credit is issued for the benefit of any Subsidiary, the Parent
Borrowers and such Subsidiary, jointly and severally) shall reimburse such
Issuing Bank pursuant to subsection 3.7(a) with respect to such drawing on such
Business Day. If an Issuing Bank notifies the Company after 8:30 A.M., San
Francisco time, on any Business Day of any drawing under any Letter of Credit
issued by it in Dollars or, if an Issuing Bank notifies the Company on any
Business Day of any drawing under any Letter of Credit issued by it in an
Offshore Currency, the Parent Borrowers (or, if such Letter of Credit is issued
for the benefit of any Subsidiary, the Parent Borrowers and such Subsidiary,
jointly and severally) shall reimburse such Issuing Bank pursuant to subsection
3.7(a) with respect to such drawing on the next succeeding Business Day and
interest shall be payable on the amount of such drawing for such period at the
rate then applicable to Base Rate Loans hereunder or, in the case of any such
amount due in respect of a Letter of Credit issued in an Offshore Currency, the
rate which is equal to the sum of (i) the rate of interest determined by the
relevant Issuing Bank (which determination shall be conclusive absent manifest
error) to be the cost to such Issuing Bank of obtaining such funds for such
period, plus, (ii) the Applicable Margin for Revolving Offshore Loans in effect
at such time. If any amount payable under this subsection is not paid when due,
interest shall be payable on such amount from the date such amount becomes
payable under this subsection until payment in full thereof at the rate which
would be payable on any outstanding Base Rate Loans which were then overdue or,
in the case of any amount due in respect of a Letter of Credit issued in an
Offshore Currency, the rate which is equal to the higher of (i) the rate which
would be payable on any outstanding Base Rate Loans which were then overdue and
(ii) the sum of (A) the rate of interest determined by the relevant Issuing Bank
in respect of such Offshore Currency (which determination shall be conclusive
absent manifest error) to be the cost to such Issuing Bank of funding such
amount for such period, plus (B) the Applicable Margin for Revolving Offshore
Loans in effect at such time, plus (C) 2%.
3.8 Obligations Absolute. (a) The obligations of the Borrowers and
the Subsidiaries
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under this Section 3 in respect of Letters of Credit shall be absolute and
unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Borrowers or any Subsidiary may
have or have had against any Issuing Bank or any beneficiary of any Letter of
Credit.
(b) The Borrowers also agree with each Issuing Bank that such
Issuing Bank shall not be responsible for, and the Borrowers' Reimbursement
Obligations shall not be affected by, among other things, (i) the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or (ii) any
dispute between or among any Parent Borrower, any Subsidiary and any beneficiary
of any Letter of Credit or any other party to which such Letter of Credit may be
transferred or (iii) any claims whatsoever of any Parent Borrower or any
Subsidiary against any beneficiary of such Letter of Credit or any such
transferee.
(c) No Issuing Bank shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit issued by
such Issuing Bank, except for errors or omissions caused by such Issuing Bank's
gross negligence or willful misconduct.
(d) The Borrowers agree that any action taken or omitted by any
Issuing Bank under or in connection with any Letter of Credit issued by such
Issuing Bank or the related drafts or documents, if done in the absence of gross
negligence or willful misconduct and in accordance with the standards of care
specified in the Uniform Commercial Code, shall be binding on the Borrowers and
shall not result in any liability of such Issuing Bank to the Borrowers.
3.9 Letter of Credit Payments. The responsibility of each Issuing
Bank to the Borrowers in connection with any draft presented for payment under
any Letter of Credit issued by such Issuing Bank shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in substantial
conformity with such Letter of Credit.
3.10 Letter of Credit Applications. To the extent that any provision
of any application related to any Letter of Credit is inconsistent with the
provisions of this Section 3 or any other terms of this Agreement or any other
Loan Document, the provisions of this Section 3 or such other terms shall apply.
3.11 Swing Line Commitment. Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make swing line loans in Dollars ("Swing
Line Loans") to the Parent Borrowers from time to time during the Revolving
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed $20,000,000, provided that, (a) after giving effect to any such
Swing Line Loans, the Aggregate Outstanding R/C Extensions of Credit at such
time would not exceed the Aggregate Revolving Commitment at such time and (b)
the Swing Line Lender shall not make any Swing Line Loan unless it shall have
received notice from the Administrative Agent that the making of such Swing Line
Loan will not violate clause (a) above. During the Revolving Commitment Period,
the Parent Borrowers may use the Swing Line Commitment by borrowing, prepaying
the Swing Line Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. All Swing Line Loans shall be a Base Rate
Loan or a Negotiated Rate Loan and shall not be entitled to be converted into
Loans that bear interest at any other rate.
3.12 Procedure for Swing Line Borrowing. (a) Each Parent Borrower
may borrow under the Swing Line Commitment during the Revolving Commitment
Period on any Business Day, provided that such Parent Borrower shall give the
Swing Line Lender and the Administrative Agent
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irrevocable notice (which notice must be received by the Swing Line Lender prior
to 10:00 A.M., San Francisco time) on the requested Borrowing Date specifying
the amount of the requested Swing Line Loan which shall be in an aggregate
minimum amount of $500,000 or a whole multiple of $50,000 in excess thereof. The
proceeds of the Swing Line Loan will be made available by the Swing Line Lender
to the relevant Parent Borrower at the office of the Swing Line Lender by 12:00
Noon (San Francisco time) on the Borrowing Date by crediting the account of such
Parent Borrower at such office with such proceeds. The Parent Borrowers may at
any time and from time to time, prepay the Swing Line Loans, in whole or in
part, without premium or penalty, by notifying the Swing Line Lender prior to
11:00 A.M. (San Francisco time) on any Business Day of the date and amount of
prepayment. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein. Partial prepayments
shall be in an aggregate principal amount of $500,000 or a whole multiple of
$50,000 in excess thereof.
(b) The Swing Line Lender, at any time in its sole and absolute
discretion may, on behalf of the Parent Borrowers (which hereby irrevocably
direct the Swing Line Lender to act on their behalf) request each Revolving
Lender (including the Swing Line Lender) to make a Revolving Loan (which shall
be a Base Rate Loan) in an amount equal to such Revolving Lender's Revolving
Commitment Percentage of the aggregate principal amount of the Swing Line Loans
outstanding on the date such notice is given (the "Outstanding Swing Line
Loans"). Unless any of the events described in paragraph (f) of Section 10 shall
have occurred with respect to a Parent Borrower (in which event the procedures
of paragraph (d) of this subsection 3.11 shall apply) each Revolving Lender
shall make the proceeds of its Revolving Loan available to the Administrative
Agent for the account of the Swing Line Lender at the Administrative Agent's
Payment Office prior to 11:00 A.M. (San Francisco time) in funds immediately
available in Dollars on the Business Day next succeeding the date such notice is
given. The proceeds of such Revolving Loans shall be immediately applied to
repay the outstanding Swing Line Loans. Effective on the day such Revolving
Loans are made, the portion of the Swing Line Loans so paid shall no longer be
outstanding as Swing Line Loans and shall no longer be due under the Swing Line
Note. Each Parent Borrower authorizes the Swing Line Lender to charge such
Parent Borrower's accounts with the Swing Line Lender (up to the amount
available in each such account) in order to immediately pay the amount of its
outstanding Swing Line Loans to the extent amounts received from the Revolving
Lenders are not sufficient to repay in full such outstanding Swing Line Loans.
(c) Notwithstanding anything herein to the contrary, the Swing Line
Lender shall not be obligated to make any Swing Line Loans if the conditions set
forth in subsection 7.3 have not been satisfied.
(d) If prior to the making of a Revolving Loan pursuant to paragraph
(b) of subsection 3.12 one of the events described in paragraph (f) of Section
10 shall have occurred and be continuing with respect to a Parent Borrower, each
Revolving Lender will, on the date such Revolving Loan was to have been made
pursuant to the notice in subsection 3.12, purchase an undivided participating
interest in the outstanding Swing Line Loans in an amount equal to (i) its
Revolving Commitment Percentage times (ii) the aggregate principal amount of
Swing Line Loans then outstanding. Each Lender will immediately transfer to the
Swing Line Lender, in immediately available funds, the amount of its
participation, and upon receipt thereof the Swing Line Lender will deliver to
such Revolving Lender a Swing Line Loan Participation Certificate dated the date
of receipt of such funds and in such amount.
(e) Whenever, at any time after any Revolving Lender has purchased a
participating interest in a Swing Line Loan, the Swing Line Lender receives any
payment on account thereof, the Swing Line Lender will distribute to such
Revolving Lender its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Revolving Lender's participating interest was outstanding and
funded); provided, however, that in the
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event that such payment received by the Swing Line Lender is required to be
returned, such Lender will return to the Swing Line Lender any portion thereof
previously distributed by the Swing Line Lender to it.
(f) Each Revolving Lender's obligation to make the Revolving Loans
referred to in subsection 3.12(b) and to purchase participating interests
pursuant to subsection 3.12(d) shall be absolute and unconditional and shall not
be affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Revolving Lender or
the Parent Borrowers may have against the Swing Line Lender, the Parent
Borrowers or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default or an Event of Default, (iii) any adverse change in the
condition (financial or otherwise) of a Parent Borrower, (iv) any breach of this
Agreement or any other Loan Document by a Parent Borrower, any Subsidiary or any
other Lender, or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
SECTION 4. AMOUNT AND TERMS OF FRONTED OFFSHORE LOANS
4.1 Fronted Offshore Currency Subfacility. (a) Subject to the terms
and conditions hereof, each Fronting Lender agrees to make loans ("Fronted
Offshore Loans") to the Subsidiary Borrowers from time to time during the
Revolving Commitment Period in an aggregate principal amount at any one time
outstanding the Dollar Equivalent of which shall not exceed with respect to each
Fronted Offshore Currency, the related Fronted Offshore Currency Sublimit of
such Fronting Lender with respect to such Fronted Offshore Currency, provided
that, (i) after giving effect to any such Fronted Offshore Loan, the Aggregate
Outstanding R/C Extensions of Credit at such time would not exceed the Aggregate
Revolving Commitment at such time, (ii) after giving effect to such Fronted
Offshore Loan and the use of proceeds thereof, (A) the Dollar Equivalent of the
aggregate outstanding principal amount of Offshore Currency Loans does not
exceed the Offshore Currency Sublimit for all Offshore Currency Loans and (B)
the Dollar Equivalent of the aggregate outstanding principal amount of Offshore
Currency Loans in any Offshore Currency does not exceed the Offshore Currency
Sublimit for Offshore Currency Loans in such Offshore Currency and (iii) no
Fronting Lender shall make any Fronted Offshore Loan unless it shall have
received notice from the Administrative Agent that the making of such Fronted
Offshore Loan will not violate clause (i) or (ii) above. During the Revolving
Commitment Period, the Subsidiary Borrowers may use the Fronted Offshore
Currency Subfacility by borrowing, prepaying Fronted Offshore Loans in whole or
in part, and reborrowing, all in accordance with the terms and conditions
hereof.
4.2 Procedure for Fronted Offshore Loan Borrowings. A Subsidiary
Borrower may borrow under the Fronted Offshore Currency Subfacility during the
Revolving Commitment Period on any Banking Day, provided that the Company or its
authorized designee shall give the relevant Fronting Lender and the
Administrative Agent irrevocable notice (which notice must be received by the
Fronting Lender and the Administrative Agent prior to the applicable time
specified therefor in such Fronting Lender's Fronting Lender Addendum)
specifying (i) the amount to be borrowed and the Fronted Offshore Currency with
respect thereto, (ii) the requested Borrowing Date and (iii) the initial
Interest Periods (if any) with respect thereto. provided, further, that,
notwithstanding anything to the contrary in any Fronting Lender Addendum, no
Fronting Lender shall be required to make a Fronted Offshore Loan until it shall
have received the notice described in clause (iii) of the proviso to the first
sentence of subsection 4.1, upon receipt of which such Fronting Lender shall
make the relevant Fronted Offshore Loan in accordance with the terms of the
applicable Fronting Lender Addendum or as soon thereafter as practicable. Each
borrowing under the Fronted Offshore Currency Subfacility from a Fronting Lender
shall be in such minimum amounts as shall be specified in the applicable
Fronting Lender's Fronting
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Lender Addendum. The proceeds of each Fronted Offshore Loan will be made
available by the Fronting Lender in respect thereof to the relevant Subsidiary
Borrower at such Fronting Lender's Payment Office at such time on the Borrowing
Date and in such funds as are specified in such Fronting Lender's Fronting
Lender Addendum.
4.3 Fronted Offshore Loans Fees, Commissions and Other Charges. (a)
Each Subsidiary Borrower shall pay to the relevant Fronting Lender with respect
to each Fronted Offshore Loan made to it by such Fronting Lender, for the
account of such Fronting Lender, a fronting fee with respect to the period from
and including the date of such Fronted Offshore Loan to but excluding the date
of repayment thereof computed at a rate of 3/8% per annum on the average daily
principal amount of such Fronted Offshore Loan outstanding during the period for
which such fee is calculated. Such fronting fee shall be payable in arrears on
each Fee Payment Date to occur after the making of such Fronted Offshore Loan
and on the Revolving Termination Date (or on such earlier date as the Revolving
Commitments shall terminate as provided herein) and shall be nonrefundable.
(b) Each Subsidiary Borrower shall pay to the Fronting Lender, for
the account of the Fronted Loan Participants, a participation fee with respect
to each Fronted Offshore Loan with respect to the period from and including the
date of such Loan to but excluding the date of repayment thereof, computed at a
rate per annum equal to the Applicable Margin in respect of Revolving Offshore
Loans from time to time in effect on the average daily principal amount of such
Fronted Offshore Loan outstanding during the period for which such fee is
calculated. Such fee shall be shared ratably among the Fronted Loan Participants
in accordance with their respective Revolving Commitment Percentages. Such
commission shall be payable in arrears on each Fee Payment Date to occur after
the making of such Fronted Offshore Loan and on the Revolving Termination Date
(or on such earlier date as the Revolving Commitments shall terminate as
provided herein) and shall be nonrefundable. Upon receipt of any payment
pursuant to this paragraph, each Fronting Lender shall promptly convert such
payment to Dollars at the Spot Rate determined by the Fronting Lender to be in
effect on the date of such conversion and shall promptly forward such amount in
Dollars to the Administrative Agent at the Administrative Agent's Payment
Office.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to each Fronting Lender and the Fronted Loan Participants
all fees received by the Administrative Agent for their respective accounts
pursuant to this subsection.
4.4 Participations. (a) Each Fronting Lender irrevocably agrees to
grant and hereby grants to each Fronted Loan Participant (other than such
Fronting Lender), and, to induce such Fronting Lender to make Fronted Offshore
Loans hereunder, each such Fronted Loan Participant irrevocably agrees to accept
and purchase and hereby accepts and purchases from such Fronting Lender, on the
terms and conditions hereinafter stated, for such Fronted Loan Participant's own
account and risk an undivided interest equal to such Fronted Loan Participant's
Revolving Commitment Percentage in such Fronting Lender's obligations and rights
in respect of each Fronted Offshore Loan made by such Fronting Lender hereunder.
Each such Fronted Loan Participant unconditionally and irrevocably agrees with
each Fronting Lender that, if any amount in respect of the principal, interest
or fees owing to such Fronting Lender in respect of a Fronted Offshore Loan is
not paid when due in accordance with the terms of this Agreement, such Fronted
Loan Participant shall pay to the Administrative Agent for the account of such
Fronting Lender upon demand an amount in the relevant Offshore Currency equal to
such Fronted Loan Participant's Revolving Commitment Percentage of such unpaid
amount. Each Fronted Loan Participant's obligation to make the payment referred
to in the immediately preceding sentence shall be absolute and unconditional and
shall not be affected by any circumstance, including, without limitation, (i)
any set-off, counterclaim, recoupment, defense or other right which such Fronted
Loan Participant or any Subsidiary Borrower may have against the Fronting
Lender, any Subsidiary Borrower or any other
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Person for any reason whatsoever, (ii) the occurrence or continuance of a
Default or an Event of Default, (iii) any adverse change in the condition
(financial or otherwise) of any Borrower, (iv) any breach of this Agreement or
any other Loan Document by any Loan Party or any other Lender or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
(b) If any amount required to be paid by any Fronted Loan
Participant to any Fronting Lender pursuant to subsection 4.4(a) is not paid to
such Fronting Lender when due but is paid within three Banking Days after the
date such payment is due, such Fronted Loan Participant shall pay to such
Fronting Lender on demand an amount equal to the product of (i) such amount,
times (ii) the Cost of Funds in respect of the related Offshore Currency
determined by such Fronting Lender during the period from and including the date
such payment is required to the date on which such payment is immediately
available to such Fronting Lender, times (iii) a fraction the numerator of which
is the number of days that elapse during such period and the denominator of
which is 360. If any such amount required to be paid by any Fronted Loan
Participant pursuant to subsection 4.4(a) is not in fact made available to any
Fronting Lender by such Fronted Loan Participant within three Banking Days after
the date such payment is due, such Fronting Lender shall be entitled to recover
from such Fronted Loan Participant, on demand, such amount with interest thereon
calculated from such due date at the rate per annum equal to the rate applicable
thereto in accordance with the preceding sentence plus the Applicable Margin in
respect of Revolving Offshore Loans. A certificate of any Fronting Lender
submitted to any Fronted Loan Participant with respect to any amounts owing
under this subsection shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after any Fronting Lender has received
from any Fronted Loan Participant the full amount owing by such Fronted Loan
Participant pursuant to and in accordance with subsection 4.4(a) in respect of
any Fronted Offshore Loan, such Fronting Lender receives any payment related to
such Fronted Offshore Loan (whether directly from the relevant Subsidiary
Borrower or otherwise, including proceeds of collateral applied thereto by such
Fronting Lender), or any payment of interest on account thereof, such Fronting
Lender will distribute to such Fronted Loan Participant its pro rata share
thereof.
(d) If any payment received by any Fronting Lender pursuant to
subsection 4.4(c) with respect to any Fronted Offshore Loan made by it shall be
required to be returned by such Fronting Lender, each Fronted Loan Participant
shall pay to such Fronting Lender its pro rata share thereof.
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SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF
CREDIT
5.1 Commitment Fees. The Parent Borrowers jointly and severally
agree to pay to the Administrative Agent for the account of each Revolving
Lender a commitment fee for the period from and including the first day of the
Revolving Commitment Period to the Revolving Termination Date, computed at a
rate equal to the Applicable Rate per annum on the average daily amount of such
Revolving Lender's Revolving Commitment Percentage of the Available Revolving
Commitment during the period (calculated as if no Swing Line Loans were
outstanding during such period) for which payment is made, payable quarterly in
arrears on each Fee Payment Date and on the Revolving Termination Date (or such
earlier date on which the Revolving Loans become due and payable pursuant to
Section 10), commencing on the first of such dates to occur after the date
hereof. The Parent Borrowers jointly and severally agree to pay to the
Administrative Agent for the account of each Term Lender a commitment fee for
the period from and including the first day of the Term Commitment Period to the
last day of the Term Commitment Period, computed at a rate equal to the
Applicable Rate per annum on the average daily amount of such Lender's Term
Commitment Percentage of the Available Term Commitment during the period for
which payment is made, payable quarterly in arrears on each Fee Payment Date and
on the last day of the Term Commitment Period, commencing on the first of such
dates to occur after the date hereof.
5.2 Termination or Reduction of Commitments. The Company shall have
the right, upon not less than five Business Days' notice to the Administrative
Agent, to terminate the Commitments or, from time to time, to reduce the amount
of the Commitments; provided that no such termination or reduction of the
Revolving Commitments shall be permitted if, after giving effect thereto and to
any prepayments of Revolving Loans made on the effective date thereof, the
Aggregate Outstanding R/C Extensions of Credit would exceed the Revolving
Commitments then in effect. Any such reduction shall be in an amount equal to
$5,000,000 or a whole multiple of $1,000,000 in excess thereof and shall reduce
permanently the Commitments then in effect.
5.3 Repayment of Loans; Evidence of Debt. (a) (i) The Parent
Borrowers hereby jointly and severally unconditionally promise to pay to the
Administrative Agent for the account of each relevant Revolving Lender the then
unpaid principal amount of each Revolving Loan of such Lender made to the Parent
Borrowers on the Revolving Termination Date (or such earlier date on which the
Revolving Loans become due and payable pursuant to Section 10); provided that
each such Loan that is a Revolving Offshore Loan shall, unless continued for a
subsequent Interest Period in accordance with subsection 5.6, be due and payable
on the last day of the Interest Period applicable thereto, (ii) each Subsidiary
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of each relevant Revolving Lender the then unpaid principal amount
of each Revolving Loan of such Lender made to such Subsidiary Borrower on the
Revolving Termination Date (or such earlier date on which the Revolving Loans
become due and payable pursuant to Section 10); provided that each such Loan
that is a Revolving Offshore Loan shall, unless continued for a subsequent
Interest Period in accordance with subsection 5.6, be due and payable on the
last day of the Interest Period applicable thereto, (iii) the Parent Borrowers
hereby jointly and severally unconditionally promise to pay to the
Administrative Agent for the account of the Swing Line Lender the then unpaid
principal amount of the Swing Line Loans on the Revolving Termination Date (or
such earlier date on which the Revolving Loans become due and payable pursuant
to Section 10), and (iv) the Parent Borrowers hereby jointly and severally
unconditionally promise to pay to the Administrative Agent for the account of
each relevant Term Lender the principal amount of the Term Loans of such Lender,
in consecutive quarterly installments, payable on the last day of each March,
June, September and December, commencing on September 30, 1997, each such
installment to be in an amount equal to such Lender's Term Commitment Percentage
of (A) in the case of any payments due in March, June or September of any year,
20% of the
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amount set forth below opposite the year in which such date occurs and (B) in
the case of any payment due in December of any year, 40% of the amount set forth
below opposite the year in which such date occurs (or the then unpaid principal
amount of such Term Loans, on the date that the Term Loans become due and
payable pursuant to Section 10), provided that (x) the payments due in September
and December 1997 shall be in an amount equal to such Lender's Term Commitment
Percentage of 50% of the amount set forth below for 1997 (as adjusted pursuant
to clause (z) below), (y) the payment due in March 2003 shall be in an amount
equal to such Lender's Term Commitment Percentage of 100% of the amount set
forth below for 2003 (as adjusted pursuant to clause (z) below) and (z) in the
event that the Second Drawdown Date does not occur, each amount set forth below
shall be reduced by multiplying such amount times a fraction the numerator of
which is the aggregate initial principal amount of all Term Loans made on the
Closing Date and the denominator of which is the initial Aggregate Term
Commitment:
Year Amount
---- ------
1997 $27,500,000
1998 58,750,000
1999 65,000,000
2000 68,750,000
2001 71,250,000
2002 84,583,300
2003 24,166,700
The Parent Borrowers hereby further agree jointly and severally to pay interest
on the unpaid principal amount of the Term Loans, Revolving Loans made to the
Parent Borrowers and Swing Line Loans from time to time outstanding from the
date hereof until payment in full thereof at the rates per annum, and on the
dates, set forth in subsection 5.8. Each Subsidiary Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Revolving Loans
made to it from time to time outstanding from the date hereof until payment in
full thereof at the rates per annum, and on the dates, set forth in subsection
5.8.
(b) Each Subsidiary Borrower hereby unconditionally promises to pay
to the relevant Fronting Lender the then unpaid principal amount of each Fronted
Offshore Loan of such Fronting Lender made to such Subsidiary Borrower on the
Revolving Termination Date (or such earlier date on which the Revolving Loans
become due and payable pursuant to Section 10 or as may be specified in the
Fronting Bank Addendum of such Fronting Bank). Such Subsidiary Borrower hereby
further agrees to pay interest on the unpaid principal amount of each such
Fronted Offshore Loan from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
subsection 5.8.
(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrowers to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(d) Each Fronting Lender shall maintain in accordance with its usual
practice an account in which shall be recorded (i) the amount of each Fronted
Offshore Loan made by it hereunder, the identity of the Subsidiary Borrower in
respect thereof, the Type thereof and each Interest Period (if any) applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from each such Subsidiary Borrower to such Fronting
Lender hereunder and (iii) the amount of any sum received by the Fronting Lender
hereunder from such Subsidiary Borrower in respect of any
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such Fronted Offshore Loan. At the request of the Administrative Agent, each
Fronting Lender will provide to the Administrative Agent a copy of its records
maintained pursuant to this subsection.
(e) The Administrative Agent shall maintain the Register pursuant to
subsection 13.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Revolving Loan, Swing Line Loan and Term Loan
made hereunder, the Borrower with respect thereto, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrowers to the Swing
Line Lender, the Term Lenders or the Revolving Lenders, as the case may be,
hereunder, (iii) the amount of each Revolving Lender's participation in
outstanding Letters of Credit and Fronted Offshore Loans and (iv) both the
amount of any sum received by the Administrative Agent hereunder from the
Borrowers and each Lender's share thereof.
(f) The entries made in the Register and the accounts of each Lender
maintained pursuant hereto shall, to the extent permitted by applicable law, be
prima facie evidence of the existence and amounts of the obligations of the
Borrowers therein recorded; provided, however, that the failure of any Lender or
the Administrative Agent to maintain the Register or any such account, or any
error therein, shall not in any manner affect the obligation of the Borrowers to
repay (with applicable interest) the Loans made to such Borrowers by such Lender
in accordance with the terms of this Agreement.
(g) The Parent Borrowers agree that, upon the request to the
Administrative Agent by any applicable Lender, the Parent Borrowers will execute
and deliver to such Lender, as appropriate, (i) a promissory note of the Parent
Borrowers evidencing the Revolving Loans of such Lender, substantially in the
form of Exhibit M with appropriate insertions as to date and principal amount (a
"Revolving Note"), (ii) a promissory note of the Parent Borrowers evidencing
each Term Loan of such Lender, substantially in the form of Exhibit N with
appropriate insertions as to date and principal amount (a "Term Note") and (iii)
a promissory note of the Parent Borrowers evidencing the Swing Line Loans of the
Swing Line Lender, substantially in the form of Exhibit O with appropriate
insertions as to date and principal amount (the "Swing Line Note"). Each
Subsidiary Borrower agrees that, upon the request to the Administrative Agent by
any applicable Lender, such Subsidiary Borrower will execute and deliver to such
Lender, as appropriate, (x) a Revolving Note and (y) a promissory note of such
Subsidiary Borrower evidencing the Fronted Offshore Loans of such Lender,
substantially in the form of Exhibit P with appropriate insertions as to date
and principal amount (a "Fronted Loan Note"). Each Lender is hereby authorized
to record the Borrowing Date, the amount of each relevant Loan and the date and
amount of each payment or prepayment of principal thereof, on the schedule
annexed to and constituting a part of the Note evidencing such Loan and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded, provided that the failure by a Lender to make any such
recordation (or any error therein) shall not affect any of the obligations of
the related Borrower under such Note or this Agreement.
5.4 Optional and Mandatory Prepayments. (a) The Borrowers may at any
time and from time to time prepay Eurodollar Loans and Revolving Offshore Loans,
in whole or in part, without premium or penalty except as specified in
subsection 5.15, upon at least four Banking Days' irrevocable notice to the
Administrative Agent, specifying the date and amount of prepayment and whether
the prepayment is of Eurodollar Loans, Revolving Offshore Loans or a combination
thereof, and, if of a combination thereof, the amount allocable to each. The
Borrowers may at any time and from time to time prepay Base Rate Loans and Swing
Line Loans, in whole or in part, without premium or penalty upon, in the case of
Base Rate Loans, at least one Banking Day's irrevocable notice (which notice
must be received by the
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Administrative Agent prior to 8:30 A.M., San Francisco time, on such Banking
Day) and in the case of Swing Line Loans on same day notice (which notice must
be received by the Administrative Agent prior to 11:00 A.M., San Francisco time,
on the date of repayment) to the Administrative Agent, specifying the date and
amount of prepayment. Upon receipt of any such notice the Administrative Agent
shall promptly notify each relevant Lender and, if such notice relates to a
prepayment of Revolving Offshore Loans, the European Payment Agent thereof. If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with, in the case of Eurodollar
Loans and Offshore Currency Loans, any amounts payable pursuant to subsection
5.15 and accrued interest to such date on the amount prepaid. Partial
prepayments of the Term Loans shall be applied to the installments of principal
thereof ratably in accordance with the then remaining amounts thereof. Amounts
prepaid on account of the Term Loans may not be reborrowed. Partial prepayments
of Eurodollar Loans, Revolving Offshore Loans and Base Rate Loans shall be in a
principal amount, as to each such Type of Loan, of $5,000,000 (or the Offshore
Currency Equivalent thereof, in the case of Revolving Offshore Loans) or a whole
multiple of $1,000,000 (or 1,000,000 units in the relevant Eligible Offshore
Currency, in the case of Revolving Offshore Loans) in excess thereof. Partial
prepayments of Swing Line Loans shall be in an aggregate principal amount of
$500,000 or a whole multiple of $50,000 in excess thereof. Revolving Loans may
not be prepaid if any Swing Line Loans are outstanding at such time.
(b) A Subsidiary Borrower may at any time and from time to time
prepay Fronted Offshore Loans, in whole or in part, without premium or penalty
except as specified in subsection 5.15, upon at least four Banking Days'
irrevocable notice (or such other number of days as may be specified in the
Fronting Bank Addendum of such Fronting Lender in its discretion) to the
relevant Fronting Lender and the Administrative Agent, specifying the date and
amount of prepayment. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with any
amounts payable pursuant to subsection 5.15 and accrued interest to such date on
the amount prepaid. Partial prepayments of Fronted Offshore Loans shall be in
such minimum amounts as shall be specified in the Fronting Bank Addendum of the
relevant Fronting Lender.
(c) If, on any day, (i) the Dollar Equivalent of the aggregate
outstanding principal amount of Offshore Currency Loans exceeds an amount equal
to 103% of the Offshore Currency Sublimit for all Offshore Currency Loans, (ii)
the Dollar Equivalent of the aggregate outstanding principal amount of Offshore
Currency Loans in any Offshore Currency exceeds an amount equal to 103% of the
Offshore Currency Sublimit for Offshore Currency Loans in such Offshore Currency
or (iii) the Aggregate Outstanding R/C Extensions of Credit exceeds the
Aggregate Revolving Commitment on such date, the Parent Borrowers shall, without
notice or demand, immediately repay (or cause the relevant Subsidiary Borrower
to repay) such of the outstanding Loans in an aggregate principal amount such
that, after giving effect thereto, (x) the Dollar Equivalent of the aggregate
outstanding principal amount of Offshore Currency Loans does not exceed the
Offshore Currency Sublimit for all Offshore Currency Loans, (y) the Dollar
Equivalent of the aggregate outstanding principal amount of Offshore Currency
Loans in each Offshore Currency does not exceed the Offshore Currency Sublimit
for Offshore Currency Loans in such Offshore Currency and (z) the Aggregate
Outstanding R/C Extensions of Credit does not exceed the Aggregate Revolving
Commitment, together with interest accrued to the date of such payment or
prepayment on the principal so prepaid and any amounts payable under subsection
5.15 in connection therewith. Any prepayment of Revolving Loans pursuant to
clause (iii) of the immediately preceding sentence shall first be applied to
prepay any outstanding Swing Line Loans and then be applied to such Revolving
Loans as the Borrowers may determine. The Parent Borrowers may in lieu of
prepaying Offshore Currency Loans in order to comply with this paragraph deposit
amounts in a Cash Collateral Account equal to the aggregate principal amount of
Offshore Currency Loans required to be prepaid. To the extent that after giving
effect to any prepayment of Loans required by this paragraph, the Aggregate
Outstanding R/C Extensions of Credit at such time exceeds the Aggregate
Revolving Commitment at such time, the Parent Borrowers shall, without notice or
demand, immediately deposit in a Cash Collateral Account upon terms reasonably
satisfactory to the Administrative Agent an amount
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equal to the lesser of (A) the sum of the aggregate then outstanding L/C
Obligations and the aggregate principal amount of Offshore Currency Loans then
outstanding and (B) the amount of such remaining excess. The Administrative
Agent shall apply any cash deposited in the Cash Collateral Account (to the
extent thereof) to pay any Reimbursement Obligations which are or become due
thereafter and/or to repay Offshore Currency Loans at the end of the Interest
Periods therefor, provided that, the Administrative Agent shall release to the
Parent Borrowers from time to time such portion of the amount on deposit in the
Cash Collateral Account to the extent such amount is not required to be so
deposited in order for the Borrowers to be in compliance with this paragraph.
"Cash Collateral Account" means an account established by the Parent Borrowers
with the Administrative Agent and over which the Administrative Agent shall have
exclusive dominion and control, including the right of withdrawal for
application in accordance with this subsection 5.4(c).
(d) On the day upon which the Company or any of its Subsidiaries
receives Net Proceeds from the issuance of any Indebtedness permitted under
subsection 9.2(i) or Capital Stock (other than (i) the issuance of Capital Stock
in the ordinary course of business in connection with employee stock option or
incentive plans or the issuance of Capital Stock to the Company or any of its
Subsidiaries and (ii) in connection with the Management Investor Notes), the
Loans shall be prepaid and/or the Commitments shall be reduced in an amount
equal to 100% (or 50%, in the case of issuances of Capital Stock) of the Net
Proceeds of such issuance in accordance with paragraph (g) of this subsection.
(e) If the Company or any of its Subsidiaries sells, assigns,
transfers, leases or otherwise disposes of any of its assets pursuant to
subsection 9.6(b), or any of its assets become the subject of a Casualty Event,
no later than three Business Days after receipt of the Net Proceeds therefrom,
the Loans shall be prepaid and/or the Commitments shall be reduced in an amount
equal to 100% of such Net Proceeds in accordance with paragraph (g) of this
subsection, provided that, at the option of the Company and so long as no
Default or Event of Default shall have occurred and be continuing or would be
caused thereby, (i) the Company and its Subsidiaries may, in the aggregate,
retain up to $5,000,000 of the Net Proceeds of any such sales, assignments,
transfers, leases or other dispositions for general corporate purposes, (ii) the
Company and its Subsidiaries may use up to $25,000,000 of the Net Proceeds
realized in the aggregate subsequent to the Closing Date from any such sales,
assignments, transfers, leases or other dispositions (A) to make Investments or
(B) to purchase similar assets to those sold, assigned, transferred, leased or
disposed of in such sales, assignments, transfers, leases or other dispositions
or to purchase other fixed or capital assets used in its existing lines of
business, in each case within twelve months after the consummation of the
relevant sale, assignment, lease, transfer or other disposition, subject to the
following conditions: (w) in the event the Company or any of its Subsidiaries
elects to exercise its rights pursuant to this clause (ii), the Company or such
Subsidiary, as the case may be, shall promptly deliver a certificate of a
Responsible Officer to the Administrative Agent setting forth the amount of the
Net Proceeds which the Company or such Subsidiary, as the case may be, expects
to so use during the subsequent twelve month period and (x) on the date which is
twelve months after the relevant sale or other disposition, the Company or such
Subsidiary, as the case may be, shall (I) deliver a certificate of a Responsible
Officer to the Administrative Agent certifying as to the amount and use of such
Net Proceeds actually so used and (II) deliver to the Administrative Agent, for
application in accordance with (and to the extent required by) this subsection,
an amount equal to the remaining unused Net Proceeds, (iii) the Company and the
Subsidiaries may use the Net Proceeds of any sale of the New York Real Property
to finance relocation expenses in connection with the New York Real Estate
Consolidation incurred within twelve months prior or subsequent to the date of
such sale and (iv) the Company or any of its Subsidiaries may use the Net
Proceeds of any Casualty Event to replace or rebuild the property or assets
which were the subject of the Casualty Event within twelve months after the
occurrence of such Casualty Event, subject to the following conditions: (y) in
the event the Company or any of its Subsidiaries elects to exercise its right
pursuant to this clause (iv), the Company or such Subsidiary, as the case may
be, shall promptly deliver a certificate of a Responsible Officer to the
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Administrative Agent setting forth the amount of the Net Proceeds which the
Company or such Subsidiary, as the case may be, expects to so use during the
subsequent twelve month period and (z) on the date which is twelve months after
the relevant Casualty Event, the Company or such Subsidiary, as the case may be,
shall (I) deliver a certificate of a Responsible Officer to the Administrative
Agent certifying as to the amount and use of such Net Proceeds actually used to
replace or rebuild such property or assets and (II) deliver to the
Administrative Agent, for application in accordance with (and to the extent
required by) this subsection, an amount equal to the remaining unused Net
Proceeds.
(f) On the earlier of (i) the date of receipt by the Lenders of the
financial statements required to be delivered pursuant to subsection 8.1(a) as
to any fiscal year of the Company (the "Base Year") and (ii) the 90th day of the
fiscal year of the Company next succeeding the Base Year, the Loans shall be
prepaid and/or the Commitments shall be reduced in an amount equal to 50% of
Excess Cash Flow for the Base Year (commencing with the fiscal year ending
December 31, 1997) in accordance with paragraph (g) of this subsection, provided
that, if the Applicable Margin is at any time determined by reference to Debt
▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ (whichever occurs first), no prepayment of
Loans and/or reduction of Commitments shall be required pursuant to this
paragraph from and after such Adjustment Date.
(g) Each prepayment of Loans and/or reduction of Commitments
required by subsections 5.4(d) through (f) shall be made in the aggregate amount
provided in such subsections in the following order: first, the Aggregate Term
Commitment shall be permanently reduced by an amount not to exceed the Available
Term Commitment at such time, second the outstanding Term Loans shall be prepaid
and third the Aggregate Revolving Commitment shall be permanently reduced. Each
such prepayment of Loans shall be accompanied by payment in full of all accrued
fees and interest thereon to and including the date of such prepayment, together
with any additional amounts owing pursuant to subsection 5.15. Each prepayment
of the Term Loans required pursuant to this subsection 5.4(g) may not be
reborrowed and shall be applied to the remaining installments of principal
thereof pro rata.
5.5 Offshore Currency Spot Rate. (a) (i) No later than 2:00 P.M.,
San Francisco time, on each Calculation Date with respect to an Eligible
Offshore Currency, the Administrative Agent shall determine the Spot Rate as of
such Calculation Date with respect to such Eligible Offshore Currency and (ii)
no later than the time specified in the applicable Fronting Lender Addendum, on
each Calculation Date with respect to a Fronted Offshore Currency, the Fronting
Lender with respect to such Offshore Currency shall determine the Spot Rate as
of such Calculation Date with respect to such Fronted Offshore Currency and
shall promptly notify the Administrative Agent thereof, provided that, upon
receipt of a borrowing request pursuant to subsection 4.2, the relevant Fronting
Lender shall determine the Spot Rate with respect to the relevant Fronted
Offshore Currency in accordance with the Fronting Lender Addendum and shall
promptly notify the Administrative Agent thereof (it being acknowledged and
agreed that the Administrative Agent shall use such Spot Rate for the purposes
of determining compliance with subsection 4.1 with respect to such borrowing
request and issuing the notice described in clause (iii) of the proviso to the
first sentence of subsection 4.1). The Spot Rates so determined shall become
effective on the first Business Day immediately following the relevant
Calculation Date (a "Reset Date") and shall remain effective until the next
succeeding Reset Date.
(b) No later than 2:00 P.M., San Francisco time, on each Reset Date,
Borrowing Date (with respect to Offshore Currency Loans) and Issuance Date (with
respect to Letters of Credit issued in an Offshore Currency), the Administrative
Agent shall determine the Dollar Equivalent of the Offshore Currency Loans then
outstanding (after giving effect to any Offshore Currency Loans to be made or
repaid on such date).
(c) The Administrative Agent shall promptly notify the Company and
the European
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Payment Agent of each determination of a Spot Rate hereunder.
5.6 Conversion and Continuation Options. (a) The relevant Borrower
may elect from time to time to convert Eurodollar Loans to Base Rate Loans, by
giving the Administrative Agent at least one Banking Day's prior irrevocable
notice of such election (which notice must be received by the Administrative
Agent prior to 8:30 A.M., San Francisco time, on such Banking Day), provided
that any such conversion of Eurodollar Loans may only be made on the last day of
an Interest Period with respect thereto. The relevant Borrower may elect from
time to time to convert Base Rate Loans to Eurodollar Loans by giving the
Administrative Agent at least three Banking Days' prior irrevocable notice of
such election (which notice must be received by the Administrative Agent prior
to 8:30 A.M., San Francisco time, on such Banking Day). Any such notice of
conversion to Eurodollar Loans shall specify the length of the initial Interest
Period or Interest Periods therefor. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. All or
any part of outstanding Eurodollar Loans and Base Rate Loans may be converted as
provided herein, provided that (i) no Loan may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Majority Lenders have determined that such a
conversion is not appropriate and (ii) no Loan may be converted into a
Eurodollar Loan after the date that is one month prior to the Revolving
Termination Date (in the case of conversions of Revolving Loans) or the date of
the final installment of principal of the Term Loans (in the case of conversions
of Term Loans).
(b) Any Eurodollar Loans or Revolving Offshore Loans may be
continued as such upon the expiration of the then current Interest Period with
respect thereto by the relevant Borrower giving notice to the Administrative
Agent, in accordance with the applicable provisions of the term "Interest
Period" set forth in subsection 1.1, of the length of the next Interest Period
to be applicable to such Loans, provided that no Eurodollar Loan may be
continued as such (i) when any Event of Default has occurred and is continuing
and the Administrative Agent has or the Majority Lenders have determined that
such a continuation is not appropriate or (ii) after the date that is one month
prior to, respectively, the Revolving Termination Date (in the case of
continuations of Revolving Loans) or the date of the final installment of
principal of the Term Loans (in the case of continuations of Term Loans) and
provided, further, that, if the relevant Borrower shall fail to give such notice
of continuation of a Eurodollar Loan or if such continuation is not permitted,
such Eurodollar Loan shall be automatically converted to a Base Rate Loan on the
last day of such then expiring Interest Period and, if the relevant Borrower
shall fail to give such notice of continuation of a Revolving Offshore Loan,
such Revolving Offshore Loan shall be automatically continued for an Interest
Period of one month.
5.7 Maximum Number of Tranches. In no event shall there be (x) more
than 7 Eurodollar Tranches outstanding at any time or (y) more than 2 Offshore
Tranches in any single Eligible Offshore Currency outstanding at any time.
5.8 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin for such day.
(b) Each Revolving Offshore Loan shall bear interest for each day
during each Interest Period with respect thereto at a rate per annum equal to
the Offshore Rate determined for such day plus the Applicable Margin for such
day.
(c) Each Fronted Offshore Loan shall bear interest for each day
during each Interest Period with respect thereto (or, if there is no Interest
Period with respect thereto, for each day such Loan is outstanding) at a rate
per annum equal to the applicable Cost of Funds determined for such day.
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(d) Each Base Rate Loan shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin.
(e) Each Swing Line Loan shall bear interest (i) if such Swing Line
Loan is a Base Rate Loan, at a rate per annum equal to the Base Rate plus the
Applicable Margin for Eurodollar Loans or (ii) if such Swing Line Loan is a
Negotiated Rate Loan, at a rate per annum equal to the Negotiated Rate with
respect thereto.
(f) If all or a portion of (i) any principal of any Loan, (ii) any
interest payable thereon, (iii) any commitment fee or (iv) any other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the Loans and any such overdue
interest, commitment fee or other amount shall bear interest at a rate per annum
which is (x) in the case of principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection plus
2% or (y) in the case of any such overdue interest, commitment fee or other
amount, (A) the rate described in paragraph (d) of this subsection plus 2%, in
the case of amounts owing that are denominated in Dollars, or (B) (I) the Cost
of Funds determined by the Administrative Agent in respect of the relevant
Offshore Currency, plus (II) the Applicable Margin for Revolving Offshore Loans
in effect at such time, plus (III) 2%, in the case of amounts owing that are
denominated in Offshore Currencies, in each case from the date of such
non-payment until such overdue principal, interest, commitment fee or other
amount is paid in full (as well after as before judgment).
(g) Interest shall be payable in arrears on each Interest Payment
Date and on the Revolving Termination Date (in the case of Revolving Loans and
Fronted Offshore Loans) and the date of the final installment of principal of
the Term Loans (in the case of Term Loans), provided that (i) interest accruing
pursuant to paragraph (f) of this subsection shall be payable from time to time
on demand and (ii) interest on Revolving Loans and Term Loans shall also be
payable on the date such Loans become due and payable in accordance with Section
10.
5.9 Computation of Interest and Fees. (a) Whenever it is calculated
on the basis of the Reference Rate or with reference to Revolving Offshore Loans
in British Pounds Sterling, interest shall be calculated on the basis of a 365-
(or 366-, as the case may be) day year for the actual days elapsed; and,
otherwise, interest and fees shall be calculated on the basis of a 360-day year
for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the relevant Borrowers and the relevant Lenders of each
determination of a Eurodollar Rate or of an Offshore Rate. Any change in the
interest rate on a Loan resulting from a change in the Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the relevant Borrowers and the
relevant Lenders of the effective date and the amount of each such change in
interest rate.
(b) Each determination of an interest rate by the Administrative
Agent or a Fronting Lender pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrowers and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrowers,
deliver to the Borrowers a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to subsection
5.8(a) or (b).
5.10 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period or the Offshore Rate for such Interest Period in
respect of any Eligible
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Offshore Currency (an "affected Offshore Currency"), or
(b) the Administrative Agent shall have received notice from the
Majority Lenders that the Eurodollar Rate or the Offshore Rate determined
or to be determined for such Interest Period in respect of any Eurodollar
Loan or Revolving Offshore Loan in an affected Offshore Currency will not
adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans
during such Interest Period, or
(c) a Fronting Lender shall have determined (which determination
shall be conclusive and binding upon the Borrowers) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining the Cost of Funds for such Interest Period
in respect of any Fronted Offshore Currency (any such currency shall also
be an "affected Offshore Currency"),
the Administrative Agent (or the relevant Fronting Lender, in the case of clause
(c) above) shall give telecopy or telephonic notice thereof to the Company, the
European Payment Agent and the Lenders (and, in the case of any notice by a
Fronting Lender, the Administrative Agent) as soon as practicable during normal
business hours thereafter (but in any event prior to the first day of such
Interest Period). If such notice is given (v) any Eurodollar Loans requested to
be made on the first day of such Interest Period shall be made as Base Rate
Loans, (w) any request to convert Base Rate Loans on the first day of such
Interest Period to Eurodollar Loans shall be ineffective, (x) any outstanding
Eurodollar Loans shall be converted, on the first day of such Interest Period,
to Base Rate Loans, (y) any Offshore Currency Loans in an affected Offshore
Currency requested to be made on the first day of such Interest Period shall not
be made and (z) any outstanding Offshore Currency Loans in an affected Offshore
Currency shall be due and payable on the first day of such Interest Period.
Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans or Offshore Currency Loans in an affected Offshore Currency, as
the case may be, shall be made or continued as such, nor shall the Borrowers
have the right to convert Base Rate Loans to Eurodollar Loans.
5.11 Pro Rata Treatment and Payments. (a) Except as provided in
subsections 3.5(a), 4.3(a) and 5.3(b), all payments (including prepayments) to
be made by a Borrower hereunder in respect of Letters of Credit and Loans,
whether on account of principal, interest, fees or otherwise, shall be made
without set off or counterclaim and shall be made prior to 11:00 A.M., San
Francisco time, on the due date thereof to the Administrative Agent, for the
account of the relevant Lenders, at the Administrative Agent's Payment Office in
Dollars or, in the case of payments of principal of and interest on Offshore
Currency Loans, in the currency in which such Loans are denominated and in
immediately available funds in such currency. The Administrative Agent or the
European Payment Agent, as applicable, shall distribute such payments to the
Lenders entitled to receive the same promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on Eurodollar Loans or
Revolving Offshore Loans) becomes due and payable on a day other than a Banking
Day, such payment shall be extended to the next succeeding Banking Day, and,
with respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension. If any payment on a Eurodollar Loan
or a Revolving Offshore Loan becomes due and payable on a day other than a
Banking Day, the maturity thereof shall be extended to the next succeeding
Banking Day (and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension) unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Banking
Day.
(b) All payments (including prepayments) to be made by a Subsidiary
Borrower hereunder in respect of Fronted Offshore Loans, on account of principal
and interest thereon, shall be made without set off or counterclaim and shall be
made prior to 11:00 A.M., local time, on the due date
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thereof to the relevant Fronting Lender, at the Fronting Lender's Payment Office
in the currency in which such Loans are denominated and in immediately available
funds in such currency. If any payment of principal or interest on a Fronted
Offshore Loan becomes due and payable on a day other than a Banking Day, such
payment shall be extended to the next succeeding Banking Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
(c) Unless the Administrative Agent or, in the case of a borrowing
of Revolving Offshore Loans, the European Payment Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its portion of such borrowing available to the
Administrative Agent or the European Payment Agent, as the case may be, the
Administrative Agent and the European Payment Agent may assume that such Lender
is making such amount available to the Administrative Agent or the European
Payment Agent, as the case may be, and the Administrative Agent and the European
Payment Agent may, in reliance upon such assumption, make available to the
relevant Borrowers a corresponding amount. If such amount is not made available
to the Administrative Agent or the European Payment Agent, as the case may be,
by the required time on the Borrowing Date therefor, such Lender shall pay to
the Administrative Agent or the European Payment Agent, as the case may be, on
demand, such amount with interest thereon at a rate equal to the daily average
cost of funding such amount (as determined by the Administrative Agent or the
European Payment Agent, as the case may be) for the period until such Lender
makes such amount immediately available to the Administrative Agent or the
European Payment Agent, as the case may be, together with a customary
administrative fee with respect thereto. A certificate of the Administrative
Agent or the European Payment Agent, as the case may be, submitted to any Lender
with respect to any amounts owing under this subsection shall be conclusive in
the absence of manifest error. If such Lender's portion of such borrowing is not
made available to the Administrative Agent or the European Payment Agent, as the
case may be, by such Lender within three Banking Days of such Borrowing Date,
the Administrative Agent or the European Payment Agent, as the case may be,
shall also be entitled to recover such amount with interest thereon at the rate
per annum equal to the higher of (i) the rate specified in the second sentence
of this paragraph and (ii) the rate applicable to Base Rate Loans, on demand,
from the Borrowers.
(d) Each borrowing by the Borrowers of Term and Revolving Loans
shall be made ratably from the Term Lenders and Revolving Lenders, respectively,
in accordance with their respective Term Commitment Percentages and Revolving
Commitment Percentages. Any reduction of the Term Commitments or the Revolving
Commitments shall be made ratably among the Term Lenders or Revolving Lenders,
in accordance with their respective Term Commitment Percentages or Revolving
Commitment Percentages. Each payment (including each prepayment) by the
Borrowers on account of principal of and interest on the Term Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Term Loans then held by the Term Lenders. Each payment (including each
prepayment) by the Borrowers on account of principal of and interest on the
Revolving Loans shall be made pro rata according to the respective outstanding
principal amounts of the Revolving Loans then held by the Revolving Lenders.
5.12 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans or Offshore Currency Loans as contemplated by this Agreement,
(a) the commitment of such Lender hereunder to make such Type of Loans, continue
Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be
cancelled, (b) such Lender's Loans then outstanding as Eurodollar Loans, if any,
shall be converted automatically to Base Rate Loans on the respective last days
of the then current Interest Periods with respect to such Loans or within such
earlier period as required by law and (c) such Lender's Offshore Currency Loans,
if any, shall be due on the respective last days of the then current Interest
Periods with respect to such Loans or
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48
within such earlier period as required by law. If any such conversion of a
Eurodollar Loan or repayment of an Offshore Currency Loan occurs on a day which
is not the last day of the then current Interest Period with respect thereto,
the Parent Borrowers shall (or shall cause the applicable Subsidiary Borrower
to) pay to such Lender such amounts, if any, as may be required pursuant to
subsection 5.15. During any such period of illegality any Loans that, but for
the application of the preceding sentence would have been maintained as
Revolving Offshore Loans, shall be made and maintained by the affected Lender as
Base Rate Loans.
5.13 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note, any Eurodollar Loan, any Offshore
Currency Loan or any Letter of Credit made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by subsection 5.14 and changes in the rate of
tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate, the Offshore Rate or the Cost of Funds hereunder;
or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or Offshore Currency Loans or issuing
or participating in Letters of Credit or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, within 15 days after
demand therefor (accompanied by the certificate contemplated by subsection
5.13(c) with respect thereto), the Parent Borrowers shall (or cause the
applicable Subsidiary Borrower to) pay to such Lender such additional amount or
amounts as will compensate such Lender for such increased cost or reduced amount
receivable.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, within 15 days
after demand therefor (accompanied by the certificate contemplated by subsection
5.13(c) with respect thereto), the Parent Borrowers shall promptly pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Company (with a copy
to the Administrative Agent) of the event
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by reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this subsection submitted by such Lender to the
Company (with a copy to the Administrative Agent) shall be conclusive in the
absence of manifest error. The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
5.14 Taxes. (a) All payments made by the Borrowers under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
as a result of a present or former connection between the Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Note), provided that all
payments to be made by the Fronting Lenders pursuant to subsection 4.3(b) shall,
for purposes of this subsection, be deemed to be a payment by the relevant
Borrowers. If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Administrative Agent, the European
Payment Agent or any Lender hereunder or under any Note, the amounts so payable
to the Administrative Agent, the European Payment Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent, the
European Payment Agent or such Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the Borrowers shall
not be required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof if
such Lender fails to comply with the requirements of paragraph (b) of this
subsection. Whenever any Non-Excluded Taxes are payable by the Borrowers, as
promptly as possible thereafter the Borrowers shall send to the Administrative
Agent for its own account or for the account of such Lender, as the case may be,
a certified copy of an original official receipt received by the Borrowers
showing payment thereof. If the Borrowers fail to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Parent Borrowers shall indemnify the Administrative Agent and the
Lenders for any incremental taxes, interest or penalties that may become payable
by the Administrative Agent or any Lender as a result of any such failure. The
Parent Borrowers shall make any payments required pursuant to the immediately
preceding sentence within 15 days after receipt of a written demand therefor
from the Administrative Agent or any Lender, as the case may be. The agreements
in this subsection shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) deliver to the Borrowers and the Administrative Agent (A) two
duly completed copies of United States Internal Revenue Service Form 1001
or 4224, or successor applicable form, as the case may be, and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable form, as
the case may be;
(ii) deliver to the Borrowers and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrowers; and
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(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrowers or
the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrowers and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax. Each Person that shall become a Lender or a
Participant pursuant to subsection 13.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this subsection, provided that in the case of a Participant
such Participant shall furnish all such required forms and statements to the
Lender from which the related participation shall have been purchased.
(c) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement and any Note
pursuant to the law of the relevant jurisdiction or any treaty shall deliver to
the Borrowers (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate.
5.15 Indemnity. Each Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by such Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans or Offshore Currency
Loans after such Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement, (b) default by such Borrower in making
any prepayment after such Borrower has given a notice thereof in accordance with
the provisions of this Agreement or (c) the making by such Borrower of a
prepayment of Eurodollar Loans or Offshore Currency Loans on a day which is not
the last day of an Interest Period with respect thereto. Any such loss shall be
an amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. This covenant shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
5.16 Change of Lending Office. Each Lender agrees that if it makes
any demand for payment under subsection 5.13 or 5.14(a), or if any adoption or
change of the type described in subsection 5.12 shall occur with respect to it,
it will use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrowers to make payments under subsection 5.13 or
5.14(a), or would eliminate or reduce the effect of any adoption or change
described in subsection 5.12.
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5.17 Subsidiary Borrowers. The Parent Borrowers may designate any
Foreign Subsidiary of the Company as a Subsidiary Borrower by delivery to the
Administrative Agent of a Borrowing Subsidiary Agreement executed by such
Subsidiary and the Company and upon such delivery such Subsidiary shall for all
purposes of this Agreement be a Subsidiary Borrower and a party to this
Agreement until the Parent Borrowers shall have executed and delivered to the
Administrative Agent a Borrowing Subsidiary Termination with respect to such
Subsidiary, whereupon such Subsidiary shall cease to be a Subsidiary Borrower
and a party to this Agreement. Notwithstanding the preceding sentence, no
Borrowing Subsidiary Termination will become effective as to any Subsidiary
Borrower at a time when any principal of or interest on any Loan to such
Subsidiary Borrower shall be outstanding hereunder, provided that such Borrowing
Subsidiary Termination shall be effective to terminate such Subsidiary
Borrower's right to make further borrowings under this Agreement.
SECTION 6. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans and issue or participate in the Letters of
Credit, each of the Parent Borrowers hereby jointly and severally represents and
warrants, and each of the Subsidiary Borrowers severally represents and warrants
(solely with respect to the representations and warranties contained in
subsections 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12, 6.14, 6.15,
6.16(b), 6.17 and 6.21 to the extent applicable to such Subsidiary Borrower and
its Subsidiaries), to the Administrative Agent and each Lender that:
6.1 Financial Condition. (a) The Consolidated balance sheet of Y&R
Inc. (New York) and its Consolidated Subsidiaries as at December 31, 1995 and
the related Consolidated statements of income and of cash flows for the fiscal
year ended on such date, reported on by Price Waterhouse LLP, copies of which
have heretofore been furnished to each Lender, present fairly the Consolidated
financial condition of Y&R Inc. (New York) and its Consolidated Subsidiaries as
at such date, and the Consolidated results of their operations and their
Consolidated cash flows for the fiscal year then ended. The unaudited
Consolidated balance sheet of Y&R Inc. (New York) and its Consolidated
Subsidiaries as at June 30, 1996 and the related unaudited Consolidated
statements of income and of cash flows for the six-month period ended on such
date, certified by a Responsible Officer of Y&R Inc. (New York), copies of which
have heretofore been furnished to each Lender, present fairly the Consolidated
financial condition of Y&R Inc. (New York) and its Consolidated Subsidiaries as
at such date, and the Consolidated results of their operations and their
Consolidated cash flows for the six-month period then ended (subject to normal
year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by such
accountants or a Responsible Officer of Y&R Inc. (New York), as the case may be,
and as disclosed therein). Neither Y&R Inc. (New York) nor any of its
Consolidated Subsidiaries had, at the date of the most recent balance sheet
referred to above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign currency
swap or exchange transaction, which is not reflected in the foregoing statements
or in the notes thereto. Except as set forth on Schedule 6.1, during the period
from December 31, 1995 to and including the date hereof there has been no sale,
transfer or other disposition by Y&R Inc. (New York) or any of its Consolidated
Subsidiaries of any material part of its business or property and no purchase or
other acquisition of any business or property (including any capital stock of
any other Person) material in relation to the Consolidated financial condition
of Y&R Inc. (New York) and its Consolidated Subsidiaries, taken as a whole, at
December 31, 1995.
(b) The unaudited pro forma Consolidated balance sheet of the
Company and its
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Consolidated Subsidiaries as at June 30, 1996 and the unaudited pro forma
Consolidated statements of income of the Company and its Subsidiaries for the
fiscal year ended December 31, 1995 and the six-month period ended June 30,
1996, certified by a Responsible Officer of the Company, copies of which have
been heretofore furnished to each Lender, adjusted to give effect to (as if such
events had occurred on such date) (i) the Recapitalization, (ii) the
Refinancing, (iii) the extensions of credit to the Borrowers hereunder on the
Closing Date and on the Second Drawdown Date, and (iv) the fees, expenses and
financing costs related to the foregoing, together with the notes thereto, were
prepared based on good faith assumptions and on the best information available
to the Company as of the date of delivery thereof and fairly present on a pro
forma basis the Consolidated financial position of the Company and its
Consolidated Subsidiaries as at June 30, 1996 and the Consolidated results of
their operations for the periods specified above, in each case as adjusted, as
described above, assuming such events had occurred at June 30, 1996 or at the
beginning of such period, as the case may be.
6.2 No Change. Since December 31, 1995, (a) there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) except as set forth on Schedule 6.2, during the
period from December 31, 1995, to and including the date hereof, no dividends or
other distributions have been declared, paid or made upon the Capital Stock of
the Company nor has any of the Capital Stock of the Company been redeemed,
retired, purchased or otherwise acquired for value by the Company or any of its
Subsidiaries except (i) the purchase of Equity Interests pursuant to the
Recapitalization and (ii) annual dividends and distributions, made in accordance
with past practice, on October 8, 1996, in an aggregate amount not exceeding
$1,700,000.
6.3 Existence; Compliance with Law. Such Borrower and each of its
Operating Subsidiaries (a) is duly organized and validly existing under the laws
of the jurisdiction of its organization and, where applicable and except where
the failure to be so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, is in good standing under the laws
of the jurisdiction of its organization, (b) has the power and authority, and
the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign organization and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified and/or in good standing could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect, and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.4 Corporate Power; Authorization; Enforceable Obligations. Such
Borrower has the power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and to borrow hereunder and
has taken all necessary action to authorize the borrowings on the terms and
conditions of this Agreement and any Notes and to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Loan Documents to which such
Borrower is a party. This Agreement has been, and each other Loan Document to
which it is a party will be, duly executed and delivered on behalf of such
Borrower. This Agreement constitutes, and each other Loan Document to which it
is a party when executed and delivered will constitute, a legal, valid and
binding obligation of such Borrower enforceable against such Borrower in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
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6.5 No Legal Bar. The execution, delivery and performance of the
Loan Documents to which such Borrower is a party, the borrowings hereunder and
the use of the proceeds thereof will not violate any Requirement of Law or
Contractual Obligation of such Borrower or of any of its Subsidiaries and will
not result in, or require, the creation or imposition of any Lien on any of its
or their respective properties or revenues pursuant to any such Requirement of
Law or Contractual Obligation.
6.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of such Borrower, threatened by or against such Borrower or any
of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby or (b) which could reasonably be
expected to have a Material Adverse Effect.
6.7 No Default. Neither such Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
6.8 Ownership of Property; Liens. Such Borrower and each of its
Subsidiaries has good record and marketable title in fee simple to all its owned
real property and such Borrower and each of its Subsidiaries has a valid
leasehold interest or occupancy rights with respect to all real property leased
or occupied pursuant to the Material Leases, and none of such owned real
property is subject to any Lien except as permitted by subsection 9.3. Such
Borrower and each of its Subsidiaries has such title to their respective
personal property and assets, tangible and intangible, as is necessary to
conduct their respective businesses in the same manner as such businesses have
been conducted, and none of such property is subject to any Lien except as
permitted by subsection 9.3. Schedule 6.8 sets forth a true and complete list of
all parcels of real property owned by such Borrower and its Subsidiaries as of
the Closing Date.
6.9 Intellectual Property. Such Borrower and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted (the "Intellectual Property") except for those
the failure to own or license which could not reasonably be expected to have a
Material Adverse Effect. No claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does such
Borrower know of any valid basis for any such claim, except for any such claims
which, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. The use of such Intellectual Property by such Borrower and its
Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
6.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of such Borrower or any of its Operating Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
6.11 Taxes. Such Borrower and each of its Subsidiaries has filed or
caused to be filed all tax returns which, to the knowledge of such Borrower, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of such Borrower or its Subsidiaries, as the case may be, and other than,
in the case of jurisdictions outside the United States, where failures to timely
and properly file could not,
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individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect); except as set forth on Schedule 6.11, no tax Lien has been
filed, and, to the knowledge of such Borrower, no claim is being asserted, with
respect to any such tax, fee or other charge (other than, in the case of
jurisdictions outside the United States, such Liens, taxes, fees and other
charges as could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect).
6.12 Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation G or Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. If requested by any Lender or the Administrative Agent,
such Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-1 or FR Form U-1 referred to in said Regulation G or Regulation U, as the case
may be.
6.13 ERISA. Except as set forth on Schedule 6.13, neither a
Reportable Event nor an "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Plan, and each Plan has complied in all material
respects with the applicable provisions of ERISA and the Code. No termination of
a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan
has arisen, during such five-year period. Except as set forth on Schedule 6.13,
the present value of all accrued benefits under each Single Employer Plan (based
on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither such Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither such
Borrower nor any Commonly Controlled Entity would become subject to any
liability under ERISA if such Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
6.14 Investment Company Act; Other Regulations. Such Borrower is not
an "investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. Such
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
6.15 Subsidiaries. Schedule 6.15 sets forth a true and complete list
of all the Operating Subsidiaries of such Borrower at the date hereof and the
percentage of the Capital Stock of such Operating Subsidiary owned directly and
indirectly by such Borrower.
6.16 Purpose of Loans. (a) The proceeds of the Term Loans on the
Closing Date shall be used by the Parent Borrowers to finance a portion of the
Recapitalization and the Refinancing and to pay related fees and expenses. The
proceeds of the Term Loans on the Second Drawdown Date shall be used by the
Parent Borrowers to redeem or acquire the Remaining Equity Interests and to pay
any interest payable in connection therewith.
(b) The proceeds of the Revolving Loans and Fronted Offshore Loans
shall be used by the relevant Borrowers to finance a portion of the
Recapitalization, the Refinancing, to pay related fees and expenses and for
working capital purposes of such Borrowers and their respective Subsidiaries in
the ordinary course of business.
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6.17 Environmental Matters.
(a) To the best knowledge of such Borrower, the facilities and
properties owned, leased or operated by such Borrower or any of its
Subsidiaries (the "Properties") do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts or
concentrations which (i) constitute or constituted a violation of, or (ii)
could reasonably be expected to give rise to liability under, any
Environmental Law, except in either case insofar as such violation or
liability, or any aggregation thereof, could not reasonably be expected to
have a Material Adverse Effect.
(b) To the best knowledge of such Borrower, the Properties and all
operations at the Properties are in compliance, and have in the last five
years been in compliance, in all material respects with all applicable
Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any Environmental Law with respect to the
Properties or the business operated by the Borrower or any of its
Subsidiaries (the "Business"), except in either case insofar as any such
noncompliance, contamination or violation, or any aggregation thereof,
could not reasonably be expected to have a Material Adverse Effect.
(c) Neither such Borrower nor any of its Subsidiaries has received
any notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business,
nor does such Borrower have knowledge or reason to believe that any such
notice will be received or is being threatened, except insofar as such
notice or threatened notice, or any aggregation thereof, could not
reasonably be expected to have a Material Adverse Effect.
(d) To the best knowledge of such Borrower, Materials of
Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location which could
reasonably be expected to give rise to liability under, any Environmental
Law, nor have any Materials of Environmental Concern been generated,
treated, stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that could reasonably be expected to give
rise to liability under, any applicable Environmental Law, except insofar
as any such violation or liability referred to in this paragraph, or any
aggregation thereof, could not reasonably be expected to have a Material
Adverse Effect.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of such Borrower, threatened, under any
Environmental Law to which such Borrower or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or
the Business, except insofar as such proceeding, action, decree, order or
other requirement, or any aggregation thereof, could not reasonably be
expected to have a Material Adverse Effect.
(f) To the best knowledge of such Borrower, there has been no
release or threat of release of Materials of Environmental Concern at or
from the Properties, or arising from or related to the operations of such
Borrower or any Subsidiary in connection with the Properties or otherwise
in connection with the Business, in violation of or in amounts or in a
manner that could reasonably give rise to liability under Environmental
Laws, except insofar as any such violation or liability referred to in
this paragraph, or any aggregation thereof, could not reasonably be
expected to have a Material Adverse Effect.
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6.18 Regulation H. No Mortgage encumbers improved real property
which is located in an area that has been identified by the Secretary of Housing
and Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968.
6.19 Accuracy of Information. No statement or information contained
in this Agreement, any other Loan Document, or any other document, certificate
or written statement furnished to the Administrative Agent or the Lenders or any
of them (including, without limitation, the Recapitalization Documents), by or
on behalf of any Loan Party for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents (including, without
limitation, any financial information furnished pursuant to subsection 8.1),
taken as a whole, contained as of the date such statement, information, document
or certificate was so furnished any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
contained herein or therein in light of the circumstances in which it was made
not misleading. The projections and pro forma financial information contained in
the materials referenced above are based upon good faith estimates and
assumptions believed by management of such Borrower to be reasonable at the time
made, it being recognized by the Lenders that such financial information as it
relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein. There is no fact known to any Loan
Party that could reasonably be expected to have a Material Adverse Effect that
has not been expressly disclosed herein, in the other Loan Documents, or in such
other documents, certificates and statements furnished to the Administrative
Agent for the benefit of the Lenders (including, without limitation, the
Recapitalization Documents) for use in connection with the transactions
contemplated hereby and by the other Loan Documents.
6.20 Security Documents. (a) Each of the Pledge Agreements is
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Pledged Stock
(as defined therein), and proceeds thereof and, when the stock certificates
representing the Pledged Stock are delivered to the Administrative Agent, each
such Pledge Agreement shall constitute a fully perfected first priority Lien on,
and security interest in, all right, title and interest of the pledgor in
respect thereof in such Pledged Stock and the proceeds thereof in favor of the
Administrative Agent for the benefit of the Lenders, in each case (except as may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally) prior and superior in right
to any other Person.
(b) Each Security Agreement is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral described therein and proceeds
thereof; when financing statements in appropriate form are filed in the offices
specified on Schedule 6.20, except as set forth in such Security Agreement, such
Security Agreement constitutes a fully perfected Lien on, and security interest
in, all right, title and interest of the Loan Parties in such Collateral and, to
the extent provided therein, the proceeds thereof in favor of the Administrative
Agent for the benefit of the Lenders, in each case (except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally) prior and superior in right to any other
Person, other than with respect to Liens expressly permitted by subsection 9.3.
6.21 Solvency. Such Borrower and each of its Subsidiaries which is a
Guarantor is, and after giving effect to the incurrence or assumption of all
Indebtedness and obligations being incurred or assumed in connection herewith
and the Recapitalization will be and will continue to be, Solvent.
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6.22 Continuing Letters of Credit. Schedule 6.22 is a true and
complete list, by reference to the aggregate face amounts of letters of credit
issued by the Persons listed thereon, of all letters of credit that are
outstanding as of the dates set forth in such Schedule. The list delivered
pursuant to subsection 7.1(y) shall be deemed to supplement Schedule 6.22.
SECTION 7. CONDITIONS PRECEDENT
7.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, immediately prior to or concurrently with the
making of such extension of credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of
each of the Parent Borrowers, with a counterpart for the Administrative
Agent and each Lender, (ii) an executed Addendum (or a copy thereof by
facsimile transmission) from each Person listed on Schedule 1.1(a),
provided, that, notwithstanding the foregoing, in the event that an
Addendum has not been duly executed and delivered by each Person listed on
Schedule 1.1(a) on the date (which shall be no earlier than the date
hereof) on which this Agreement shall have been executed and delivered by
each of the Parent Borrowers and the Administrative Agent, the condition
set forth in this subsection 7.1(a)(ii) shall, subject to satisfaction of
the other conditions precedent set forth in this subsection 7.1,
nevertheless be satisfied on such date with respect to those Persons which
have executed and delivered an Addendum on or before such date if on such
date each of the Parent Borrowers and the Administrative Agent shall have
designated one or more banks, financial institutions or other entities
("Designated Lenders") to assume, in the aggregate, all of the Commitments
which would have been held by the Persons listed on Schedule 1.1(a) (the
"Non-Executing Persons") which have not so executed an Addendum (subject
to each such Designated Lender's prior written consent in its sole
discretion and its execution of an Addendum) (Schedule 1.1(a) shall
automatically be deemed to be amended to reflect the respective
Commitments of the Designated Lenders and the omission of the
Non-Executing Persons as Lenders hereunder), (iii) each of the Security
Documents, each executed and delivered by a duly authorized officer of
each Loan Party which is a party thereto, with a counterpart for the
Administrative Agent and a copy for each Lender and (iv) the Subsidiaries
Guarantee, executed and delivered by a duly authorized officer of each
Loan Party which is a party thereto, with a counterpart for the
Administrative Agent and a copy for each Lender.
(b) Equity Proceeds and Roll-Over. The Administrative Agent shall
have received evidence satisfactory to it that Y&R Holdings shall have
received (i) at least $225,000,000 in cash from the issuance of its common
stock to the H&F Group and certain Director Investors (as defined in the
Contribution Agreement) and (ii) at least $201,000,000 in cash from the
issuance of its common stock to the Management Investors and/or in the
form of the contribution of Equity Interests by the Management Investors
to Y&R Holdings (including up to $5,000,000 in promissory notes payable
out of the cash to be paid with respect to the redemption or acquisition
of the Remaining Equity Interests on the Second Drawdown Date (the
"Management Investor Notes")); provided that the aggregate amount of the
capital contributed to Y&R Holdings by the H&F Group, the Director
Investors (as defined in the Contribution Agreement) and the Management
Investors in cash (and, in the case of the Management Investors, in the
form of the contribution of Equity Interests and Management Investor Notes
by the Management Investors to Y&R Holdings) shall be at least
$460,000,000.
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(c) Offers to Acquire and Initial Acquisition of Equity Interests.
The Administrative Agent shall have received evidence satisfactory to it
that Y&R Holdings and the Company shall have made offers to purchase or to
settle for cash compensation outstanding Equity Interests on the terms and
conditions set forth in the Contribution Agreement (the "Offers" and
"Special Compensation Arrangements") and there shall have been tendered
for purchase and purchased pursuant to the Offers or cancelled in
connection with the Special Compensation Arrangements, (i) not less than a
majority in the aggregate of the common stock of Y&R Inc. (New York),
options to purchase such common stock, and "growth participation units" of
Y&R Inc. (New York) not being contributed to Y&R Holdings by the Initial
Management Investors and (ii) not less than a majority in the aggregate of
the limited partnership units of Y&R LP, options to purchase such units
and "growth participation units" of Y&R LP not being contributed to Y&R
Holdings by the Initial Management Investors.
(d) Recapitalization Documentation. The Administrative Agent shall
have received evidence satisfactory to it that no material provision of
the documentation pursuant to which the Recapitalization shall be effected
(the "Recapitalization Documentation"), including, without limitation, the
Contribution Agreement, the offering documents with respect to the Offers,
the merger agreements relating to the Mergers, and the Stockholders'
Agreement (true and complete copies of which have been furnished to the
Lenders) shall have been waived, amended, supplemented or otherwise
modified without the prior approval of the Administrative Agent.
(e) Right to Effect Subsequent Acquisition of Equity Interests. The
Administrative Agent shall have received evidence satisfactory to it that
after giving effect to the transactions that occur on the Closing Date
pursuant to the Recapitalization Documentation, Y&R Holdings shall have
the right to consummate the Holdings Merger and the Partnership Merger and
all other transactions contemplated in order to complete the
Recapitalization and to acquire or redeem all Remaining Equity Interests
outstanding on the Closing Date without the consent of any other person,
subject only to state law appraisal rights, if any.
(f) Capital Structure. The Administrative Agent shall have received
evidence satisfactory to it that the Consolidated capital structure of the
Company after the Recapitalization shall be as set forth in the
Recapitalization Documentation, after giving effect to the transactions to
occur on the Closing Date and the Second Drawdown Date.
(g) Borrower Closing Certificate. The Administrative Agent shall
have received, with a copy for each Lender, a certificate of each Parent
Borrower, dated the Closing Date, substantially in the form of Exhibit Q,
with appropriate insertions and attachments, satisfactory in form and
substance to the Administrative Agent.
(h) Proceedings of Each Parent Borrower. The Administrative Agent
shall have received, with a copy for each Lender, a copy of the
resolutions or other analogous actions, in form and substance satisfactory
to the Administrative Agent, of the Board of Directors or other analogous
body of each Parent Borrower authorizing (i) the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is
a party, (ii) the borrowings contemplated hereunder and (iii) the granting
by it of the Liens created pursuant to the Parent Borrower Security
Documents to which it is a party, certified by such Parent Borrower as of
the Closing Date, which certificate shall be in form and substance
satisfactory to the Administrative Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded.
(i) Parent Borrower Incumbency Certificates. The Administrative
Agent shall have
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received, with a copy for each Lender, a certificate of each Parent
Borrower, dated the Closing Date, as to the incumbency and signature of
the Persons executing any Loan Document on behalf of such Parent Borrower,
which certificate shall be satisfactory in form and substance to the
Administrative Agent.
(j) Proceedings of Subsidiaries. The Administrative Agent shall have
received, with a counterpart for each Lender, a copy of the resolutions,
in form and substance satisfactory to the Administrative Agent, of the
Board of Directors of each Subsidiary of each Parent Borrower which is a
Loan Party authorizing (i) the execution, delivery and performance of the
Loan Documents to which it is a party and (ii) the granting by it of the
Liens created pursuant to the Subsidiaries Security Documents to which it
is a party, certified by the Secretary or an Assistant Secretary (or other
appropriate officer) of each such Subsidiary as of the Closing Date, which
certificate shall be in form and substance satisfactory to the
Administrative Agent and shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded.
(k) Subsidiary Incumbency Certificates. The Administrative Agent
shall have received, with a copy for each Lender, a certificate of each
Subsidiary of each Parent Borrower which is a Loan Party, dated the
Closing Date, as to the incumbency and signature of the officers of each
such Subsidiary executing any Loan Document, which certificate shall be
satisfactory in form and substance to the Administrative Agent and shall
be executed by the President or any Vice President and the Secretary or
any Assistant Secretary (or other appropriate officer) of each such
Subsidiary.
(l) Organizational Documents. The Administrative Agent shall have
received, with a copy for each Lender, true and complete copies of the
certificate of incorporation and by-laws or other analogous organizational
documents of each Loan Party, certified as of the Closing Date as complete
and correct copies thereof by the Secretary or an Assistant Secretary or
other authorized representative of such Loan Party.
(m) Consents, Licenses and Approvals. All governmental and third
party approvals necessary in connection with the Recapitalization, the
financing contemplated hereby and the continuing operations of the Parent
Borrowers and their Subsidiaries shall have been obtained and be in full
force and effect, and 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.
(n) Fees. The Administrative Agent shall have received the fees
required to be paid to the Administrative Agent and the Lenders on or
prior to the Closing Date and any invoices for expenses payable hereunder
presented for payment at least two Business Days prior to the Closing Date
shall have been paid by the Borrowers.
(o) Legal Opinions and Reliance Letters. The Administrative Agent
shall have received, with a copy for each Lender, the following executed
legal opinions:
(i) the executed legal opinion of Wachtell, Lipton, ▇▇▇▇▇ &
▇▇▇▇ special counsel to the Parent Borrowers and the other Loan
Parties, substantially in the form of Exhibit R-1;
(ii) the executed legal opinion of ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
General Counsel of Y&R Inc. (New York), substantially in the form of
Exhibit R-2; and
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(iii) the executed legal opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, in form and substance satisfactory to the Administrative
Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(p) Pledged Stock; Stock Powers; Acknowledgement and Consents. The
Administrative Agent shall have received (i) the certificates representing
the shares of Capital Stock pledged pursuant to each of the Pledge
Agreements, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer or representative of the
pledgor thereof and (ii) an Acknowledgement and Consent from each issuer
of such pledged shares in the form attached to the relevant Pledge
Agreement, executed and delivered by a duly authorized officer or
representative of such issuer. To the extent that (i) any of the Pledged
Stock of any Foreign Issuer (as defined in the Pledge Agreements) is
evidenced or represented by certificates, the Parent Borrowers shall take
such actions (including registrations and filings) on or prior to the
Closing Date (or as soon thereafter as practicable) as may be required
under applicable law in connection with and to give effect to the grant of
a first security interest therein pursuant to the Pledge Agreements and
(ii) certificates representing the shares of Capital Stock of any Foreign
Issuer pledged pursuant to the Pledge Agreements shall not be delivered on
the Closing Date, the Administrative Agent shall be satisfied that such
certificates shall be delivered to the Administrative Agent promptly
following the Closing Date.
(q) Actions to Perfect Liens. The Administrative Agent shall have
received evidence in form and substance satisfactory to it that all UCC
financing statements have been filed (or arrangements satisfactory to the
Administrative Agent shall have been made to file such UCC financing
statements) in such jurisdictions as shall be necessary or advisable to
perfect the personal property security interests of the Lenders created
pursuant to the Security Documents.
(r) Surveys. The Administrative Agent shall have received, and the
title insurance company issuing the report referred to in subsection
7.1(s) (the "Title Insurance Company") shall have received, maps or plats
of an as-built survey of the sites of the property covered by each
Mortgage certified to the Administrative Agent and the Title Insurance
Company in a manner satisfactory to them, dated a date satisfactory to the
Administrative Agent and the Title Insurance Company by an independent
professional licensed land surveyor satisfactory to the Administrative
Agent and the Title Insurance Company, which maps or plats and the surveys
on which they are based shall be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established
and adopted by the American Land Title Association and the American
Congress on Surveying and Mapping in 1962, and, without limiting the
generality of the foregoing, there shall be surveyed and shown on such
maps, plats or surveys the following: (i) the locations on such sites of
all the buildings, structures and other improvements and the established
building setback lines; (ii) the lines of streets abutting the sites and
width thereof; (iii) all access and other easements appurtenant to the
sites or necessary or desirable to use the sites; (iv) all roadways,
paths, driveways, easements, encroachments and overhanging projections and
similar encumbrances affecting the site, whether recorded, apparent from a
physical inspection of the sites or otherwise known to the surveyor; (v)
any encroachments on any adjoining property by the building structures and
improvements on the sites; and (vi) if the site is described as being on a
filed map, a legend relating the survey to said map.
(s) Title Reports. The Administrative Agent shall have received in
respect of each parcel covered by each Mortgage a title report,
preliminary title certificate or commitment dated
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a date reasonably satisfactory to the Administrative Agent to the effect
that title to such real property is vested in the owner thereof free and
clear of all mortgage liens and all defects and encumbrances (other than
those of a type that would be permitted under subsection 9.3(a), 9.3(b) or
9.3(e)), except such defects and encumbrances as may be approved by the
Administrative Agent.
(t) Flood Insurance. If requested by the Administrative Agent, the
Administrative Agent shall have received (i) a policy of flood insurance
which (A) covers any parcel of improved real property which is encumbered
by any Mortgage, (B) is written in an amount not less than the outstanding
principal amount of the indebtedness secured by such Mortgage which is
reasonably allocable to such real property or the maximum limit of
coverage made available with respect to the particular type of property
under the National Flood Insurance Act of 1968, whichever is less, and (C)
has a term ending not earlier than the maturity of the indebtedness
secured by such Mortgage and (ii) confirmation that the mortgagor under
such Mortgage has received the notice required pursuant to Section
208(e)(3) of Regulation H of the Board of Governors of the Federal Reserve
System.
(u) Copies of Documents. The Administrative Agent shall have
received a copy of all recorded documents referred to, or listed as
exceptions to title in, the title policy or policies or report or reports
referred to in subsection 7.1(s) and a copy, certified by such parties as
the Administrative Agent may deem appropriate, of all other documents
affecting the property covered by each Mortgage.
(v) Lien Searches. The Administrative Agent shall have received the
results of a recent search by a Person satisfactory to the Administrative
Agent, of the Uniform Commercial Code, judgment and tax lien filings which
may have been filed with respect to personal property of any Loan Party,
and the results of such search shall be satisfactory to the Administrative
Agent.
(w) Existing Credit Facilities. The Administrative Agent shall have
received evidence satisfactory to it that, concurrently with the initial
extension of credit hereunder, the Existing Credit Facilities and the
Outstanding Notes shall be repaid in full and the commitments under the
Existing Credit Facilities shall be terminated (collectively, the
"Refinancing"). The Administrative Agent shall also have received executed
copies of all payout or assignment letters, lien releases or assignments,
termination or assignment statements, satisfactions, agreements,
certificates, and other documents entered into in connection with the
Refinancing, all of which payout letters, lien releases or assignments,
termination or assignment statements, satisfactions, agreements,
certificates and other documents shall be in form and substance reasonably
satisfactory to the Administrative Agent.
(x) Fairness Opinion; Certificate of Chief Financial Officer. The
Administrative Agent and the Lenders shall have received a copy of the
fairness opinion to be rendered by Duff & ▇▇▇▇▇▇, together with a
certificate of the chief financial officer of the Company, in form and
substance reasonably satisfactory to the Administrative Agent, to the
effect that the Company is Solvent (after giving effect to the
transactions on the Closing Date) and the projections previously provided
to the Lenders were prepared in good faith based upon reasonable
assumptions.
(y) Letters of Credit. The Administrative Agent shall have received
a list setting forth as of the Closing Date all letters of credit of the
Borrowers and their Subsidiaries outstanding as of such date, together
with the face amounts and expiration dates thereof.
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(z) Certain Payments. The Administrative Agent shall have received
evidence satisfactory to it that the sum of (i) the aggregate amount paid
by the Company and its Subsidiaries on the Closing Date in respect of the
purchase of Equity Interests, (ii) the aggregate value of Equity Interests
contributed by the Management Investors to Y&R Holdings on the Closing
Date, (iii) the aggregate value of the Remaining Equity Interests on the
Closing Date, (iv) the aggregate amount paid or to be paid to the former
holders of the Equity Interests pursuant to the Recapitalization
Documentation, (v) the aggregate payments in respect of the matter
described on Schedule 6.13 and (vi) the aggregate payments in respect of
social welfare or other similar or employee taxes shall not exceed
$800,000,000, provided that to the extent that such sum at any time
exceeds $788,000,000, the Company shall be deemed to have made Restricted
Payments at such time pursuant to clause (ii) of subsection 9.7 in the
amount of such excess.
7.2 Conditions to Term Loans on Second Drawdown Date. The agreement
of each Lender to make the Term Loans on the Second Drawdown Date is subject to
the satisfaction of the following conditions precedent:
(a) No Default. No Default or Event of Default shall have occurred
and be continuing under Section 10(a) or 10(f) on the Second Drawdown
Date.
(b) Minimum Consolidated Proportionate EBITDA. The Consolidated
Proportionate EBITDA of Y&R Inc. (New York) shall be at least $127,000,000
for the year ending December 31, 1996 and the Administrative Agent shall
have received a certificate of a Responsible Officer of Y&R Inc. (New
York) to such effect.
7.3 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including, without limitation, its initial extension of credit but excluding
the making of the Term Loans on the Second Drawdown Date and any extension of
credit contemplated under subsection 13.20) is subject to the satisfaction of
the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Loan Parties in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date in
which case such representations and warranties shall be true and correct
in all material respects as of such earlier date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extension of
credit requested to be made on such date.
(c) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement, the other Loan Documents and
the Recapitalization Documentation shall be satisfactory in form and
substance to the Administrative Agent, and the Administrative Agent shall
have received such other documents and legal opinions in respect of any
aspect or consequence of the transactions contemplated hereby or thereby
as it shall reasonably request.
Each borrowing by a Parent Borrower hereunder and the issuance of each Letter of
Credit issued hereunder for the benefit of such Parent Borrower shall constitute
a representation and warranty by such Parent Borrower as of the date thereof
that the conditions contained in this subsection have been
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satisfied. Each borrowing by a Subsidiary Borrower hereunder and the issuance of
each Letter of Credit issued hereunder for the benefit of such Subsidiary
Borrower shall constitute a representation and warranty by such Subsidiary
Borrower (insofar as such conditions relate to representations and warranties or
covenants or agreements of such Subsidiary Borrower) as of the date thereof that
the conditions contained in this subsection have been satisfied.
7.4 Each Subsidiary Borrower Credit Event. The agreement of each
Lender to make the initial extension of credit requested to be made by it to any
Subsidiary Borrower on any date is subject to the satisfaction of the following
conditions precedent:
(a) Borrowing Subsidiary Agreement. The Administrative Agent shall
have received the Borrowing Subsidiary Agreement for such Subsidiary
Borrower executed and delivered by the Company and such Subsidiary
Borrower.
(b) Opinions. The Administrative Agent shall have received a
favorable written opinion of counsel for such Subsidiary Borrower (which
counsel shall be reasonably acceptable to the Administrative Agent),
substantially in the form of Exhibit R-3, and covering such other matters
(including matters of the type described in subsections 5.13 or 5.14)
relating to such Subsidiary Borrower or its Borrowing Subsidiary Agreement
as the Required Lenders shall reasonably request.
(c) Other Documents. The Administrative Agent shall have received
such documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of such Subsidiary Borrower, the authorization of the
transactions contemplated hereby relating to such Subsidiary Borrower and
any other legal matters relating to such Subsidiary Borrower, its
Borrowing Subsidiary Agreement or such transactions, all in form and
substance satisfactory to the Administrative Agent and its counsel.
SECTION 8. AFFIRMATIVE COVENANTS
Each of the Parent Borrowers hereby jointly and severally agrees,
and each of the Subsidiary Borrowers severally agrees (other than with respect
to the covenants contained in subsections 8.1, 8.2, 8.11 and 8.12), that, so
long as the Commitments remain in effect or any amount is owing to any Lender or
the Administrative Agent hereunder or under any other Loan Document, such
Borrower shall and (except in the case of delivery of financial information,
reports and notices) shall cause each of its Operating Subsidiaries to:
8.1 Financial Statements. Furnish to the Administrative Agent and
each Lender:
(a) as soon as available, but in any event within 90 days (or 120
days, in the case of the fiscal year ending December 31, 1996) after the
end of each fiscal year of the Company, a copy of the Consolidated balance
sheet of the Company and its Consolidated Subsidiaries as at
the end of such year and the related Consolidated statements of income and
retained earnings and of cash flows for such year, setting forth in each
case in comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by Price Waterhouse
LLP or other independent certified public accountants of nationally
recognized standing; and
(b) as soon as available, but in any event not later than 45 days
(or 75 days, in the case of the quarterly period ending March 31, 1997)
after the end of each of the first three quarterly
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periods of each fiscal year of the Company, the unaudited Consolidated
balance sheet of the Company and its Consolidated Subsidiaries as at the
end of such quarter and the related unaudited Consolidated statements of
income and retained earnings and of cash flows of the Company and its
Consolidated Subsidiaries for such quarter and the portion of the fiscal
year through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer of the Company as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
8.2 Certificates; Other Information. Furnish to the Administrative
Agent and each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 8.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 8.1(a) and 8.1(b), a certificate of a
Responsible Officer of the Company, substantially in the form of Exhibit
S, (i) stating that, to the best of such Officer's knowledge, during such
period (A) no Subsidiary has been formed or acquired (or, if any such
Subsidiary has been formed or acquired, the Borrowers have complied with
the requirements of subsection 8.10 with respect thereto), (B) no Borrower
nor any of its Domestic Subsidiaries has changed its name, its principal
place of business, its chief executive office or the location of any
material item of tangible Collateral without complying with the
requirements of this Agreement and the Security Documents with respect
thereto and (C) each Borrower has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained
in this Agreement and the other Loan Documents to be observed, performed
or satisfied by it, and that such Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and
(ii) setting forth in reasonable detail the calculations required to
determine compliance with subsection 9.1 (and, in the case of the
certificate delivered in connection with the financial statements
furnished pursuant to subsection 8.1(a), subsection 5.4(f)), together
with, in the event that there is any change in generally accepted
accounting principles in the United States of America subsequent to the
date hereof, a reconciliation of the calculations used to determine
compliance with subsection 9.1 to the financial statements delivered in
connection with such certificate;
(c) not later than thirty days following the beginning of each
fiscal year of the Company (commencing with the fiscal year ending
December 31, 1997), a copy of preliminary operating and cash flow budgets
of the Company and its Subsidiaries for such fiscal year (with the final
operating and cash flow budget to be delivered within 90 days after the
beginning of such fiscal year), such budgets to be accompanied by a
certificate of a Responsible Officer of the Company to the effect that
such budgets have been prepared on the basis of sound financial planning
practice and that such Officer has no reason to believe they are incorrect
or misleading in any material respect;
(d) within five days after the same are sent, copies of all
financial statements and reports
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which any Parent Borrower sends to the holders of its Capital Stock
generally, and within five days after the same are filed, copies of all
financial statements and reports which any Parent Borrower may make to, or
file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority; and
(e) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
8.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP (or, in the case of a Foreign Subsidiary, generally
accepted accounting principles in effect in the relevant jurisdiction) with
respect thereto have been provided on the books of such Borrower or its
Operating Subsidiaries, as the case may be, and except to the extent that the
failure to so pay, discharge or otherwise satisfy its obligations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
8.4 Conduct of Business and Maintenance of Existence; Compliance
with Contractual Obligations and Requirements of Law. Continue to engage in
business of the same general type as now conducted by it and preserve, renew and
keep in full force and effect its corporate existence and take all reasonable
action to maintain all material rights, privileges and franchises necessary in
the normal conduct of its business except as otherwise permitted pursuant to
subsection 9.5; comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
8.5 Maintenance of Property; Insurance. Keep all material property
useful and necessary in its business in good working order and condition
(ordinary wear and tear excepted); maintain with financially sound and reputable
insurance companies insurance on (or, to the extent consistent with prudent
business practice, a program of self-insurance with respect to) all its property
in at least such amounts and against at least such risks (but including in any
event public liability, product liability and business interruption) as are
usually insured against in the same general area by companies engaged in the
same or a similar business; and furnish to the Administrative Agent and each
Lender, upon written request, full information as to the insurance carried.
8.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in conformity with GAAP (or, in the case of
a Foreign Subsidiary, generally accepted accounting principles in effect or
applied in the relevant jurisdiction) and all Requirements of Law; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of such Borrower and
its Subsidiaries with officers and employees of such Borrower and its
Subsidiaries and with its independent certified public accountants.
8.7 Notices. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of such Borrower or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect or (ii)
litigation, investigation or proceeding which may exist at any time
between such Borrower or any of its Subsidiaries and any Governmental
Authority, as to which there is a
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reasonable possibility of an adverse determination and which, if adversely
determined, could reasonably be expected to have a Material Adverse
Effect;
(c) any non-frivolous litigation or proceeding affecting such
Borrower or any of its Subsidiaries in which the amount involved is
$2,500,000 or more and not covered by insurance or third-party
indemnification from third parties which could reasonably be expected to
satisfy any indemnification claim or in which injunctive or similar relief
is sought;
(d) the following events, as soon as possible and in any event
within 30 days after such Borrower knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by the PBGC or such Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from, or
the terminating, Reorganization or Insolvency of, any Plan; and
(e) any development or event which could reasonably be expected to
have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer of the Company setting forth details of the occurrence
referred to therein and stating what action the Parent Borrowers propose to take
with respect thereto.
8.8 Environmental Laws. (a) Comply with, and ensure compliance by
all tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply with and maintain, and ensure that all tenants and subtenants
obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, except in any such case to the extent that failure to do so could not, in
the aggregate, be reasonably expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws, except to the extent that the failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and promptly comply with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws, except to the extent that
the same are being contested in good faith by appropriate proceedings and the
pendency of such proceedings could not be reasonably expected to have a Material
Adverse Effect.
8.9 Further Assurances. Upon the request of the Administrative
Agent, promptly perform or cause to be performed any and all acts and execute or
cause to be executed any and all documents (including, without limitation,
financing statements and continuation statements) for filing under the
provisions of the Uniform Commercial Code or any other Requirement of Law which
are necessary or advisable to maintain in favor of the Administrative Agent, for
the benefit of the Lenders, Liens on the Collateral that are duly perfected in
accordance with all applicable Requirements of Law.
8.10 Additional Collateral. (a) With respect to any assets acquired
after the Closing Date by such Borrower or any of its Domestic Subsidiaries that
are intended to be subject to the Lien created by any of the Security Documents
but which are not so subject (other than any assets described in paragraph (b)
or (c) of this subsection), promptly (and in any event within 30 days after the
acquisition thereof): (i) execute and deliver to the Administrative Agent such
amendments to the relevant Security
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Documents or such other documents as the Administrative Agent shall deem
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a Lien on such assets, (ii) take all actions necessary or advisable
to cause such Lien to be duly perfected in accordance with all applicable
Requirements of Law, including, without limitation, the filing of financing
statements in such jurisdictions as may be requested by the Administrative Agent
(it being agreed that (A) no Mortgage shall be required to be executed and
delivered with respect to any parcel of real property acquired after the Closing
Date unless the book value of such parcel of real property exceeds $5,000,000
and (B) no such action shall be required pursuant to clause (ii) to perfect a
Lien (1) in assets that would not constitute UCC Filing Collateral or (2) in
assets constituting UCC Filing Collateral if such perfection relates to
collateral with an aggregate book value of less than $100,000), and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described in clauses (i) and (ii) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(b) With respect to any Person that, subsequent to the Closing Date,
becomes a Subsidiary (other than a Foreign Subsidiary), promptly upon the
request of the Administrative Agent: (i) execute and deliver (or cause to be
executed and delivered) to the Administrative Agent, for the benefit of the
Lenders, a new pledge agreement or such amendments to the relevant Pledge
Agreement as the Administrative Agent shall deem necessary or advisable to grant
to the Administrative Agent, for the benefit of the Lenders, a Lien on the
Capital Stock of such Subsidiary which is owned by such Borrower or any of its
Subsidiaries, (ii) deliver (or cause to be delivered) to the Administrative
Agent the certificates representing such Capital Stock, together with undated
stock powers executed and delivered in blank by a duly authorized officer of
such Borrower or such Subsidiary, as the case may be, (iii) if such Subsidiary
is not a Y&R Agent Subsidiary, cause such new Subsidiary (A) to become a party
to the Subsidiary Guarantee and the Subsidiary Security Agreement, in each case
pursuant to documentation which is in form and substance satisfactory to the
Administrative Agent, and (B) to take all actions necessary or advisable to
cause the Lien created by the Subsidiary Security Agreement to be duly perfected
in accordance with all applicable Requirements of Law, including, without
limitation, the filing of financing statements in such jurisdictions as may be
requested by the Administrative Agent (it being agreed that no such action shall
be required pursuant to this clause (ii) to perfect a Lien (1) in assets that
would not constitute UCC Filing Collateral or (2) in assets constituting UCC
Filing Collateral if such perfection relates to collateral with an aggregate
book value of less than $100,000), and (iv) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described in clauses (i), (ii) and (iii) immediately preceding, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(c) With respect to any Person that, subsequent to the Closing Date,
becomes a Direct Foreign Subsidiary, promptly upon the request of the
Administrative Agent: (i) execute and deliver (or cause to be executed and
delivered) to the Administrative Agent a new pledge agreement or such amendments
to the relevant Pledge Agreement as the Administrative Agent shall deem
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a Lien on the Capital Stock of such Direct Foreign Subsidiary which
is owned by such Borrower or any of its Domestic Subsidiaries (provided that in
no event shall more than 66% of the Capital Stock of any such Direct Foreign
Subsidiary be required to be so pledged), (ii) deliver (or cause to be
delivered) to the Administrative Agent any certificates representing such
Capital Stock, together with undated stock powers executed and delivered in
blank by a duly authorized officer of such Borrower or such Subsidiary, as the
case may be, and take or cause to be taken all such other actions under the law
of the jurisdiction of organization of such Direct Foreign Subsidiary as may be
necessary or advisable to perfect such Lien on such Capital Stock and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described in clauses (i) and (ii) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
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8.11 Acquisition of Remaining Equity Interests and Completion of
Recapitalization; Consummation of Holdings Merger and Partnership Merger. (a)
Except as set forth on Schedule 8.11, acquire or redeem on or prior to March 30,
1997 all Remaining Equity Interests as of the Closing Date and complete and
effect all transactions and other actions contemplated to be taken on or prior
to such date under the Recapitalization Documentation, provided that, if the
holders of any such Remaining Equity Interests elect to exercise any state law
appraisal rights to which they are entitled, the Borrowers shall acquire the
Remaining Equity Interests of such holders in accordance with all Requirements
of Law applicable to such appraisal rights.
(b) Consummate the Holdings Merger and the Partnership Merger no
later than December 31, 1996.
8.12 Interest Rate Protection. Within 180 days following the Closing
Date, enter into Interest Rate Protection Agreements with respect to at least
$100,000,000 of the Term Loans and, within 180 days following the Second
Drawdown Date, enter into Interest Rate Protection Agreements with respect to
the Term Loans such that such Interest Rate Protection Agreements shall be in
effect with respect to at least $200,000,000 of Term Loans in the aggregate,
such Interest Rate Protection Agreements to have terms and conditions and to be
in form and substance reasonably satisfactory to the Administrative Agent.
SECTION 9. NEGATIVE COVENANTS
Each of the Parent Borrowers hereby jointly and severally agrees,
and each of the Subsidiary Borrowers severally agrees (other than with respect
to subsections 9.1, 9.12 and 9.15), that, so long as the Commitments remain in
effect or any amount is owing to any Lender or the Administrative Agent
hereunder or under any other Loan Document, such Borrower shall not, and (except
with respect to subsections 9.1) shall not permit any of its Operating
Subsidiaries to, directly or indirectly:
9.1 Financial Condition Covenants.
(a) Maintenance of Net Worth. Permit Consolidated Net Worth of the
Company at any time on or after March 31, 1997 to be less than 85% of
Initial Consolidated Net Worth, or, if negative, 115% thereof plus 50% of
Consolidated Net Income of the Company, for each complete fiscal quarter
of the Company (to the extent that Consolidated Net Income for such fiscal
quarter is positive) commencing with the fiscal quarter ending June 30,
1997.
(b) Interest Coverage. Permit for any period of four consecutive
fiscal quarters of the Company ending during any Test Period set forth
below the Interest Coverage Ratio to be less than the ratio set forth
opposite such period below:
Test Period Interest Coverage Ratio
----------- -----------------------
1/1/97 through 6/30/97 3.25 to 1.00
7/1/97 through 6/30/98 3.50 to 1.00
7/1/98 through 9/30/98 3.75 to 1.00
10/1/98 through 9/30/99 4.00 to 1.00
10/1/99 through 3/31/00 4.25 to 1.00
4/1/00 through 3/31/03 4.50 to 1.00
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(c) Fixed Charge Coverage. Permit for any period of four consecutive
fiscal quarters of the Company ending during any Test Period set forth
below the Fixed Charge Coverage Ratio to be less than the ratio set forth
opposite such period below:
Test Period Fixed Charge Coverage Ratio
----------- ---------------------------
1/1/97 through 12/31/00 1.40 to 1.00
1/1/01 through 3/31/03 1.50 to 1.00
(d) Debt Coverage. Permit for any period of four consecutive fiscal
quarters of the Company ending during any Test Period set forth below the
Debt Coverage Ratio to be greater than the ratio set forth opposite such
period below:
Test Period Debt Coverage Ratio
----------- -------------------
1/1/97 through 9/30/97 4.50 to 1.00
10/1/97 through 6/30/98 3.75 to 1.00
7/1/98 through 9/30/98 3.50 to 1.00
10/1/98 through 9/30/99 3.25 to 1.00
10/1/99 through 9/30/00 2.75 to 1.00
10/1/00 through 3/31/03 2.50 to 1.00
9.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrowers under this Agreement;
(b) Indebtedness of the Company to any Subsidiary and of any
Subsidiary to the Company or any other Subsidiary of the Company, provided
that the aggregate amount of any such Indebtedness of any Y&R Agent
Subsidiary shall at no time exceed the amount required to finance the
working capital needs of such Y&R Agent Subsidiary;
(c) Indebtedness of the Borrowers and any of their respective
Subsidiaries incurred to finance the acquisition of fixed or capital
assets (whether pursuant to a loan, a Financing Lease or otherwise) (i) in
an aggregate principal amount not exceeding in the aggregate for the
Borrowers and their respective Subsidiaries $25,000,000 at any time
outstanding and (ii) in a principal amount as to any such fixed or capital
asset not exceeding an amount equal to 100% of the original purchase price
of such fixed or capital asset;
(d) Indebtedness of Foreign Subsidiaries in an aggregate principal
amount not exceeding for all Foreign Subsidiaries at any time outstanding
the sum of (i) $40,000,000 (or the Offshore Currency Equivalent thereof)
and (ii) the product of (A) $5,000,000 (or the Offshore Currency
Equivalent thereof) multiplied by (B) the number of Eligible Offshore
Currencies in respect of which no Revolving Offshore Loans are then
outstanding, provided if, a Person which makes available any such
Indebtedness has been designated as a "Designated Foreign Lender" under
the Security Documents at any time, the Borrowers' right to request
extensions of credit with respect to a portion of the Aggregate Revolving
Commitment equal to the aggregate "Maximum Qualified Foreign Indebtedness
Amount" of all such Persons at such time determined in accordance with the
Security Documents shall be temporarily suspended;
(e) Indebtedness outstanding on the date hereof and listed on
Schedule 9.2(e);
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(f) prior to the Closing Date, Indebtedness outstanding under the
Existing Credit Facilities;
(g) Indebtedness of a corporation which becomes a Subsidiary after
the date hereof, provided that (i) such indebtedness existed at the time
such corporation became a Subsidiary and was not created in anticipation
thereof and (ii) immediately after giving effect to the acquisition of
such corporation by a Borrower or a Subsidiary no Default or Event of
Default shall have occurred and be continuing;
(h) unsecured Indebtedness (not otherwise permitted by this
subsection 9.2) not exceeding in an aggregate principal amount (as to the
Borrowers and all their respective Subsidiaries) at any one time
outstanding an amount equal to the amount by which (i) the sum of (A)
$60,000,000 (or the Offshore Currency Equivalent thereof) and (B) the
product of (I) $5,000,000 (or the Offshore Currency Equivalent thereof)
multiplied by (II) the number of Eligible Offshore Currencies in respect
of which no Revolving Offshore Loans are then outstanding exceeds (ii) the
aggregate principal amount of Indebtedness then outstanding pursuant to
subsection 9.2(d);
(i) unsecured Indebtedness (not otherwise permitted by this
subsection 9.2) in an aggregate principal amount (as to the Borrowers and
all their respective Subsidiaries) incurred subsequent to the Closing Date
not to exceed $200,000,000, provided that the Net Proceeds of such
Indebtedness are used to prepay Loans pursuant to subsection 5.4(d) and/or
the Commitments are reduced by the amount of such Net Proceeds pursuant to
subsection 5.4(d);
(j) Indebtedness in respect of subordinated payment obligations
issued pursuant to Section 4.05 or 4.06 of the Stockholders' Agreement (as
in effect on the date hereof), provided that (i) such Indebtedness is
subordinated to the Indebtedness, Guarantee Obligations and Letters of
Credit of the Loan Parties under the Loan Documents on the terms and
conditions set forth on Schedule 9.2(j) or on such other terms and
conditions which are reasonably satisfactory to the Administrative Agent,
(ii) no such terms and conditions shall be amended or otherwise modified
in a manner adverse to the Lenders without the prior written consent of
the Administrative Agent and (iii) the aggregate outstanding principal
amount of all such notes shall not exceed $50,000,000 at any time;
(k) Indebtedness in respect of Hedging Agreements; and
(l) any refinancings, refundings, renewals or extensions of
Indebtedness otherwise permitted hereunder, provided that (a) the
principal amount thereof shall not be increased and (b) the subordination
provisions (if any) with respect to any Indebtedness incurred pursuant to
this paragraph are no less favorable to the Lenders than those applicable
to the refinanced, refunded renewed or extended Indebtedness.
9.3 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) (i) the Lien described on Schedule 6.11 and (ii) Liens for taxes
not yet due or which are being contested in good faith by appropriate
proceedings, provided that, in the case of clause (ii), adequate reserves
with respect thereto are maintained on the books of such Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP (or, in the case
of a Foreign Subsidiary, generally accepted accounting principles in the
relevant jurisdiction);
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(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 60 days or which are being
contested in good faith by appropriate proceedings or which are bonded;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of such
Borrower or such Subsidiary;
(f) Liens in existence on the date hereof securing Indebtedness
permitted by subsection 9.2(e) which (i) are listed on Schedule 9.3(f) or
(ii) as to Liens in respect of the assets of Foreign Subsidiaries, do not
secure Indebtedness exceeding $5,000,000 in the aggregate or which arise
in the ordinary course of business by operation of law, provided that no
such Lien is spread to cover any additional property after the Closing
Date and that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrowers and their
respective Subsidiaries permitted by subsection 9.2(c) incurred to finance
the acquisition of fixed or capital assets, provided that (i) such Liens
shall be created substantially simultaneously with the acquisition of such
fixed or capital assets, (ii) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness and (iii)
the principal amount of Indebtedness secured by any such Lien shall at no
time exceed an amount equal to 100% of the original purchase price of such
property;
(h) Liens on the property or assets of a corporation which becomes a
Subsidiary after the date hereof securing Indebtedness permitted by
subsection 9.2(g), provided that (i) such Liens existed at the time such
corporation became a Subsidiary and were not created in anticipation
thereof, (ii) any such Lien is not spread to cover any property or assets
of such corporation after the time such corporation becomes a Subsidiary,
and (iii) the amount of Indebtedness secured thereby is not increased;
(i) Liens on the assets of any Foreign Subsidiary to secure
Indebtedness of such Foreign Subsidiary permitted under subsection 9.2(d);
(j) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Borrowers and all their respective
Subsidiaries) $5,000,000 in aggregate amount at any time outstanding; and
(k) Liens created pursuant to the Security Documents.
9.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
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(a) Guarantee Obligations in existence on the date hereof and listed
on Schedule 9.4(a);
(b) Guarantee Obligations in respect of guarantees made in the
ordinary course of its business by such Borrower of obligations of any of
its Subsidiaries, which obligations are otherwise permitted under this
Agreement;
(c) Guarantee Obligations in respect of the Indebtedness permitted
under subsection 9.2(d);
(d) the Guarantees; and
(e) Guarantee Obligations (not otherwise permitted pursuant to this
subsection 9.4) issued after the Closing Date in an aggregate amount (as
to the Borrowers and their respective Subsidiaries) not to exceed,
together with Guarantee Obligations outstanding under paragraph (a) above,
$40,000,000 at any one time outstanding.
9.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except that:
(a) any Subsidiary of such Borrower may be merged or consolidated
with or into such Borrower (provided that such Borrower shall be the
continuing or surviving corporation) or with or into any one or more
wholly owned Subsidiaries of the Company (provided that the wholly owned
Subsidiary or Subsidiaries shall be the continuing or surviving
corporation);
(b) any wholly owned Subsidiary of such Borrower may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Company or any other wholly owned
Subsidiary of the Company;
(c) any Subsidiary of such Borrower may by way of merger or
consolidation with or into any other Person, convey, sell, transfer,
assign or otherwise dispose of any or all of its assets or its ownership
interest in such assets to, any Person to the extent that the sale or
other disposition of such assets or such ownership interest of such
Subsidiary would be permitted under subsection 9.6;
(d) any Subsidiary of such Borrower may by way of merger or
consolidation with or into any other Person consummate a Permitted
Investment, provided that the surviving corporation in such merger or
consolidation is a Subsidiary; and
(e) the Mergers shall be permitted.
9.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Company or any wholly owned Subsidiary of the Company, except:
(a) the sale or other disposition of obsolete or worn out property
in the ordinary course of business;
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(b) the sale or other disposition of any property or assets
(including, but not limited to, pursuant to Divestitures) in the ordinary
course of business, provided that the aggregate purchase price for all
such sales or other dispositions by the Borrowers and their Subsidiaries
shall not exceed $100,000,000 in the aggregate after the Closing Date;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the
compromise or collection thereof;
(e) the sale of the New York Real Property; and
(f) as permitted by subsection 9.5(b).
9.7 Limitation on Dividends. Declare or pay any dividend (other than
dividends payable solely in common stock of the Company) on, or make any payment
on account of, or set apart assets for a sinking or other analogous fund for,
the purchase, redemption, defeasance, retirement or other acquisition of, any
shares of any class of Capital Stock of the Company (or, until the Holdings
Merger, Y&R Inc. (New York), or, until the Partnership Merger, Y&R LP) or any
warrants or options to purchase any such Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Company or
any Subsidiary of the Company (such declarations, payments, setting apart,
purchases, redemptions, defeasances, retirements, acquisitions and distributions
being herein called "Restricted Payments"), except that the Company (i) may
purchase or exchange then-existing employee stock options for its Capital Stock
for consideration consisting solely of new employee stock options, (ii) so long
as no Default or Event of Default has occurred and is continuing or would occur
as a result thereof, may purchase for cash or Indebtedness permitted pursuant to
subsection 9.2(j) shares of its Capital Stock or options to acquire such Capital
Stock from directors, officers and employees of the Company and its Subsidiaries
in connection with employment and severance arrangements; provided that the
aggregate amount of Restricted Payments made in cash (including payments in
respect of the Principal or interest of the Indebtedness permitted pursuant to
subsection 9.2(j)) pursuant to this clause (ii) shall not exceed $12,500,000 in
the aggregate in any one fiscal year of the Company (the "Annual Amount") and
provided further that any portion of the Annual Amount not utilized for such
purpose in a given fiscal year may be carried over and shall be deemed to
increase the Annual Amount for the subsequent fiscal year, until so utilized,
(iii) may consummate the transactions described on Schedule 8.11, (iv) may make
Restricted Payments solely out of the cash proceeds from the issuance of Capital
Stock upon exercise of stock options, (v) may make Restricted Payments pursuant
to the Mergers, the Offers or the Special Compensation Arrangements (including,
in the latter case, payments made in March 1997 or thereafter pursuant to such
Arrangements (as in effect on the date hereof)), (vi) may make Restricted
Payments made solely in the form of Capital Stock of the Company (including (A)
the acceptance by the Company of Equity Interests contributed to it by the
Management Investors as contemplated under subsection 7.1(b), (B) the acceptance
by the Company of shares of Capital Stock as payment of the exercise price upon
exercise of an option for Capital Stock and (C) the issuance by the Company of
new employee stock options in substitution for outstanding employee stock
options) and (vii) may make Restricted Payments to former holders of Equity
Interests in connection with Equity Interests acquired or otherwise cancelled
prior to the Offers. The acceptance by the Company of shares of Capital Stock
from an employee in satisfaction of tax withholding obligations with respect to
such employee shall be deemed to be a Restricted Payment.
9.8 Limitation on Capital Expenditures. Make or commit to make (by
way of the
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acquisition of securities of a Person or otherwise) any expenditure in respect
of the purchase or other acquisition of fixed or capital assets (excluding any
such asset acquired in connection with normal replacement and maintenance
programs properly charged to current operations) except for expenditures in the
ordinary course of business ("Capital Expenditures") not exceeding, in the
aggregate for the Borrowers and their respective Subsidiaries during any of the
fiscal years of the Company set forth below, the amount set forth opposite such
fiscal year below:
Fiscal Year Amount
----------- ------
1997 $57,500,000
1998 $62,500,000
1999 $67,500,000
2000 $67,500,000
2001 $67,500,000
2002 $67,500,000
2003 $67,500,000
provided, that (a) up to 50% of any amount set forth above for any fiscal year
if not so expended in the fiscal year for which it is permitted above, may be
carried over for expenditure in the next following fiscal year, (b) Capital
Expenditures resulting from any Investment pursuant to subsection 9.9(c) shall
not be included for purposes of determining compliance with this subsection and
(c) Capital Expenditures resulting from the New York Real Estate Consolidation
(to the extent that such Capital Expenditures are funded with the proceeds of
the sale of the New York Real Property and to the extent such proceeds are not
otherwise used in accordance with clause (iii) of the proviso to subsection
5.4(e)) shall not be included for purposes of determining compliance with this
subsection.
9.9 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person ("Investments"),
except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Investments (including, but not limited to, Acquisitions) made
by the Company or any of its Subsidiaries, provided that the aggregate
consideration (including assumed Indebtedness) for all such Investments
after the date hereof shall not exceed $25,000,000 in any one fiscal year
of the Company or $100,000,000 in the aggregate, provided, further, that
additional Investments not exceeding $10,000,000 in any one fiscal year of
the Company or $35,000,000 in the aggregate shall be permitted to the
extent that the consideration therefor consists of Capital Stock of the
Company;
(d) Investments pursuant to subsection 5.4(e);
(e) loans and advances to employees of the Borrowers and their
respective Subsidiaries for (i) travel, entertainment and relocation
expenses and in connection with management incentive plans, in each case
in the ordinary course of business, and loans to officers of the Borrowers
and their respective Subsidiaries in the ordinary course of business, in
an aggregate amount for the Borrowers and their respective Subsidiaries
not to exceed $10,000,000 at any one time outstanding (excluding the
Management Investor Notes) and (ii) the Management Investor
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Notes;
(f) Investments by such Borrower in any other Borrower or in
Domestic Subsidiaries of any Borrower and Investments by Subsidiaries of
any Borrower in any Borrower and in Domestic Subsidiaries of any Borrower,
provided that no Investment shall be made in any Y&R Agent Subsidiary
pursuant to this paragraph other than any Investment arising out of any
Indebtedness permitted under subsection 9.2(b); and
(g) Investments by the Borrowers and their Domestic Subsidiaries in
Foreign Subsidiaries of the Borrowers, provided that (i) the aggregate
amount of all such Investments (including Investments in the nature of
sales and transfers of assets (including, pursuant to a transaction
permitted under subsection 9.5) for less than fair market value,
Indebtedness pursuant to subsection 9.2(b) and Guarantee Obligations
pursuant to subsection 9.4(b)) subsequent to the Closing Date in such
Foreign Subsidiaries shall not exceed $75,000,000 and (ii) no Investment
shall be made in any Y&R Agent Subsidiary pursuant to this paragraph other
than any Investment arising out of any Indebtedness permitted under
subsection 9.2(b).
9.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of such Borrower's or such Subsidiary's business and (c) upon
fair and reasonable terms no less favorable to such Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate, provided that it is agreed
that the transactions contemplated by the Recapitalization Documentation as in
effect on the date hereof shall not be prohibited by this subsection.
9.11 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by such Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by such
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of such Borrower or such Subsidiary, except for any such
arrangement with respect to computer and office equipment with respect to which
the aggregate sales price shall not exceed $20,000,000.
9.12 Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Company to end on a day other than December 31.
9.13 Limitation on Negative Pledge Clauses. Enter into with any
Person any agreement, other than (a) this Agreement, (b) any purchase money
mortgages or Financing Leases permitted by this Agreement (in which cases, any
prohibition or limitation shall only be effective against the assets financed
thereby) and (c) operating leases or similar agreements (in which case any
prohibition or limitation shall only be effective against the relevant
Borrower's or Subsidiary's rights under any such operating lease or similar
agreement, as the case may be), which prohibits or limits the ability of such
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired.
9.14 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
such Borrower and its Subsidiaries are engaged on the date of this Agreement or
which are directly related thereto.
9.15 Limitation on Business of Summit. Permit Summit to engage in
any business other
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than the captive insurance business in a manner consistent with past practice.
SECTION 10. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Any Borrower shall fail to pay any principal of any Loan or any
interest on any Loan (other than a Revolving Offshore Loan or Fronted
Offshore Loan) when due in accordance with the terms thereof or hereof; or
any Borrower shall fail to pay any interest on any Revolving Offshore Loan
or any Fronted Offshore Loan, or any fees or other amount payable
hereunder, within three days after any such interest or other amount
becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been incorrect in any material respect on or
as of the date made or deemed made; or
(c) Any Loan Party shall default in the observance or performance of
any agreement contained in subsection 8.11 or Section 9 of this Agreement,
Section 6 of the Parent Borrower Mortgage with respect to the New York
Real Estate (or the comparable provision of any other Mortgage), Section
5(a) or 5(b) of the Parent Borrower Pledge Agreement or the Subsidiaries
Pledge Agreement or Section 4.4 or 7.2 of the Parent Borrower Security
Agreement or Subsidiaries Security Agreement; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of 30 days after
the earlier of (i) the date upon which written notice thereof is given to
the Company by the Administrative Agent or the Majority Lenders or (ii)
the date upon which a Responsible Officer of any Borrower becomes aware of
such default; or
(e) Any Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest of any Indebtedness (other than the
Loans) or in the payment of any Guarantee Obligation, beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Guarantee
Obligation or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause, with the giving of notice if required, such Indebtedness to
become due prior to its stated maturity or such Guarantee Obligation to
become payable; provided, however, that no Default or Event of Default
shall exist under this paragraph unless the aggregate amount of
Indebtedness and/or Guarantee Obligations at any time in respect of which
any default or other event or condition referred to in this paragraph
shall have occurred shall be equal to at least $5,000,000; or
(f) (i) Any Borrower or any of its Domestic Operating Subsidiaries
or Material Foreign
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Subsidiaries shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets,
or any Borrower or any of its Domestic Operating Subsidiaries or Material
Foreign Subsidiaries shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against any Borrower or
any of its Domestic Operating Subsidiaries or Material Foreign
Subsidiaries any case, proceeding or other action of a nature referred to
in clause (i) above which (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against any Borrower or any of its Domestic Operating
Subsidiaries or Material Foreign Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) any Borrower or any
of its Domestic Operating Subsidiaries or Material Foreign Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) any Borrower or any of its Domestic Operating
Subsidiaries or Material Foreign Subsidiaries shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g) Except as set forth on Schedule 6.13, (i) any Person shall
engage in any "prohibited transaction" (as defined in Section 406 of ERISA
or Section 4975 of the Code) involving any Plan, (ii) any "accumulated
funding deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of the
PBGC or a Plan shall arise on the assets of any Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to,
or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment
of a trustee is, in the reasonable opinion of the Majority Lenders, likely
to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title
IV of ERISA, (v) any Borrower or any Commonly Controlled Entity shall, or
in the reasonable opinion of the Majority Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could reasonably be expected to
have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against any
Borrower or any of its Subsidiaries involving in the aggregate for the
Borrowers and their respective Subsidiaries, taken as a whole, a liability
(to the extent not paid or fully covered by insurance or third-party
indemnification from third parties which could reasonably be expected to
satisfy any indemnification claim) of $2,500,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any reason,
to be in full force and effect, or any Borrower or any other Loan Party
shall so assert or (ii) the Lien created by any of
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the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby; or
(j) Any Guarantee shall cease, for any reason, to be in full force
and effect or any Guarantor shall so assert; or
(k) a Change of Control shall occur;
then, and in any such event, (A) (1) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) of this Section with respect to
any Parent Borrower, automatically the Commitments shall immediately terminate
and the Loans hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (2) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to a
Subsidiary Borrower, (i) the eligibility of such Subsidiary Borrower to borrow
shall thereupon terminate and (ii) the Loans of such Subsidiary Borrower shall
become immediately due and payable, together with accrued interest thereon and
all fees and other obligations of such Subsidiary Borrower in respect thereof
and (B) if such event is any other Event of Default or an Event of Default
described in clause (A)(2) above, either or both of the following actions may be
taken: (i) with the consent of the Majority Lenders, the Administrative Agent
may, or upon the request of the Majority Lenders, the Administrative Agent
shall, by notice to the Company declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Majority Lenders, the Administrative Agent may, or upon the
request of the Majority Lenders, the Administrative Agent shall, by notice to
the Company, declare the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Administrative Agent an amount equal to
the aggregate then undrawn and unexpired amount (or, in the case of Letters of
Credit issued in an Offshore Currency, the Dollar Equivalent of the aggregate
then undrawn and unexpired amount) of such Letters of Credit. Each Borrower
hereby grants to the Administrative Agent, for the benefit of the Issuing Bank
and the L/C Participants, a security interest in such cash collateral to secure
all obligations of the Borrower under this Agreement and the other Loan
Documents. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrowers hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrowers hereunder and under the Loan Documents shall have been paid in
full, the balance, if any, in such cash collateral account shall be returned to
the relevant Borrowers. Each Borrower shall execute and deliver to the
Administrative Agent, for the account of the Issuing Bank and the L/C
Participants, such further documents and instruments as the Administrative Agent
may request to evidence the creation and perfection of the within security
interest in such cash collateral account.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
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SECTION 11. GUARANTEE
11.1 Guarantee. (a) To induce the Administrative Agent and the
Lenders to execute and deliver this Agreement and to make the extensions of
credit provided for herein to the Subsidiary Borrowers, each of the Parent
Borrowers hereby unconditionally and irrevocably guarantees to the
Administrative Agent and the Lenders and their respective successors, permitted
transferees and permitted assigns, the prompt and complete payment and
performance by the Subsidiary Borrowers when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations. Each of the Parent
Borrowers further agrees to pay any and all reasonable expenses (including,
without limitation, all reasonable fees and disbursements of counsel) which may
be paid or incurred by the Administrative Agent or any Lender in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, such Parent Borrower under this Section 11.
This Guarantee shall remain in full force and effect until the Obligations are
paid in full and the Commitments are terminated, notwithstanding that from time
to time prior thereto the Subsidiary Borrowers may be free from any Obligations.
For purposes of this Section 11, each Fronting Lender shall be deemed to be a
"Lender".
(b) No payment or payments made by any Subsidiary Borrower or any
other Person or received or collected by the Administrative Agent or any Lender
from any Subsidiary Borrower or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application, at any time or from
time to time, in reduction of or in payment of the Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of any Parent
Borrower under this Section 11 which shall, notwithstanding any such payment or
payments, remain in full force and effect until the Obligations are paid in full
and the Commitments are terminated. Each of the Parent Borrowers agrees that
whenever, at any time, or from time to time, it shall make any payment to the
Administrative Agent or any Lender on account of its liability under this
Section 11, it will notify the Administrative Agent and such Lender in writing
that such payment is made under this Section 11 for such purpose.
11.2 No Subrogation, Contribution, Reimbursement or Indemnity.
Notwithstanding anything to the contrary in this Section 11, no Parent Borrower
shall be entitled to be subrogated to any of the rights of the Administrative
Agent or any Lender against any Subsidiary Borrower or any other Guarantor or
any collateral security or guarantee or right of offset held by any Lender for
the payment of the Obligations, nor shall any Parent Borrower seek or be
entitled to seek any contribution or reimbursement from any Subsidiary Borrower
or any other Guarantor in respect of payments made by such Parent Borrower
hereunder, until all amounts owing to the Administrative Agent and the Lenders
by the Subsidiary Borrowers on account of the Obligations are paid in full, the
Commitments are terminated and no Letter of Credit remains outstanding. If any
amount shall be paid to any Parent Borrower on account of such subrogation
rights at any time when all of the Obligations shall not have been paid in full,
the Commitments shall not have been terminated or any Letter of Credit is
outstanding, such amount shall be held by such Parent Borrower in trust for the
Administrative Agent and the Lenders, segregated from other funds of such Parent
Borrower, and shall, forthwith upon receipt by such Parent Borrower, be turned
over to the Administrative Agent, for the benefit of the Lenders, in the exact
form received by such Parent Borrower (duly indorsed by such Parent Borrower to
the Administrative Agent, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Administrative Agent may
determine. The provisions of this subsection shall survive the termination of
the guarantee contained in this Section 11 and the payment in full of the
Obligations and the termination of the Commitments.
11.3 Amendments, etc. with respect to the Obligations; Waiver of
Rights. Each Parent
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Borrower shall remain obligated hereunder notwithstanding that, without any
reservation of rights against such Parent Borrower, and without notice to or
further assent by such Parent Borrower, any demand for payment of any of the
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender, and any of the Obligations continued,
and the Obligations, or the liability of any other party upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any Lender, and this Agreement, the
other Loan Documents, and any other documents executed and delivered in
connection herewith or therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Majority
Lenders, as the case may be) or such Lender or Affiliate may deem advisable from
time to time, and any collateral security, guarantee or right of offset at any
time held by the Administrative Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender or its Affiliates shall have any obligation
to protect, secure, perfect or insure any Lien at any time held by it as
security for the Obligations or for the guarantee contained in this Section 11
or any property subject thereto. When making any demand hereunder against any
Parent Borrower, the Administrative Agent or any Lender may, but shall be under
no obligation to, make a similar demand on the relevant Subsidiary Borrower or
any other guarantor, and any failure by the Administrative Agent or any Lender
to make any such demand or to collect any payments from such Subsidiary Borrower
or any such other guarantor or any release of such Subsidiary Borrower or such
other guarantor shall not relieve such Parent Borrower of its obligations or
liabilities under this Section 11, and shall not impair or affect the rights and
remedies, express or implied, or as a matter of law, of the Administrative Agent
or any Lender against such Parent Borrower. For the purposes hereof "demand"
shall include the commencement and continuance of any legal proceedings.
11.4 Guarantee Absolute and Unconditional. Each Parent Borrower
waives, to the fullest extent permitted by applicable law, any and all notice of
the creation, renewal, extension or accrual of any of the Obligations and notice
of or proof of reliance by the Administrative Agent or any Lender upon the
guarantee contained in this Section 11 or acceptance of the guarantee contained
in this Section 11; the Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in this Section 11;
and all dealings between the Subsidiary Borrowers, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, shall likewise be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 11. Each Parent Borrower waives, to the
fullest extent permitted by applicable law, diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon the Subsidiary
Borrowers with respect to the Obligations. The Guarantee contained in this
Section 11 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity, regularity or
enforceability of this Agreement, any Note, any other Loan Document, any of the
Obligations or any guarantee or right of offset with respect thereto at any time
or from time to time held by the Administrative Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Subsidiary Borrowers against the Administrative Agent or any Lender or (c) any
other circumstance whatsoever (with or without notice to or knowledge of the
Borrowers) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Subsidiary Borrowers for the Obligations, or of such
Parent Borrower under the guarantee contained in this Section 11, in bankruptcy
or in any other instance. When pursuing its rights and remedies hereunder
against any Parent Borrower, the Administrative Agent and any Lender may, but
shall be under no obligation to, pursue such rights and remedies as it may have
against the Subsidiary Borrowers or any other Person or against any guarantee
for the Obligations or any right of offset with respect thereto, and any failure
by the Administrative Agent or any Lender to pursue such other rights or
remedies or to collect any payments from the Subsidiary Borrowers or any such
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other Person or to realize upon any such guarantee or to exercise any such right
of offset, or any release of the Subsidiary Borrowers or any such other Person
or of any such guarantee or right of offset, shall not relieve such Parent
Borrower of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against such Parent Borrower. The guarantee
contained in this Section 11 shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon each Parent
Borrower and its successors, and shall inure to the benefit of the
Administrative Agent and the Lenders, and their respective successors, permitted
transferees and permitted assigns, until all the Obligations and the obligations
of each Parent Borrower under this Section 11 shall have been satisfied by
payment in full and the Commitments shall be terminated, notwithstanding that
from time to time during the term of this Agreement the Subsidiary Borrowers may
be free from any Obligations.
11.5 Reinstatement. The guarantee contained in this Section 11 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any Lender upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Subsidiary Borrower or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, such Subsidiary
Borrower or any substantial part of its property, or otherwise, all as though
such payments had not been made.
SECTION 12. THE ADMINISTRATIVE AGENT
12.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent. Without limiting the
foregoing, the use of the term "agent" with respect to the Administrative Agent
is used as a matter of market custom and is intended to create or reflect only
an administrative relationship between independent contracting parties.
The European Payment Agent may act on behalf of the Lenders with
respect to Revolving Offshore Loans and the documents associated therewith. It
is understood and agreed that the European Payment Agent (a) shall have all of
the benefits and immunities (i) provided to the Administrative Agent in this
Section 12 with respect to acts taken or omissions suffered by the European
Payment Agent in connection with Revolving Offshore Loans and the documents
associated therewith as fully as if the term "Administrative Agent", as used in
this Section 12, included the European Payment Agent and (ii) as additionally
provided in this Agreement with respect to the European Payment Agent and (b)
shall have all of the benefits of the provisions of subsection 12.7 as fully as
if the term "Administrative Agent", as used in subsection 12.7, included the
European Payment Agent.
The Issuing Banks and the Fronting Lenders shall act on behalf of
the Lenders with respect to Letters of Credit and Fronted Offshore Loans issued
or made under this Agreement and the documents associated therewith. It is
understood and agreed that the Issuing Banks and the Fronting Lenders (a) shall
have all of the benefits and immunities (i) provided to the Administrative Agent
in this
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Section 12 with respect to acts taken or omissions suffered by such Issuing
Banks and Fronting Lenders in connection with Letters of Credit and Fronted
Offshore Loans issued or made under this Agreement and the documents associated
therewith as fully as if the term "Administrative Agent", as used in this
Section 12, included such Issuing Banks and Fronting Lenders with respect to
such acts or omissions and (ii) as additionally provided in this Agreement and
(b) shall have all of the benefits of the provisions of subsection 12.7 as fully
as if the term "Administrative Agent", as used in subsection 12.7, included such
Issuing Banks and Fronting Lenders.
12.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
12.3 Exculpatory Provisions. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrowers or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Borrower to perform its obligations hereunder
or thereunder. No Agent-Related Person shall be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Borrower.
12.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrowers),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Majority Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
12.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or a
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice
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thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Lenders entitled to so act; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders (except to the extent that
this Agreement expressly requires that such actions be taken or not be taken
only with the consent or upon the authorization of the Required Lenders).
12.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent or any such other Person hereinafter taken, including any
review of the affairs of any Borrower, shall be deemed to constitute any
representation or warranty by the Administrative Agent or any such other Person
to any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon any Agent-Related Person or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrowers and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrowers. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrowers which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
12.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders agree to indemnify each Agent-Related Person
(to the extent not reimbursed by the Borrowers and without limiting the
obligation of the Borrowers to do so) (other than the Arranger), ratably
according to their respective Voting Percentages in effect on the date on which
indemnification is sought, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against such Agent-Related Person (other
than the Arranger) in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent-Related Person (other than
the Arranger) under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the relevant Agent-Related
Person's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Loans and all other amounts payable
hereunder.
12.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrowers as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Loan Documents and without notice to or consent of the Lenders. The
Lenders acknowledge
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that, pursuant to such activities, the Administrative Agent and its Affiliates
may receive information regarding the Borrowers or their Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Borrowers or their Affiliates) and acknowledge that neither the Administrative
Agent nor its Affiliates shall be under an obligation to provide such
information to them. With respect to the Loans made by it and with respect to
any Letter of Credit issued or participated in by it, the Administrative Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
12.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Majority Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent (provided
that it shall have been approved by the Parent Borrowers (which approval shall
not be unreasonably withheld)), shall succeed to the rights, powers and duties
of the Administrative Agent hereunder. If no successor agent is appointed prior
to the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrowers, a successor agent from among the Lenders. Effective upon such
appointment by the Majority Lenders or by the Administrative Agent, the term
"Administrative Agent" shall mean such successor agent, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 12 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents. If no
successor agent has accepted appointment as Administrative Agent by the date
which is 10 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall assume and perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Majority Lenders appoint a successor agent as provided for above. The European
Payment Agent may resign upon notice to the Administrative Agent or the
Administrative Agent may replace the European Payment Agent (but neither the
Lenders nor the Borrowers may replace the European Payment Agent).
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SECTION 13. MISCELLANEOUS
13.1 Amendments and Waivers. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Majority Lenders may, or, with the written consent of the Majority Lenders, the
Administrative Agent may, from time to time, (a) enter into with the relevant
Loan Parties written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Majority Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements or conditions of
this Agreement or the other Loan Documents or any Default or Event of Default
and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) reduce the amount or extend the
scheduled date of maturity of any Loan or Reimbursement Obligation or of any
installment thereof, or reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or increase the
amount or extend the expiration date of any Lender's Commitments, in each case
without the consent of each Lender affected thereby, or (ii) amend, modify or
waive any provision of this subsection or reduce the percentage specified in the
definition of Majority Lenders, or consent to the assignment or transfer by any
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents or release all or substantially all of the Collateral or the
Guarantors, in each case without the written consent of all the Lenders, or
(iii) amend, modify or waive any provision of Section 12 without the written
consent of the then Administrative Agent or (iv) amend, modify or waive any
provisions of subsection 3.3 through 3.10 without the consent of each Issuing
Bank adversely affected in any material respect thereby or (v) amend, modify or
waive any provision of Section 4 or subsection 5.3(b), 5.4(b), 5.9(b) or 5.11(b)
without the consent of each Fronting Lender adversely affected thereby or (vi)
amend, modify or waive any provision of subsection 3.11 or 3.12 without the
consent of the Swing Line Lender or (vii) amend, modify or waive any provision
of subsection 5.11(d) without the consent of each Lender adversely affected
thereby or (viii) amend, modify or waive any provision of this clause (viii) or
subsection 5.4(c) without the written consent of the Majority Revolving Credit
Lenders or reduce the percentage specified in the definition of Majority
Revolving Lenders without the written consent of all the Revolving Lenders or
(ix) amend, modify or waive any provision of this clause (ix) or subsection
5.4(g) without the written consent of the Majority Term Lenders or reduce the
percentage specified in the definition of Majority Term Lenders without the
written consent of all the Term Lenders. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon each Borrower, the Lenders, the Administrative Agent and all
future holders of the Loans. In the case of any waiver, each Borrower, the
Lenders and the Administrative Agent shall be restored to their former positions
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
13.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Parent Borrowers and the Administrative Agent, and as
set forth in Schedule 1.1(a) or the relevant Borrowing Subsidiary Agreement, as
the case may be, in the case of the other parties hereto, or to such other
address as may be hereafter notified by the respective parties hereto:
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Y&R Holdings: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Y&R Inc.
(New York): ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Y&R Inc.
(Delaware): ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Y&R LP: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative
Agent: For notices of borrowing, payments and other administrative
matters:
Bank of America National Trust & Savings Association
ABA No.: ▇▇▇▇-▇▇▇▇-▇
Bancontrol No.: 12339-15321
Ref: Young & Rubicam, Inc. - CH1216
Agency Administrative Services #5596
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
For all other notices (including with respect to amendments
and waivers):
Bank of America National Trust and Savings Association
Agency Management #10831
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.2, 3.2, 3.4, 3.12, 4.2, 5.4 or 5.6 shall
not be effective until received.
13.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and
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privileges provided by law.
13.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
13.5 Payment of Expenses and Taxes. Each Parent Borrower jointly and
severally agrees (each Subsidiary Borrower severally agrees, to the extent
applicable to actions or omissions by it or Loan Documents to which it is a
party) (a) to pay or reimburse the Administrative Agent and the Arranger for all
its out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and the Arranger (including the allocated non-duplicative
fees and expenses of in-house counsel), (b) to pay or reimburse each Lender and
the Administrative Agent and each of their Affiliates for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
(including the allocated non-duplicative fees and expenses of in-house counsel)
to each Lender and of counsel to the Administrative Agent, (c) to pay,
indemnify, and hold each Lender, each Fronting Lender, each Issuing Bank, the
Administrative Agent and each Agent-Related Person harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, (d) to pay or reimburse each Lender, each Fronting
Lender and each Issuing Bank for any costs and expenses incurred by such Lender
in funding any payment in an Offshore Currency pursuant to subsection 3.6(a) or
4.4(a) and to pay or reimburse each Lender, each Fronting Lender and each
Issuing Bank for any costs and expenses incurred in connection with any
conversion of any amount to Dollars pursuant to subsection 3.5(b) or 4.3(b) and
(e) to pay, indemnify, and hold each Lender, each Fronting Lender, each Issuing
Bank, the Administrative Agent and each Agent-Related Person harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents, the
Recapitalization, the Recapitalization Documentation or the actual or proposed
use of the proceeds of the Loans in connection with the Recapitalization and any
such other documents, including, without limitation, any of the foregoing
relating to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower, any of its
Subsidiaries or any of the Properties (all the foregoing in this clause (e),
collectively, the "indemnified liabilities"), provided that the Borrowers shall
have no obligation hereunder to the Administrative Agent, any Agent-Related
Person, any Lender or any Fronting Lender or Issuing Bank with respect to
indemnified liabilities arising from the gross negligence or willful misconduct
of the Administrative Agent, any such Agent-Related Person or any such Lender,
Fronting Lender or Issuing Bank. The agreements in this subsection shall survive
repayment of the Loans and all other amounts payable hereunder.
13.6 Successors and Assigns; Participations and Assignments. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrowers,
the Lenders, the Administrative Agent and their respective successors and
assigns, except that the Borrowers may not assign or transfer any of
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its rights or obligations under this Agreement without the prior written consent
of each Lender.
(b) Any Lender may, in the ordinary course of its lending business
and in accordance with applicable law, at any time sell to one or more banks or
other financial entities ("Participants") participating interests in any Loan
owing to such Lender, any Commitment of such Lender or any other interest of
such Lender hereunder and under the other Loan Documents. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the
Borrowers and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. No Lender shall
be entitled to create in favor of any Participant, in the participation
agreement pursuant to which such Participant's participating interest shall be
created or otherwise, any right to vote on, consent to or approve any matter
relating to this Agreement or any other Loan Document except for those specified
in clauses (i) and (ii) of the proviso to subsection 13.1. Each Borrower agrees
that if amounts outstanding under this Agreement are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in subsection 13.7(a) as fully as if it
were a Lender hereunder. The Borrowers also agree that each Participant shall be
entitled to the benefits of subsections 5.13, 5.14 and 5.15 with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if it were a Lender; provided that, in the case of subsection 5.14, such
Participant shall have complied with the requirements of said subsection and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such subsection than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may, in the ordinary course of its lending business
and in accordance with applicable law, at any time and from time to time assign
to any Lender or any affiliate thereof or, with the written consent of the
Company and the Administrative Agent and, in the case of assignment of Revolving
Commitments and/or Revolving Loans, the Issuing Bank, the Fronting Lenders and
the Swing Line Lender (which in each case shall not be unreasonably withheld),
to an additional bank or financial institution or entity (an "Assignee") all or
any part of its rights and obligations under this Agreement and the other Loan
Documents pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit T, executed by such Assignee, such assigning Lender (and, in the case of
an Assignee that is not then a Lender or an affiliate thereof, by the Company,
the Administrative Agent and any other Person whose consent is required under
this subsection) and delivered to the Administrative Agent for its acceptance
and recording in the Register, provided that, (i) in the case of any such
assignment to an additional bank or financial institution of less than all of
the rights and obligations of the assigning Lender, the sum of the aggregate
principal amount of the Loans, the aggregate amount of the L/C Obligations and
the aggregate amount of the unused Commitments being assigned and, if such
assignment is of less than all of the rights and obligations of the assigning
Lender, the sum of the aggregate principal amount of the Loans, the aggregate
amount of the L/C Obligations and the aggregate amount of the unused Commitments
remaining with the assigning Lender are each not less than $5,000,000 (unless
otherwise agreed by the Borrowers and the Administrative Agent) and (ii)
assignments shall not be required to be made on a ratable basis between the
Commitments and/or Loans held by any Lender. Upon such execution, delivery,
acceptance and recording, from and after the
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effective date determined pursuant to such Assignment and Acceptance, (x) the
Assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment as set forth therein, and (y) the assigning Lender thereunder
shall, to the extent provided in such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such assigning Lender shall cease to be a
party hereto). Notwithstanding any provision of this paragraph (c) and paragraph
(e) of this subsection, the consent of the Company shall not be required, and,
unless requested by the Assignee and/or the assigning Lender, new Notes shall
not be required to be executed and delivered by the Borrowers, for any
assignment which occurs at any time when any Event of Default shall have
occurred and be continuing under Section 10(a), 10(c) or 10(k) or any of the
events described in Section 10(f) shall have occurred and be continuing with
respect to any Parent Borrower.
(d) The Administrative Agent, on behalf of the Borrowers, shall
maintain at the address of the Administrative Agent referred to in subsection
13.2 a copy of each Assignment and Acceptance delivered to it and a register
(the "Register") for the recordation of the names and addresses of the Lenders
and the Commitments of, and principal amounts of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrowers or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by (to the extent required) the Borrowers
and the Administrative Agent) together with payment to the Administrative Agent
of a registration and processing fee of $3,500, the Administrative Agent shall
(i) promptly accept such Assignment and Acceptance and (ii) on the effective
date determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Borrowers.
(f) The Borrowers authorize each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee,
subject to such Transferee or prospective Transferee having agreed to be bound
by the provisions of subsection 13.15, any and all information in such Lender's
possession concerning the Borrowers and their Affiliates which has been
delivered to such Lender by or on behalf of the Borrowers pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrowers in connection with such Lender's credit evaluation of the Borrowers
and their Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
13.7 Adjustments; Set-off. (a) If any Lender (a "benefitted Lender")
shall at any time receive any payment of all or part of its Loans or the
Reimbursement Obligations owing to it, or interest
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thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 10(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans or the Reimbursement Obligations owing to it, or
interest thereon, such benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other Lender's
Loan or the Reimbursement Obligations owing to it, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the Borrowers,
any such notice being expressly waived by the Borrowers to the extent permitted
by applicable law, upon any amount becoming due and payable by the Borrowers
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrowers. Each Lender agrees promptly to notify
the Borrowers and the Administrative Agent after any such set-off and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
13.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Parent Borrowers
and the Administrative Agent.
13.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
13.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
13.12 Submission To Jurisdiction; Waivers. Each Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this
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Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York,
the courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Borrower at its address set forth or referred to in subsection 13.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential
damages.
13.13 Acknowledgements. Each Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to such Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and
such Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrowers and the Lenders.
13.14 WAIVERS OF JURY TRIAL. EACH BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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13.15 Confidentiality. Each Lender agrees to keep confidential all
non-public information provided to it by the Borrowers pursuant to this
Agreement that is designated by the Borrowers in writing as confidential;
provided that nothing herein shall prevent any Lender from disclosing any such
information (i) to the Administrative Agent or any other Lender, (ii) to any
Transferee or prospective Transferee which receives such information having been
made aware of the confidential nature thereof, (iii) to its employees,
directors, agents, attorneys, accountants and other professional advisors, (iv)
upon the request or demand of any Governmental Authority having jurisdiction
over such Lender, (v) to the National Association of Insurance Commissioners or
any similar organization or any nationally recognized rating agency that
requires access to information about such Lender's investment portfolio in
connection with ratings issued with respect to such Lender, (vi) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (vii) which has been publicly
disclosed other than in breach of this Agreement, or (viii) in connection with
the exercise of any remedy hereunder.
13.16 Conversion of Currencies. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum owing hereunder in one
currency into another currency, each party hereto (including any Subsidiary
Borrower) agrees, to the fullest extent that it may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures in the relevant jurisdiction the first currency could be purchased
with such other currency on the Banking Day immediately preceding the day on
which final judgment is given.
(b) The obligations of each Borrower in respect of any sum due to
any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than the currency in which such sum is stated to be
due hereunder (the "Agreement Currency"), be discharged only to the extent that,
on the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrowers
contained in this subsection 13.16 shall survive the termination of this
Agreement and the payment of all other amounts owing hereunder.
13.17 Joint and Several Obligations. All obligations, liabilities,
covenants and representations and warranties of any Parent Borrower under this
Agreement shall be joint and several obligations, liabilities, covenants and
representations and warranties of all the Parent Borrowers.
13.18 Release of Lien on Receivables. If the Applicable Margin is at
any time determined by reference to Debt ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
(whichever occurs first), the Lien on the Receivables (as defined in the
Security Agreements) of the Parent Borrowers and the Domestic Subsidiaries
granted pursuant to the Security Agreements shall be released, provided that, if
the Applicable Margin is at any time thereafter determined by reference to Debt
▇▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ or Debt Level 6 Status, the Parent Borrowers
and each Guarantor shall, at the request of the Administrative Agent or the
Majority Lenders, ▇▇▇▇▇ ▇ ▇▇▇▇ on their Receivables (as defined in the Security
Agreement) to the Administrative Agent on the terms and conditions set forth in
the Credit Agreement (prior to giving effect to such release). Upon the release
of the Lien on the Receivables (as defined in the Security Agreements) of the
Parent Borrowers and the Domestic Subsidiaries pursuant to the immediately
preceding sentence, the Administrative Agent shall, and is hereby authorized to,
execute and deliver to the Borrower, or to such person or persons as the Parent
Borrowers shall reasonably designate, all Uniform Commercial Code termination
statements and similar documents prepared by the
99
93
Parent Borrowers at their expense which the Parent Borrowers shall reasonably
request to evidence such release.
13.19 Release of Lien on New York Real Property. Upon any sale of
the New York Real Property pursuant to subsection 9.6(e), the Administrative
Agent shall, and is hereby authorized to, execute and deliver to the relevant
Borrower, or to such person or persons as such Borrower shall reasonably
designate, all releases, satisfactions of mortgage, non-recourse assignments of
mortgage and similar documents prepared by such Borrower at its expense which
such Borrower shall reasonably request to evidence such release.
13.20 Recordation of Mortgages. The Administrative Agent may record
and file at any time in its discretion or at the direction of the Majority
Lenders any Mortgage delivered to it pursuant to this Agreement in order to
perfect or record the Lien granted pursuant to such Mortgage. The Parent
Borrowers shall reimburse the Administrative Agent for any recording fees or
other costs and expenses incurred by the Administrative Agent in recording such
Mortgages and hereby request that Revolving Loans (which shall be made as Base
Rate Loans) in an aggregate principal amount sufficient to pay from time to time
any such recording fees or other costs and expenses be made and the
Administrative Agent shall retain the proceeds of such Revolving Loans in
satisfaction of the Parent Borrowers' obligation to reimburse such fees, costs
and other expenses.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
YOUNG & RUBICAM HOLDINGS INC.
By:
-------------------------------------------
Title:
YOUNG & RUBICAM INC., a New York corporation
By:
-------------------------------------------
Title:
YOUNG & RUBICAM INC., a Delaware corporation
By:
-------------------------------------------
Title:
100
94
YOUNG & RUBICAM L.P.
By: YOUNG & RUBICAM INC., a New York
corporation, its General Partner
By:
-------------------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as
Administrative Agent
By:
-------------------------------------------
Title:
BANK OF AMERICA INTERNATIONAL LIMITED,
as European Payment Agent
By:
-------------------------------------------
Title:
101
95
Annex A
PRICING GRID
======================================================================================
Applicable Margin for
Eurodollar and
Applicable Rate for Revolving Offshore Applicable Margin for
Commitment Fees Loans Base Rate Loans
(basis points) (basis points) (basis points)
======================================================================================
Debt Level 1 Status 20.00 62.50 0.0
--------------------------------------------------------------------------------------
Debt Level 2 Status 25.00 87.50 0.0
--------------------------------------------------------------------------------------
Debt Level 3 Status 25.00 112.50 0.0
--------------------------------------------------------------------------------------
Debt Level 4 Status 37.50 137.50 12.50
--------------------------------------------------------------------------------------
Debt Level 5 Status 37.50 162.50 37.50
--------------------------------------------------------------------------------------
Debt Level 6 Status 50.00 200.00 75.00
======================================================================================
102
SCHEDULE 1.1(a)
LENDERS, ISSUING BANKS, COMMITMENTS
AND ADDRESSES:
$700 MILLION SENIOR SECURED CREDIT FACILITIES
BANK OF AMERICA (ILLINOIS)
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amounts:
-------------------
Revolving Commitment $29,280,000.00
Term Commitment $66,720,000.00
THE BANK OF NEW YORK
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. Judge
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $23,040,000.00
Term Commitment $24,960,000.00
103
SCHEDULE 1.1(a) Page 2
CITIBANK, N.A.
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $23,040,000.00
Term Commitment $24,960,000.00
CREDIT LYONNAIS
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $23,040,000.00
Term Commitment $24,960,000.00
WACHOVIA BANK OF GEORGIA, N.A.
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. (GA 370)
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $23,040,000.00
Term Commitment $24,960,000.00
104
SCHEDULE 1.1(a) Page 3
BANKERS TRUST COMPANY
Address for Notices:
▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇/7351
Commitment Amount:
-------------------
Revolving Commitment $16,800,000.00
Term Commitment $18,200,000.00
THE BANK OF NOVA SCOTiA
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $16,800,000.00
Term Commitment $18,200,000.00
BANK OF TOKYO-MITSUBISHI TRUST CO.
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $16,800,000.00
Term Commitment $18,200,000.00
105
SCHEDULE 1.1(a) Page 4
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy:(▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $16,800,000.00
Term Commitment $18,200,000.00
FLEET BANK, N.A.
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $16,800,000.00
Term Commitment $18,200,000.00
KEYBANK NATIONAL ASSOCIATION
Address for Notices:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $16,800,000.00
Term Commitment $18,200,000.00
106
SCHEDULE 1.1(a) Page 5
CORESTATES BANK, N.A.
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇-▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Ed Kirnell
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $12,000,000.00
Term Commitment $13,000,000.00
THE FIRST NATIONAL BANK OF CHICAGO
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇,▇▇ 10019
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $12,000,000.00
Term Commitment $13,000,000.00
BANQUE NATIONALE DE PARIS
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $ 9,600,000.00
Term Commitment $10,400,000.00
107
SCHEDULE 1.1(a) Page 6
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
Addresses for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Business Banking, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ 2067
Attn: ▇▇▇▇▇ ▇▇▇▇
Telecopy: 011-61-2-9419-6321
Commitment Amount:
-------------------
Revolving Commitment $7,200,000.00
Term Commitment $7,800,000.00
CAISSE NATIONALE DE CREDIT AGRICOLE
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $7,200,000.00
Term Commitment $7,800,000.00
108
SCHEDULE 1.1(a) Page 7
THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $7,200,000.00
Term Commitment $7,800,000.00
THE ROYAL BANK OF SCOTLAND PLC
Address for Notices:
Wall Street Plaza
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $7,200,000.00
Term Commitment $7,800,000.00
THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy:(▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $7,200,000.00
Term Commitment $7,800,000.00
109
SCHEDULE 1.1(a) Page 8
ARAB BANKING CORPORATION (B.S.C.)
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy:(▇▇▇) ▇▇▇-▇▇▇▇/0935
Commitment Amount:
-------------------
Revolving Commitment $4,800,000.00
Term Commitment $5,200,000.00
BANCA MONTE DEI PASCHI DI SIENA S.P.A.
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy:(▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $3,360,000.00
Term Commitment $3,640,000.00
METROPOLITAN LIFE INSURANCE COMPANY
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 633
Convent Station, NJ 07961-0633
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:
-------------------
Revolving Commitment $ 0.00
Term Commitment $25,000,000.00
110
SCHEDULE 1.1(a) Page 9
ALLSTATE INSURANCE COMPANY
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amounts:
-------------------
Revolving Commitment $0.00
Term Commitment $15,000,000.00
[/R]
111
SCHEDULE 6.1
1. Young & Rubicam L.P. entered into an Asset Purchase Agreement with
Waring & ▇▇▇▇▇▇, Inc., dated May 9,1996 to purchase substantially all
of seller's assets for $3,000,000 in cash. This transaction closed on
June 3, 1996.
2. Young & Rubicam L.P. entered into an Asset Purchase Agreement with The
Media Edge, Inc. and ▇.▇. ▇▇▇▇ ABH International, Inc., dated October
11, 1996, to purchase substantially all of the assets of The Media
Edge. Inc., for $3,004,500 in cash. The transaction closed on October
11, 1996.
3. The Company is in the process of acquiring the remaining 28% of
Advico/Young & Rubicam AG, to be effective as of January 1, 1996, for
approximately $13,300,000.
Young & Rubicam L.P. and RJC Inc. are in the process of selling their
combined 50% interest in the Los Angeles division of Lord Dentsu & Partners LLC
to Dentsu USA, Inc. (the holder of the remaining 50% interest) for $2,600,000.
It is expected that such sale will be completed and the proceeds will be
received by the end of 1996. Young & Rubicam L.P. has agreed to make a capital
contribution in the amount of $3,500,000 to Lord, Dentsu & Partners LLC ("LDP")
in order to match Dentsu's prior contribution in the same amount, upon the
closing of the sale of the Los Angeles office of LDP as its share of the capital
account deficit of LDP.
The Company is in the process of selling its operations in Australia and
New Zealand, except for ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇, to ▇▇▇▇▇▇▇▇▇
and Partners Group Pty Ltd. ("▇▇▇▇▇▇▇▇▇") in exchange for an increased ownership
percentage in ▇▇▇▇▇▇▇▇▇. The operations are being valued by an independent
valuation firm, so the final ownership percentages have not been determined
yet.
G&R Publicita - ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, S.r.l. ("G&R") is in the process of
selling 12% of its subsidiary, Creative Healthcare Advertising S.r.l., to two
directors of the subsidiary, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Antonio Baschi, for a total of
Lir. 48,061,862. It is expected that such sale will be completed and the
proceeds will be received by the end of 1996.
Dentsu ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Inc. ("DBM") filed a Certificate of Dissolution
effective as of February 28, 1996. ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc. owned
49% of DBM and Dentsu Inc. and Dentsu PR Center Ltd. owned 41% and 10%,
respectively. The dissolution has not been finally approved by the State of New
York.
112
SCHEDULE 6.2
On October 18, 1996, the Company paid a dividend of $.27 per share to
holders of record as of June 30, 1996 of Young & Rubicam Inc. Common Stock,
totaling $683,506.
On October 18, 1996, the Company paid a dividend equivalent of $.27 per
limited partner ship unit to holders of record as of June 30, 1996 of Young &
Rubicam L.P. Limited Partnership Units, totaling $530,088.
On October 18, 1996, the Company paid a dividend of $10.00 per share to
holders of record as of June 30, 1996 of Young & Rubicam Inc. Preferred Stock,
totaling $12,790.
From January 1, 1996 through September 30, 1996, 450,765 shares of Young &
Rubicam Inc. Common Stock have been redeemed in the normal course from 22
terminating employees (including interests held in the Young & Rubicam Inc.
Employees' Savings Plan) for a total of $10,768,461.
From January 1, 1996 through September 30, 1996, 167,161 limited
partnership units of Young & Rubicam L.P. have been repurchased in the normal
course from 18 terminating employees for a total of $1,967,464.
113
SCHEDULE 6.8
Mexico All that land consisting of approximately 759m2 together
with a building thereon having an area of approximately
530.29m2 together with a patio consisting of approximately
246.98m2 situated at the location commonly known as ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇. ▇, San Angel, Delegation Villa ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Mexico D.F., Mexico.
Cedar Rapids All that certain parcel of land consisting of approximately
6.53 acres, together with a two level building thereon
consisting of approximate]y 28,317 square feet and commonly
known as ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ N.E., situated in Cedar
Rapids, Linn County, Iowa, which land is more specifically
described in the deed dated September 11, 1989 from Signal
Ridge Development Company to Young & Rubicam L.P.
*New York All that certain parcel of land together with the buildings
and improvements hereon erected in the Borough of Manhattan,
City, County and State of New York, which building is
commonly referred to as ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, which property
is more particularly described in the deed dated May 23,
1983 from Metropolitan Life Insurance Company to Young &
Rubicam Inc.
Hungary A suite of offices consisting of approximately 184m2
situated at Nephadscreq Utca 3 in the City of Budapest in
Hungary, which suite is subject to an option to purchase by
the existing third party tenant at price of Ftl4 million
(approximately $100,720 at 1996 planning rates).
Puerto Rico All that certain land and the building thereon consisting of
approximately 15,000 sq. ft. situated at the location
commonly known as 9 ▇▇▇▇▇ Court in the City of Guaynabo in
Puerto Rico.
Santo ▇▇▇▇▇▇▇ All that certain land consisting of approximately 2,705m2
and building thereon of approximately 1,364m2 situated in
the Avenida de los Proceres at the corner of Camino del
Oeste in the City of Santo ▇▇▇▇▇▇▇ in the Dominican
Republic.
------------
*Mortgage to be granted
114
SCHEDULE 6.11
The IRS previously assessed Young & Rubicam L.P. with approximately
$6,000,000 of taxes and interest relating to 1991. There is no reserve for this
item because the Company believes there is no basis for this assessment. The IRS
has put a lien on the Company's headquarters building. A Statement of Adjustment
to the Company's account was received on October 9, 1996 from the IRS indicating
that the tax assessment and interest penalties relating to 1991 have now been
reversed. The Company has not yet received the lien release. The Company is
attempting to finally resolve this matter with the IRS problem resolution office
in Holtsville, New York.
115
SCHEDULE 6.13
According to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Incorporated, the actuary for the Company's
pension plans, the present value of all accrued benefits of the Young & Rubicam
Inc. Career Cash Balance Plan (formerly known as the Career Compensation Plan)
exceeds the value of assets as of the last valuation date of January 1, 1996.
Such excess is $6.3 million if one uses the actuarial value of assets, or $3.3
million if one uses the market value of assets. These liabilities were
determined using the 9% funding assumption.
116
SCHEDULE 6.15
I. Set forth below is an organization chart and listing of the legal names of
each domestic and foreign operating subsidiary (by country) of Young & Rubicam
Inc. and Young & Rubicam L.P., and other entities in which Young & Rubicam Inc.
or a subsidiary has a minority interest (other than subsidiaries being formed in
connection with the Recapitalization). The legal ownership percentage held by
Young & Rubicam Inc. or Young & Rubicam L.P. and the type of entity (whether
holding or operating) is set forth below. Unless otherwise indicated, each
entity is a corporation (or equivalent) organized in the country under which its
name appears.
YOUNG & RUBICAM INC. LEGAL OWNERSHIP SCHEDULE
Legal
COMPANY NAME Own TYPE OF
% ENTITY
--------------------------------------------------------------------------------
ARGENTINA
Young & Rubicam Inc. (New York corporation)
Y&R Inversiones Publicitarias SA 100 Holding
Young & Rubicam SA. 80* Operating
ADD S.A. 100* Operating
Wunderman Cato ▇▇▇▇▇▇▇, ▇.▇. 44 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ S.A. 51 Operating
Action Line, S.A. 32 Operating
*Effective profit ownership interest is 44%
AUSTRALIA
Young & Rubicam Inc. (New York corporation)
Y&R Australia Pty Ltd 100 Operating
Wunderman Cato ▇▇▇▇▇▇▇, Pty Ltd. 100 Operating
Y&R Sydney Pty Ld. 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Pty Ltd. 100 Operating
AUSTRIA
Young & Rubicam Inc. (New York corporation)
Y&R Vienna Werbegesellschaft m.b.H. 100 Operating
BELGIUM
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group
B.V. (Netherlands corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ S.A. 100 Operating
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Associates S.A. 85 Operating
Young & Rubicam Belgium S.A. 100 Operating
Wunderman Cato ▇▇▇▇▇▇▇, Belgium S.A. 75 Operating
117
BRAZIL
Young & Rubicam Inc. (New York corporation)
Young & Rubicam do Brasil S/C Ltda. 100 Operating
Young & Rubicam Comunicacoes Ltda. 100 Operating
ADD Communicacoes Ltda. 100 Operating
Wunderman do Brasil Ltda. 100 Operating
VS Escala Comunicacoes Ltda. 25 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ S/C Ltda. 100 Operating
CANADA
Young & Rubicam Inc. (New York corporation)
Young & Rubicam Group of Companies Ltd. 100 Operating
S&H Gall, Inc. 51 Operating
The Finished Line Art & Design Ltd. 100 Operating
The Finished Type Inc. 50 Operating
Saint-▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Y&R Inc. (Montreal) 49 Operating
Firstcom Marketing Inc. 100 Operating
National Public Relations 22 Operating
CHILE
Young & Rubicam Inc. (New York corporation)
Young & Rubicam Inc. y Compania 100 Operating
Prolam/Young & Rubicam S.A. 30 Operating
COLOMBIA
Young & Rubicam Inc. (New York corporation)
Cygnet Holdings Inc. (Delaware corporation) 100 Holding
Young Rubicam S.A. 100 Operating
ADD S.A 100 Operating
THE CZECH REPUBLIC
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
Young & Rubicam Praha, A.S. 100 Operating
WCJ Praha 100 Operating
Mediapolis Czech Republic 50 Operating
DENMARK
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
Young & Rubicam Denmark Group A/S 100 Operating
DOMINICAN REPUBLIC
Young & Rubicam Inc. (New York corporation)
Investigaciones Merdadeo C Por A 65 Operating
Y&R ▇▇▇▇▇▇▇ C por A 65 Operating
2
118
FINLAND
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
Young & Rubicam Finland Oy 80 Operating
FRANCE
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
Young & Rubicam France S.A. 100 Operating
Covema Holding 35 Operating
BCMW 85* Operating
PERF 85* Operating
Srateme 85* Operating
Creep Sarl 100 Operating
Landor Associates S.A. 100 Operating
Lumiere Sarl 40 Operating
Mediapolis Worldwide 49 Operating
Mediapolis 100 Operating
Wunderman Cato ▇▇▇▇▇▇▇ France S.A. 100 Operating
Larminat Merlet Communications 40 Holding
▇▇ ▇▇▇▇▇ & Rubicam 46 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Eurocorporate S.A. 100 Operating
*Effective profit ownership interest is 30%
GERMANY
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ GmbH 100 Operating
Young & Rubicam GmbH 100 Operating
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ GmbH 100 Operating
Wunderman Cato ▇▇▇▇▇▇▇ GmbH 100 Operating
FutureCom GmbH 100 Operating
▇▇▇▇▇ und Partner GmbH 100 Operating
GREECE
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
Young & Rubicam Italia S.p.A.
(Italian corporation) 100 Operating
Geo/Young & Rubicam S.A. 62 Operating
Greek Media Group 19* Operating
Wunderman Worldwide
Advertising Marketing S.A. 98** Operating
*Effective profit ownership interest is 12%
3
119
**Effective profit ownership interest is 61%
GUATEMALA
Young & Rubicam Inc. (New York corporation)
Cygnet Holdings Inc. (Delaware corporation) 100 Holding
Eco Young & Rubicam, S.A. 40 Operating
HONG KONG
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Asia Ltd. 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Hong Kong Ltd. 100 Operating
Landor Associates (California corporation) 100 Operating
Landor Associates Designers & Consultants Ltd. 100 Operating
Landor Associates Asia-Pacific Ltd. 100 Holding
HUNGARY
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
Young & Rubicam Hungary Advertising 100 Operating
WCJ Budapest 100 Operating
Mac-Mester 100 Operating
Mediapolls 50 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Budapest Kft 100 Operating
INDIA
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
▇▇▇▇▇ ▇▇▇▇▇▇▇ 49 Operating
INDONESIA
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Asia Ltd.
(Hong Kong corporation) 100 Operating
B-M Indonesia 100 Operating
Young & Rubicam Far East Holdings, Inc.
(Delaware corporation) 100 Holding
Dentsu Young & Rubicam Pte Ltd. 50 Operating
PT DY&R Indonesia 50* Operating
*The shares are held by the Indonesian shareholder, but are
beneficially owned by DY&R Pte Ltd. Effective profit ownership
interest is 25%
ITALY
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
Young & Rubicam Italia S.p.A. 100 Operating
G&R Publicita-▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ S.r.l. 60 Operating
4
120
Creative Healthcare Advertising S.r.l. 97* Operating
Farma Force S.r.l. 25** Operating
Intramed Communications S.r.l. 85*** Operating
Impact Italia S.r.l. 100 Operating
Landor Associates Continental Europe S.r.l. 100 Operating
Mediapolis/M&CS Italia S.r.l. 100 Operating
Wunderman Cato ▇▇▇▇▇▇▇ Italia S.p.A. 100 Operating
Young & Rubicam Roma S.r.l. 100 Operating
Yellow & Red S.r.l. 15 Operating
▇▇▇▇ & ▇▇▇▇▇ Italia 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Italia S.r.l. 100 Operating
*Effective profit ownership interest is 59%
**Effective profit ownership interest is 15%
***Effective profit ownership interest is 51%
JAPAN
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
Kabushiki Kaisha Dentsu ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ 51 Operating
Landor Associates International
(California corporation), Japan Branch 100 Operating
Dentsu Wunderman Direct 50 Operating
▇▇▇▇▇
▇▇▇▇▇ & Rubicam Inc. (New York corporation)
Ayton Young & Rubicam 50 Operating
KOREA
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
Merit Communications Inc. 25 Operating
MALAYSIA
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Asia Ltd.
(Hong Kong corporation) 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ (Malaysia) Sdn Bhd 90 Operating
Dentsu, Young & Rubicam Sdn Bhd 35 Operating
Paragon Communications SDN BHD 49* Operating
*Effective profit ownership is 17%
MEXICO
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Mexico S.A. de C.V. 100 Operating
Wunderman Cato ▇▇▇▇▇▇▇ Mexico S.A. de C.V. 100 Operating
5
121
Landor Associates (California corporation) 100 Operating
▇▇▇▇▇▇ ▇▇▇▇▇▇ Y Asociados S.A. de C.V. 100 Operating
Immobiliaria ▇▇▇▇▇▇ ▇.▇. de C.V. 100 Operating
Young & Rubicam S.A. de C.V. 100 Operating
Empresas del Sur S.A. de C.V. 100 Holding
Iconic, S.A. de C.V. 100 Operating
Iconic Administracion Corporativa, S.C. 100 Operating
THE NETHERLANDS
Young & Rubicam Inc. (New York corporation)
Young & Rubicam Inc. International Group B.V. 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Budapest Kft (Hungarian corporation)*
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ S.A. (Belgian corporation)*
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ GmbH (German Gmbh)*
Young & Rubicam Belgium S.A. (Belgian corporation)*
Young & Rubicam Denmark Group A/S (Danish corporation)*
Young & Rubicam SA (Spanish corporation)*
Young & Rubicam Finland Oy (Finnish corporation)**
Young & Rubicam France S.A. (French corporation)*
Young & Rubicam Hungary Advertising (Hungarian corporation)*
Young & Rubicam Italia S.p.A. (Italian corporation)*
Young & Rubicam MediaPro (Romanian corporation)***
Young & Rubicam Poland (Polish corporation)*
Young & Rubicam Praha, A.S. (Czech corporation)*
Young & Rubicam Reklamevi Reklamcilik As. (Turkish corporation)****
Young & Rubicam Group Netherlands BV 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ B.V. 100 Operating
Bercum, ▇▇▇▇▇▇▇, Cardozo & Werkendam 100 Operating
Consult Communication Strategies 100 Operating
Media Exposure 70***** Operating
Production Control B.V. 100 Operating
PMSvW/Y&R Reclameburo bv 100 Operating
Adbeidsmarkt Comm. Adviesbureau B.V. 49 Operating
P,M,SvW Communication House B.V. 100 Operating
Trefpunt Sports & Leisure Marketing B.V. 44 Operating
Wunderman Cato International b.v. ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ v.o.f. 80 Partnership
Online Marketing B.V. 100****** Operating
Ad Productions B.V. 100 Holding
Verhoeff & Partners v.o.f. 80 Partnership
*Young & Rubicam International Group B.V. owns 100% of each of these Operating
companies.
**Young & Rubicam International Group B.V. owns 80% of this Operating company.
***Young & Rubicam International Group B.V. owns 60% of this Operating company.
****Young & Rubicam International Group B.V. owns 77% of this Operating company.
*****In process of acquiring an additional 19%.
******Effective profit ownership interest is 80%.
6
122
NEW ZEALAND
Young & Rubicam Inc. (New York corporation)
Young & Rubicam New Zealand (Holdings) Ltd. 100 Holding
Young & Rubicam (NZ) Limited 50 Operating
Wunderman Cato ▇▇▇▇▇▇▇ (NZ) Ltd. 100 Operating
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ Ltd. 100 Operating
NORWAY
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ A/S 100 Operating
POLAND
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
Young & Rubicam Poland 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Poland Sp. z.o.o. 100 Operating
PORTUGAL
Young & Rubicam Inc. (New York corporation)
Young & Rubicam Holdings U.K. Ltd.
(United Kingdom corporation) 100 Holding
Young & Rubicam SGdPS S.A. 100 Holding
Wunderman Cato ▇▇▇▇▇▇▇ Portugal 55 Operating
Young & Rubicam Publicide Lda. 70 Operating
Mediapolis Portugal 50 Operating
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
Young & Rubicam SA (Spanish corporation) 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ S.A.*
(Spanish corporation) 100 Operating
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ SA has an operating division located in Portugal.
ROMANIA
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
Y&R MediaPro 60 Operating
THE RUSSIAN FEDERATION
Young & Rubicam Inc. (New York corporation)
Cygnet Holdings Inc. (Delaware corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇/NIS, Inc.
(Delaware corporation) 100 Rep. Office
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇/NIS, Inc. (Russia)
(Delaware corporation) (Ukraine) 100 Rep. Office
B-M Communications Inc.
(Delaware corporation) 100 Rep. Office
(Russia)
7
123
B-M Communications Inc.
(Delaware corporation) (Ukraine) 100 Rep. Office
B-M Communications Inc.
(Delaware corporation) (Kazahkstan) 100 Rep. Office
Young & Rubicam Holdings U.K. Ltd.
(UK corporation) 100 Holding
Young & Rubicam Group Ltd.
(UK corporation) 100 Rep. Office
(Russia)
SINGAPORE
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Asia Ltd.
(Hong Kong corporation) 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ (Sea) Pte Ltd 100 Operating
SOUTH AFRICA
Young & Rubicam Inc. (New York corporation)
Young & Rubicam Holdings U.K. Ltd.
(UK corporation) 100 Holding
Young & Rubicam Holdings S.A. Pty Ltd 100 Holding
Wunderman Cato ▇▇▇▇▇▇▇ (PTY) LTD 100 Operating
SPAIN
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
Young & Rubicam SA 100 Operating
Equimedia S.A. 25 Operating
Vinizius/Young & Rubicam S.A. 77 Operating
Wunderman Cato ▇▇▇▇▇▇▇ ▇.▇. 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ S.A. 100 Operating
SWEDEN
Young & Rubicam Inc. (New York corporation)
Young & Rubicam Sweden AB ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇/▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇ 100 Operating
Nordstrom & ▇▇▇▇▇ ▇▇ 100 Operating
Wunderman Cato ▇▇▇▇▇▇▇ ▇▇ 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ AB 100 Operating
SWITZERLAND
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
CMG AG 100 Holding
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ ▇▇ Zurich 100 Operating
▇▇▇▇▇▇▇ & Partner Design AG 35 Operating
Wunderman Cato ▇▇▇▇▇▇▇ ▇▇ 100 Operating
All Access AG 100 Operating
All Right Social Marketing AG 100 Operating
Y&R Business Communications S.A. 100 Operating
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ AG 4 Operating
Advico/Young & Rubicam AG 72* Operating
8
124
FutureCom Interactive Media 100 Operating
Adplus AG 33 Operating
*In process of acquiring remaining interest
TAIWAN
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Taiwan 100 Operating
THAILAND
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc.
(Delaware corporation) 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Thailand Ltd. 98* Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Thailand International 100 Holding
*Effective profit ownership interest is 100%
TURKEY
Young & Rubicam Inc. (New York corporation)
Young & Rubicam International Group B.V.
(Netherlands corporation) 100 Holding
Young & Rubicam Reklamevi Reklamcilik As. 77 Operating
UNITED KINGDOM
Young & Rubicam Inc. (New York corporation)
Young & Rubicam Holdings U.K. Ltd. 100 Holding
Phoenix Travel (Mornington) Ltd. 51 Operating
Prima Europe Ltd. 100 Operating
Young & Rubicam Europe Ltd. 100 Operating
Young & Rubicam Group Ltd. 100 Operating
▇▇▇▇▇ ▇▇▇▇▇▇▇ Ltd. 100 Operating
MML Field Marketing Ltd. 100 Operating
Corporate Television Network Ltd. 50 Operating
UNITED STATES
Young & Rubicam Inc. 100 Holding
Cygnet Holdings Inc. 100 Operating
Summit Insurance Company 100 Operating
BM Communications Inc. 100 Holding
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇/NIS, Inc. 100 Operating
Black, Kelly, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Inc. 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc. 100 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ (Puerto Rico) Inc. 100 Operating
Landor Associates 100 Operating
Landor Associates International 100 Operating
RSBC Vestiges, Inc. 100 Operating
Y&R Far East Holdings, Inc. 100 Holding
Young & Rubicam L.P. 100 Partnership
9
125
Creswell, Munsell, ▇▇▇▇▇ & ▇▇▇▇▇▇ ▇.▇. 33 Partnership
Sive/Young & Rubicam L.P. 10 Partnership
*Lord Dentsu & Partners LLC 50 Operating
Young & Rubicam Puerto Rico, Inc. 100 Operating
URUGUAY
Young & Rubicam Inc. (New York corporation)
Cygnet Holdings Inc. (Delaware corporation) 100 Holding
ViceVersa S.A. 35 Operating
VENEZUELA
Young & Rubicam Inc. (New York corporation)
Cygnet Holdings Inc. (Delaware corporation) 100 Holding
JMC Creatividad Orientada, C.A. 49 Operating
Optimizacion ADD, C.A. 49 Operating
Wunderman Cato ▇▇▇▇▇▇▇ Promocion y
Mercadeo Directo, C.A. 49 Operating
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Relaciones Publicas, C.A. 49 Operating
ZAMBIA
Young & Rubicam Inc. (New York corporation)
Young & Rubicam Zambia Ltd. 100 Operating
ZIMBABWE
Young & Rubicam Inc. (New York corporation)
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ & Rubicam 25 Operating
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126
Schedule 6.20
Filing Jurisdictions
================================================================================
Debtor Name and Location of Filing Jurisdictions
Chief Executive Office
================================================================================
Black, Kelly, Scruggs, & ▇▇▇▇▇▇ Inc., Secretary of State, New York
Delaware corporation Recorder of Deeds, District of Columbia
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ County Clerk, New York County (NY)
20006
Tax ID: ▇▇-▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
BM Communications Inc., Secretary of State, New York
Delaware corporation Recorder of Deeds, District of Columbia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ County Clerk, New York County (NY)
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Tax ID: Pending
--------------------------------------------------------------------------------
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc., Secretary of State, New York
Delaware corporation County Clerk, New York County (NY)
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇/NIS Inc., Secretary of State, New York
Delaware corporation Recorder of Deeds, District of Columbia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ County Clerk, New York County (NY)
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Tax ID: Pending
--------------------------------------------------------------------------------
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ (Puerto Rico), Inc., Secretary of State, New York
Delaware corporation County Clerk, New York County (NY)
▇▇▇▇▇ ▇▇▇▇▇ ▇▇. #▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Cygnet Holdings Inc., Secretary of State, New York
Delaware corporation County Clerk, New York County (NY)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Landor Associates, Secretary of State, New York
California corporation Secretary of State, California
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ Department of ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ Secretary of State, Illinois
Tax ID: ▇▇-▇▇▇▇▇▇▇ Department of Licensing, Washington
County Clerk, New York County (NY)
--------------------------------------------------------------------------------
127
================================================================================
Debtor Name and Location of Filing Jurisdictions
Chief Executive Office
================================================================================
Landor Associates International, Secretary of State, New York
California corporation Secretary of State, California
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ County Clerk, New York County (NY)
94111
Tax ID: ▇▇-▇▇▇▇▇▇▇
(Japan)
Sogo Hirakawacho Building
l-4-12, Hirakawacho
--------------------------------------------------------------------------------
RSBC Vestiges Inc., Secretary of State, New York
New York corporation County Clerk, New York County (NY)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Y&R Far East Holdings, Inc., Secretary of State, New York
Delaware corporation County Clerk, New York County (NY)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Young & Rubicam Inc., Secretary of State, New York
New York corporation Department of State, Florida
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Secretary of State, Illinois
Tax ID: ▇▇-▇▇▇▇▇▇▇ Department of Licensing, Washington
County Clerk, New York County (NY)
--------------------------------------------------------------------------------
128
================================================================================
Debtor Name and Location of Filing Jurisdictions
Chief Executive Office
================================================================================
Young & Rubicam L.P., Secretary of State, New York
Delaware limited partnership Secretary of State, California
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Secretary of State, Colorado
Tax ID: ▇▇-▇▇▇▇▇▇▇ Secretary of State, Delaware
Recorder of Deeds,
District of Columbia
Local MA Address: Department of State, Florida
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Secretary of State, Illinois
Secretary of State, Iowa
Local OH Addresses: Secretary of State, Kansas
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Secretary of State, Michigan
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Secretary of State, Nevada
Secretary of State, Ohio
Secretary of State, Pennsylvania
Prothonotary's Office,
Allegheny County PA
Secretary of State, Texas
State Corporation Commission,
Virginia
County Clerk, ▇▇▇▇ County, (GA)
Clerk's Office, Boston, (MA)
County Clerk, New York County (NY)
County Clerk, Monroe County (NY)
County Clerk, ▇▇▇▇▇▇▇▇ County, (OH)
County Court Clerk, Fairfax
County, (VA)
--------------------------------------------------------------------------------
Young & Rubicam Puerto Rico, Inc., Secretary of State, New York
New York corporation County Clerk, New York County (NY)
▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
================================================================================
129
SCHEDULE 6.22
Young & Rubicam Inc. SKR 5,000,000 (expires 3/31/97)
Young & Rubicam Inc. GBP 8,800,000 (expires 2/27/97)
130
Supplement Schedule to Schedule 6.22
Pursuant to Subsections 6.22 and 7.1(y)
of the Credit Agreement
Young & Rubicam Inc. A$ 9,000,000 (expires 12/31/96)
Waring & ▇▇▇▇▇▇ US$127,643 (expires 7/31/97)
Young & Rubicam Inc. FF 25,000,000 (expires 11/30/97)
131
SCHEDULE 8.11
French equityholders who hold options to purchase common stock will be
subject to the following:
Changes in Implementation of Rollover and Non-Rollover Equity in Europe
French Rollover Options
1. The number of Rollover Options will be calculated as indicated in the
agreement (i.e. the aggregate spread between the exercise price on existing
options and $115 divided by $86.25).
2. However, the exercise price on such options will NOT be reduced to $28.75 per
share. Instead, the option price will continue at the current level (which is,
in every case, greater then $28.75).
Benefit: Optionee qualifies for capital gains, in accordance with initial
design of option plan in France. While the Company will not be able to get full
deduction of spread as compensation, the Company will realize some benefits
because the optionees will be paying more than $28.75 per share.
French Non-Rollover Options
1. Optionees will be allowed to continue to hold such options until the earlier
of a) satisfaction of the 5 year holding period required to qualify for capital
gains treatment under French tax law, or b) termination of employment with Y&R.
At such time the employee must exercise the option, or forfeit rights under the
option.
2. The Company will have a call on the shares issued pursuant to the exercise of
such options at the lower of a) $115 per share, or b) 85% (or 70%, if
applicable) of the then current Public Market Value.
Benefit: Optionee qualifies for capital gains, in accordance with initial
design of option plan in France. While the Company will not be able to get full
deduction of the spread as compensation, the Company will realize some benefits
because the payment of the spread is being deferred (effectively the optionees
are making an interest free loan to the Company).
132
SCHEDULE 9.2(e)
Approximately $28.0 million in aggregate principal amount of installments notes
outstanding on the date hereof and payable over four years issued to certain
former equityholders of Young & Rubicam in connection with the termination of
their employment and the repurchase by Young & Rubicam of the equity owned by
such former employees. If any amount of principal or interest on such
installments notes is outstanding after the Second Drawdown Date, any such
amounts shall be deemed Unsecured Indebtedness permitted only to the extent set
forth in subsection 9.2(h) of the Credit Agreement.
Any payment of principal or interest of such installment notes shall not be
considered a Restricted Payment for any purposes under the Credit Agreement.
133
Schedule 9.2(j)
Terms of
Subordinated Payment Obligations Under
ss.ss.4.05 and 4.06 of the
Stockholders' Agreement
--------------------------------------
1. Non-negotiable
2. Principal Amount: Aggregate Applicable Call Price or
Applicable Put Price for shares of
Capital Stock to be repurchased from
Management Investor or Director
Investor.
3. Term: Principal payable in four
installments: First installment on
Applicable Payment Date (as defined
under the Stockholders' Agreement, the
June 30 or December 31 which follows
the later of the Applicable Valuation
Date and 30 days after notice of
exercise), the remaining installments
on the 1st, 2nd and 3rd anniversaries
of such date.
4. Interest: The Specified Rate, which shall be
equal to the applicable Federal rate
in effect under Section 1274(d) of the
Internal Revenue Code of 1986, at the
time such Subordinated Payment
Obligation is first incurred, for
obligations of like maturity
compounded semiannually, payable
annually.
5. Subordination: All claims with respect to principal
or interest, or otherwise, relating to
the Subordinated Payment Obligations
shall be subordinated and junior in
right of payment to all claims under
the Credit Facilities, as set forth
below:
(a) Deferral of Interest and/or
Principal:
Unless and until permitted under
Section 9.8 of the Credit Agreement
and as provided herein, no payment or
other distribution of any kind will be
made in respect of interest or
principal, or otherwise, on the
Subordinated Payment Obligations,
whether in cash, property, securities
or otherwise; provided that payments
shall not, in any event be deferred
after December 31, 2003. In the event
that, as of any date on which a
payment of principal or interest is
required under the Subordinated
Payment Obligations, the aggregate
amount required by the Company to (1)
purchase Capital Stock under Article
IV of the Stockholders'
134
Agreement and (2) make payments of
principal and interest on Subordinated
Payment Obligations exceeds the
maximum amount of Restricted Payments
the Company is permitted to make under
Section 9.8 of the Credit Agreement,
then the amount of Restricted Payments
permitted to be made as of such date
will be made in the following order:
first, to pay $1.00 per share of
Capital Stock as a portion of the
purchase price for shares to be
purchased on such date;
second, to pay amounts payable as
interest on Subordinated Payment
Obligations (to be paid pro rata to
the extent insufficient amounts are
available);
third, if and to the extent the
Company so elects, to purchase, or
make payments with respect to, shares
of Capital Stock which the Company is,
or was, required to purchase under the
Stockholders' Agreement in connection
with the Termination of Employment of
a Management Investor as a result of
death or Permanent Disability,
payments with respect to shares
previously purchased in connection
with a Termination of Employment where
such Management Investor subsequently
died or became permanently disabled
and payments to Management
Co-Investors (as such terms are
defined in the Stockholders'
Agreement);
fourth, to pay the principal amount
of the Subordinated Payment
Obligations (including amounts of
interest which become principal as a
result of the deferral pursuant to
this provision) (to be paid pro rata
to the extent insufficient amounts are
available);
fifth, to pay, pro rata, a portion
of all such other amounts then due.
Any payments of principal or interest
not made as a result of such priority
of payments shall thereafter be
treated as additional principal and
shall bear interest at the Specified
Rate until the next applicable date
for payment of interest or principal
(with such additional principal being
payable pro rata over the remaining
installments);
-2-
135
provided that payment shall not, in
any event be deferred after December
31, 2003.
(b) In Event of Default:
No payment of principal or interest,
or otherwise, shall be made in respect
of the Subordinated Payment
Obligations upon the occurrence, and
during the continuance, of a "Default"
or "Event of Default" under the Credit
Agreement.
(c) Liquidation or Bankruptcy:
All obligations (principal, interest,
fees, indemnities, costs, expenses and
otherwise) under the Credit Agreement
shall be paid in full before any
payments are made with respect to the
Subordinated Payment Obligations.
6. Events of Default: (a) Right to Accelerate:
Subordinated Payment Obligations will
accelerate:
- upon notice by the Holder if the
Company defaults in the payment of
principal or interest, except if
payment or principal or interest is
prohibited under Sections 5(a) or
5(b) above;
- upon voluntary bankruptcy petition
and similar events;
- if within 60 days involuntary
proceeding not dismissed.
(b) No Enforcement by Holder:
So long as any obligations under the
Credit Agreement remain unpaid, the
holder, of any Subordinated Payment
Obligation shall not (i) commence any
involuntary proceeding or (ii) if and
so long as payment is required to be
deferred under Sections 5(a) or 5(b)
above, declare any payment default.
-3-
136
SCHEDULE 9.3(f)
None
137
SCHEDULE 9.4(a)
Below is a schedule of guarantee obligations of Young & Rubicam Inc.:
NZ$ 750,000
US$ 11,000,000
S$ 3,000,000 (Singapore)
NT$ 15,000,000 (Taiwan)
Baht 34,500,000 (Thailand)
Won 200,000,000 (Korea)
HK$ 6,250,000
US$ 625,000
HK$2,500,000
HK$5,750,000
NZ$ 750,000
The US$ equivalent of the above guarantees is US$18,800,000
138
EXHIBIT A TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF ADDENDUM]
ADDENDUM
The undersigned Lender (i) agrees to all of the provisions of the
Credit and Guarantee Agreement, dated as of December __, 1996 (the "Credit
Agreement"), among Young & Rubicam Holdings Inc., a New York corporation ("Y&R
Holdings"), Young & Rubicam Inc., a New York corporation ("Y&R Inc. (New
York)"), Young & Rubicam Inc., a Delaware corporation ("Y&R Inc. (Delaware)"),
and Young & Rubicam L.P., a Delaware limited partnership ("Y&R LP"; collectively
with Y&R Holdings, Y&R Inc. (New York) and Y&R Inc. (Delaware), the "Parent
Borrowers"), the Subsidiary Borrowers (as defined in the Credit Agreement) from
time to time parties thereto, the several banks and other financial institutions
from time to time parties thereto (the "Lenders"), Bank of America National
Trust and Savings Association, as Administrative Agent for the Lenders and Bank
of America International Limited, a bank organized under the laws of England, as
European Payment Agent, and (ii) agrees to become, and hereby becomes, a party
thereto as a "Lender" for all purposes of the Credit Agreement with the
Commitments described in Schedule 1.1(a) to the Credit Agreement.
We hereby confirm that the notice and account information with
respect to the undersigned Lender set forth on Schedule 1.1(a) to the Credit
Agreement is complete and correct:
1. Name of Lender:
2. Address for Notices:
Facsimile Number:
Attention:
3. Administrative Contact*:
Facsimile Number:
Attention:
[NAME OF LENDER]
By:
---------------------------
Name:
Title:
_________ __, 1996
----------
* To the extent not otherwise provided.
139
EXHIBIT B TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF BORROWING SUBSIDIARY AGREEMENT]
BORROWING SUBSIDIARY AGREEMENT, dated as of _____________ __, 19__
(this "Agreement"), among [NAME OF SUBSIDIARY BORROWER], a ________________ (the
"Subsidiary"), [YOUNG & RUBICAM HOLDINGS INC., a New York corporation ("Y&R
Holdings"),] [YOUNG & RUBICAM INC., a New York corporation ("Y&R Inc. (New
York)"),] YOUNG & RUBICAM INC., a Delaware corporation ("Y&R Inc. (Delaware)"),
YOUNG & RUBICAM L.P., a Delaware limited partnership ("Y&R LP"; collectively
with [Y&R Holdings, Y&R Inc. (New York) and] Y&R Inc. (Delaware), the "Parent
Borrowers"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a
national banking association, as administrative agent (in such capacity, the
"Administrative Agent") for the several banks and other financial institutions
(the "Lenders") from time to time parties to the Credit and Guarantee Agreement,
dated as of December __, 1996 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Parent Borrowers, the
Subsidiary Borrowers (as defined in the Credit Agreement) from time to time
parties thereto, the Lenders, the Administrative Agent and Bank of America
International Limited, a bank organized under the laws of England, as European
Payment Agent.
The parties hereto hereby agree as follows:
1. Capitalized terms used herein but not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.
2. Pursuant to subsection 5.17 of the Credit Agreement, the Parent
Borrowers hereby designate the Subsidiary as a Subsidiary Borrower under the
Credit Agreement.
3. Each of the Parent Borrowers and the Subsidiary, jointly and
severally, represents and warrants that the representations and warranties
contained in the Credit Agreement are true and correct on and as of the date
hereof to the extent such representations and warranties relate to the
Subsidiary and this Agreement.
4. Each Parent Borrower agrees that the Guarantee of the Parent
Borrowers contained in Section 11 of the Credit Agreement will apply to the
Obligations of the Subsidiary as a Subsidiary Borrower.
5. Upon execution of this Agreement by each of the Parent Borrowers,
the Subsidiary and the Administrative Agent, the Subsidiary shall be a party to
the Credit Agreement and shall be a "Subsidiary Borrower" and a "Borrower" for
all purposes thereof, and the Subsidiary hereby agrees to be bound by all
provisions of the Credit Agreement.
6. This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
140
2
7. This Agreement may be executed in any number of counterparts
(including by facsimile transmission), each of which shall be an original, and
all of which, when taken together, shall constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their authorized officers as of the date first appearing
above.
[SUBSIDIARY]
By:
----------------------------
Title:
[YOUNG & RUBICAM HOLDINGS INC.
By:
----------------------------
Title:]
[YOUNG & RUBICAM INC., a New York
corporation
By:
----------------------------
Title:]
[YOUNG & RUBICAM INC., a Delaware
corporation
By:
----------------------------
Title:]
141
3
YOUNG & RUBICAM L.P.
By: YOUNG & RUBICAM INC., its
General Partner
By:
----------------------------
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Administrative Agent
By:
----------------------------
Title:
142
EXHIBIT C TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF BORROWING SUBSIDIARY TERMINATION]
BORROWING SUBSIDIARY TERMINATION
Bank of America National Trust
and Savings Association, as Administrative Agent
for the Lenders referred to below
[Address]
____________, _____
Ladies and Gentlemen:
Reference is made to the Credit and Guarantee Agreement, dated as of
__________ __, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among [Young & Rubicam Holdings Inc., a New York
corporation ("Y&R Holdings"),] [Young & Rubicam Inc., a New York corporation
("Y&R Inc. (New York)"),] Young & Rubicam Inc., a Delaware corporation ("Y&R
Inc. (Delaware)") and Young & Rubicam L.P., a Delaware limited partnership ("Y&R
LP"; collectively with [Y&R Holdings, Y&R Inc. (New York) and] Y&R Inc.
Delaware, the "Parent Borrowers"), the Subsidiary Borrowers (as defined in the
Credit Agreement) from time to time parties thereto, the several banks and other
financial institutions from time to time parties thereto (the "Lenders"), and
Bank of America National Trust and Savings Association, as Administrative Agent
for the Lenders. Capitalized terms used and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement.
The undersigned Parent Borrowers hereby terminate the status and
rights of _______________ (the "Terminated Subsidiary Borrower") as a Subsidiary
Borrower under the Credit Agreement. [The undersigned Parent Borrowers represent
and warrant that no Loans made to the Terminated Subsidiary Borrower are
outstanding as of the date hereof and that all amounts payable by the Terminated
Subsidiary Borrower in respect of interest and/or fees (and, to the extent
notified by the Administrative Agent or any Lender, any other amounts payable
under the Credit Agreement) pursuant to the Credit Agreement have been paid in
full on or prior to the date hereof.] [The undersigned Parent Borrowers
acknowledge that the Terminated Subsidiary Borrower shall continue to be a
Subsidiary Borrower until such time as all Loans made to the Terminated
Subsidiary Borrower shall have been prepaid and all amounts payable by the
Terminated Subsidiary Borrower in respect of interest and/or fees (and, to the
extent notified by the Administrative Agent or any Lender, any other amounts
payable under the Credit Agreement) pursuant to the Credit Agreement shall have
been paid in full, provided that the Terminated Subsidiary Borrower shall not
have the right to make further borrowings as a Subsidiary Borrower under the
Credit Agreement.]
143
2
This Borrowing Subsidiary Termination shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York.
This Borrowing Subsidiary Termination may be executed in any number of
counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature page
of this Borrowing Subsidiary Termination by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
Very truly yours,
[YOUNG & RUBICAM HOLDINGS INC.
By:
----------------------------
Title:]
[YOUNG & RUBICAM INC., a New York
corporation
By:
----------------------------
Title:]
YOUNG & RUBICAM INC., a Delaware
corporation
By:
----------------------------
Title:
144
3
YOUNG & RUBICAM L.P.
By: YOUNG & RUBICAM INC.,
its General Partner
By:
----------------------------
Title:
Acknowledged and Agreed:
[Subsidiary]
By:
----------------------------
Title:
145
EXHIBIT D TO
CREDIT AND GUARANTEE AGREEMENT
FRONTING LENDER ADDENDUM
The undersigned (i) hereby agrees to become a Fronting Lender under
the Credit and Guarantee Agreement, dated as of __________ __, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among [Young & Rubicam Holdings Inc., a New York corporation ("Y&R Holdings"),]
[Young & Rubicam Inc., a New York corporation ("Y&R Inc. (New York)"),] Young &
Rubicam Inc., a Delaware corporation ("Y&R Inc. (Delaware)") and Young & Rubicam
L.P., a Delaware limited partnership ("Y&R LP"; collectively with [Y&R Holdings,
Y&R Inc. (New York) and] Y&R Inc. (Delaware), the "Parent Borrowers"), the
Subsidiary Borrowers (as defined in the Credit Agreement) from time to time
parties thereto, the several banks and other financial institutions from time to
time parties thereto, Bank of America National Trust and Savings Association, as
Administrative Agent for the Lenders and Bank of America International Limited,
a bank organized under the laws of England, as European Payment Agent, with
respect to the Subsidiary Borrowers and Fronted Offshore Currencies, and subject
to the other terms and conditions, set forth on Schedule 1 hereto, (ii) hereby
agrees to be bound by the provisions of the Credit Agreement applicable to
Fronting Lenders, (iii) shall be entitled to the benefits of the provisions of
the Credit Agreement and the other Loan Documents insofar as such provisions
relate to Fronting Lenders and Fronted Offshore Loans, including, without
limitation, Section 4 and subsection 11.1, and (iv) if it is not already a
Lender under the Credit Agreement, shall be entitled to the benefits of
subsection 13.5 to the same extent as if it were a Lender under the Credit
Agreement.
To the extent the undersigned is not a Lender under the Credit
Agreement, the undersigned confirms that it has received a copy of the Credit
Agreement and the other Loan Documents and appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are incidental thereto.
The provisions of subsections 13.12, 13.14 and 13.15 of the Credit
Agreement are by this reference incorporated herein mutatis mutandis.
This Addendum shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
Unless otherwise defined herein, terms which are defined in the
Credit Agreement and used herein are so used as so defined.
[NAME OF FRONTING LENDER]
By:
-----------------------
Title:
[Date]
146
Schedule 1
to Fronting Lender Addendum
TERMS OF FRONTING LENDER COMMITMENT
1. The Fronted Offshore [Currencies] [Currency] shall be
___________________.
2. The Subsidiary Borrower with respect to the Fronted Offshore
Loans made in each Fronted Offshore Currency specified in Section 1 above shall
be as follows:
Fronted Offshore Currency Subsidiary Borrower
------------------------- -------------------
3. The Fronted Offshore Currency Sublimit with respect to each
Fronted Offshore Currency specified in Section 1 above shall be as follows:
Fronted Offshore Currency Fronted Offshore Currency Sublimit
------------------------- ----------------------------------
4. The Fronting Lender's Payment Office with respect to each Fronted
Offshore Currency specified in Section 1 above shall be as follows (or such
other office as the Fronting Lender may from time to time specify for such
purpose in accordance with subsection 13.2 of the Credit Agreement):
Fronted Offshore Currency Fronting Lender's Payment Office
------------------------- --------------------------------
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5. The Interest Payment Dates with respect to Fronted Offshore Loans
in each Fronted Offshore Currency specified in Section 1 above shall be as
follows:
Fronted Offshore Currency Interest Payment Dates
------------------------- ----------------------
[6. The Interest Periods with respect to Fronted Offshore Loans in
each Fronted Offshore Currency specified in Section 1 above shall be as follows:
Fronted Offshore Currency Interest Periods]
------------------------- -----------------
7. Notices of borrowing pursuant to subsection 4.2 of the Credit
Agreement shall be given by _____________ [specify timing of notices of
borrowing].
8. Each borrowing of Fronted Offshore Loans in each Fronted Offshore
Currency specified in Section 1 above shall be in the following minimum amounts:
Fronted Offshore Currency Minimum Borrowing Amount
------------------------- ------------------------
9. The Fronted Offshore Loans in each Fronted Offshore Currency
specified in Section 1 above shall be made available in [specify funds in which
Fronted Offshore Loans will be made available].
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3
10. Each prepayment of Fronted Offshore Loans in each Fronted
Offshore Currency specified in Section 1 above shall be in the minimum amounts
specified below:
Fronted Offshore Currency Minimum Prepayment Amount
------------------------- -------------------------
11. Notices of any prepayment pursuant to Section 10 above shall be
given as follows:
Fronted Offshore Currency Requirement for Notices
------------------------- -----------------------
12. The Fronting Lender's commitment to make Fronted Offshore Loans
in each Fronted Offshore Currency specified in Section 1 above shall
terminate on the dates specified below:
Fronted Offshore Currency Commitment Termination Date
------------------------- ---------------------------
13. The Fronting Lender may terminate its commitment to make Fronted
Offshore Loans to any Subsidiary Borrower in a Fronted Offshore Currency upon
______ days' prior written notice to such Subsidiary Borrower.
14. No later than _______ [a.m./p.m.] on each Calculation Date [and
on each other date on which such calculation is required under the Credit
Agreement] with respect to the Fronted Offshore Currency specified in Section 1
above, the Fronting Lender shall determine the Spot Rate with respect to such
Fronted Offshore Currency.
149
[New York]
MORTGAGE
from
YOUNG & RUBICAM INC., Mortgagor
to
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Administrative Agent, Mortgagee
DATED AS OF DECEMBER ____, 1996
After recording, please return to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
a partnership which includes
professional corporations
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
150
EXHIBIT E TO
CREDIT AND GUARANTEE AGREEMENT
[New York]
MORTGAGE
THIS MORTGAGE, dated as of December __, 1996 is made by YOUNG &
RUBICAM INC., a Delaware corporation ("Mortgagor"), whose address is ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, to BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association ("Mortgagee"), as administrative
agent for the banks and other financial institutions (the "Lenders") from time
to time parties to the Credit Agreement (as defined below), whose address is
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. References to this
"Mortgage" shall mean this instrument and any and all renewals, modifications,
amendments, supplements, extensions, consolidations, substitutions, spreaders
and replacements of this instrument.
Background
A. Mortgagor has entered into a Credit Agreement dated as even date
herewith (as the same may be amended, supplemented or otherwise modified from
time to time, the "Credit Agreement") with Mortgagee and other banks and
financial institutions defined as Lenders therein. Capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the Credit
Agreement. References in this Mortgage to the "Default Rate" shall mean the
interest rate provided in Section 5.8(f) of the Credit Agreement.
B. Mortgagor is the owner of the parcel(s) of real property
described on Schedule A attached hereto (such real property, together with all
buildings, improvements, structures and fixtures now or subsequently located
thereon (the "Improvements"), being collectively referred to as the "Real
Estate").
C. Pursuant to the terms and conditions of the Credit Agreement, the
Lenders have agreed to (i) make certain Revolving Credit Loans, Swing Line Loans
and Fronted Offshore Loans to Mortgagor and certain affiliates of Mortgagor;
(ii) make certain Term Loans to Mortgagor in the aggregate principal amount not
to exceed $400,000,000; and (iii) issue Letters of Credit on behalf of
Mortgagor, on the condition among others that, the obligation of the Mortgagor
to pay interest and principal and all other amounts in respect of the Term Loan
to Mortgagee and the other Lenders under the Credit Agreement, shall be secured
by a first mortgage Lien on and security interest in the Real Estate and
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other Mortgaged Property (as hereinafter defined).
D. In order to satisfy said condition, Mortgagor has agreed to execute
this Mortgage for the purpose of granting a mortgage lien to Mortgagee upon all
of Mortgagor's right, title, estate and interest in the Real Estate and other
Mortgaged Property.
I. Granting Clauses
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Mortgagor agrees that to secure:
(a) (i) repayment of the indebtedness evidenced by each of the Term
Notes (collectively, the "Notes"), and any and all renewals, extensions
for any period, rearrangements and/or modifications of each Note or any
one or more of them, and (ii) all interest and fees payable thereon; and
(b) payment of all other obligations and liabilities of Mortgagor to
the Lenders (including, without limitation, interest accruing after the
maturity of the Loans and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to Mortgagor, whether or not a
claim for post-filing or post-petition interest is allowed in such
proceeding), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, the Notes, this Mortgage or any other
document made, delivered or given in connection herewith or therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees, charges and disbursements of counsel to
Agent or to any Lender that are required to be paid by Mortgagor pursuant
to the terms of the Credit Agreement, this Mortgage, any other Loan
Document or otherwise, to the extent and only to the extent as such
Obligations shall be limited pursuant to Section III hereof) (the items
set forth in the foregoing clauses (a) and (b) being referred to herein
collectively as the "Indebtedness"); and
(c) the performance of all covenants, agreements, obligations and
liabilities of Mortgagor, other than for any Revolving Loans or Revolving
Offshore Loans (the "Obligations") under or pursuant to the provisions of
the Credit Agreement, the Notes, this Mortgage, or any of the other
Security Documents or any of the other Loan Documents, to the extent and
only to the extent as such Obligations shall be limited pursuant to
Section III hereof;
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II. MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN,
AND HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever of
Mortgagor, in possession or expectancy, in and to the Real Estate or any
part thereof;
(C) all right, title and interest of Mortgagor in, to and under all
easements, rights of way, gores of land, streets, ways, alleys, passages,
sewer rights, waters, water courses, water and riparian rights,
development rights, air rights, mineral rights and all estates, rights,
titles, interests, privileges, licenses, tenements, hereditaments and
appurtenances belonging, relating or appertaining to the Real Estate, and
any reversions, remainders, rents, issues, profits and revenue thereof and
all land lying in the bed of any street, road or avenue, in front of or
adjoining the Real Estate to the center line thereof;
(D) all of the right, title and interest of Mortgagor in fixtures,
chattels, business machines, machinery, apparatus, equipment, furnishings,
fittings and articles of personal property of every kind and nature
whatsoever, and all appurtenances and additions thereto and substitutions
or replacements thereof (together with, in each case, attachments,
components, parts and accessories) currently owned or subsequently
acquired by Mortgagor and now or subsequently attached to, or contained in
or used or usable in any way in connection with any operation or letting
of the Real Estate, including but without limiting the generality of the
foregoing, all screens, awnings, shades, blinds, curtains, draperies,
artwork affixed to the Real Estate, carpets, rugs, storm doors and
windows, furniture and furnishings affixed to the Real Estate, heating,
electrical, and mechanical equipment, recessed lighting, switchboards,
plumbing, ventilating, air conditioning and central air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators, loading
and unloading equipment and systems, cleaning systems (including window
cleaning apparatus), telephones, communication systems (including
satellite dishes and antennae), sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security systems,
motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description (all of the foregoing
in this paragraph (D) being referred to as the "Equipment");
(E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements to,
the Real Estate and the Equipment, subsequently acquired by or released to
Mortgagor or
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4
constructed, assembled or placed by Mortgagor on the Real Estate,
immediately upon such acquisition, release, construction, assembling or
placement, including, without limitation, any and all building materials
whether stored at the Real Estate or offsite, and, in each such case,
without any further mortgage, conveyance, assignment or other act by
Mortgagor;
(F) all right, title and interest of Mortgagor in, to and under all
leases, subleases, underlettings, concession agreements, management
agreements, licenses and other agreements relating to the use or occupancy
of the Real Estate or the Equipment or any part thereof, now existing or
subsequently entered into by Mortgagor and whether written or oral and all
guarantees of any of the foregoing (collectively, as any of the foregoing
may be amended, restated, extended, renewed or modified from time to time,
the "Leases"), and all rights of Mortgagor in respect of cash and
securities deposited thereunder and the right to receive and collect the
revenues, income, rents, issues and profits thereof, together with all
other rents, royalties, issues, profits, revenue, income and other
benefits arising from the use and enjoyment of the Mortgaged Property (as
defined below) (collectively, the "Rents");
(G) all of the right, title and interest of Mortgagor in books and
records relating to or used in connection with the operation of the Real
Estate or the Equipment or any part thereof; all general intangibles
related to the operation of the Improvements now existing or hereafter
arising;
(H) all unearned premiums under insurance policies now or
subsequently obtained by Mortgagor relating to the Real Estate or
Equipment and Mortgagor's interest in and to all proceeds of any such
insurance policies (including title insurance policies) including the
right to collect and receive such proceeds, subject to the provisions
relating to insurance generally set forth below; and all awards and other
compensation, including the interest payable thereon and the right to
collect and receive the same, made to the present or any subsequent owner
of the Real Estate or Equipment for the taking by eminent domain,
condemnation or otherwise, of all or any part of the Real Estate or any
easement or other right therein;
(I) all right, title and interest of Mortgagor in and to (i) all
contracts from time to time executed by Mortgagor or any manager or agent
on its behalf relating to the ownership, construction, maintenance,
repair, operation, occupancy, sale or financing of the Real Estate or
Equipment or any part thereof and all agreements relating to the purchase
or lease of any portion of the Real Estate or any property which is
adjacent or peripheral to the Real Estate, together with the right to
exercise such options and all
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5
leases of Equipment, (ii) all consents, licenses, building permits,
certificates of occupancy and other governmental approvals relating to
construction, completion, occupancy, use or operation of the Real Estate
or any part thereof and (iii) all drawings, plans, specifications and
similar or related items relating to the Real Estate; and
(J) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering the
foregoing property or otherwise on deposit with or held by Mortgagee as
provided in this Mortgage; all capital, operating, reserve or similar
accounts held by or on behalf of Mortgagor and related to the operation of
the Mortgaged Property, whether now existing or hereafter arising and all
monies held in any of the foregoing accounts and any certificates or
instruments related to or evidencing such accounts;
(K) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now owned or
held or subsequently acquired by Mortgagor and described in the foregoing
clauses (A) through (E) are collectively referred to as the "Premises", and
those described in the foregoing clauses (A) through (K) are collectively
referred to as the "Mortgaged Property").
III. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE
MAXIMUM AMOUNT OF PRINCIPAL INDEBTEDNESS SECURED BY THIS MORTGAGE AT THE TIME OF
EXECUTION OR WHICH UNDER ANY CONTINGENCY MAY HEREAFTER BECOME SECURED HEREBY AT
ANY TIME IS TWENTY-FIVE MILLION DOLLARS ($25,000,000), WHICH WAS ADVANCED ON THE
DATE HEREOF AND EVIDENCED BY THE TERM NOTES; PLUS (I) INTEREST ON THE AFORESAID
MAXIMUM AMOUNT OF PRINCIPAL INDEBTEDNESS AT THE RATES SET FORTH IN THE LOAN
AGREEMENT, (II) SUMS TO PAY IMPOSITIONS (AS DEFINED BELOW), (III) SUMS TO PAY
PREMIUMS ON INSURANCE POLICIES COVERING THE MORTGAGED PROPERTY, (IV) EXPENSES
INCURRED AFTER AN EVENT OF DEFAULT IN UPHOLDING OR ENFORCING THE LIEN OF THIS
MORTGAGE, INCLUDING, BUT NOT LIMITED TO, THE EXPENSES OF ANY LITIGATION TO
PROSECUTE OR DEFEND THE RIGHTS AND LIEN CREATED BY THIS MORTGAGE, (V) COSTS OF
REMOVAL OF OR OTHERWISE RELATED TO HAZARDOUS MATERIAL OR ASBESTOS INCURRED AFTER
AN EVENT OF DEFAULT, (VI) ANY AMOUNT, COSTS OR CHARGE TO WHICH MORTGAGEE BECOMES
SUBROGATED, UPON PAYMENT, WHETHER UNDER RECOGNIZED PRINCIPLES OF LAW OR EQUITY,
OR UNDER EXPRESS STATUTORY AUTHORITY AND (VII) ANY OTHER AMOUNT SECURED BY THIS
MORTGAGE WHICH IF NOT LIMITED BY SUCH LIMITATION WOULD NOT INCREASE THE AMOUNT
OF MORTGAGE RECORDING TAXES, IF ANY, PAYABLE WITH RESPECT TO THIS MORTGAGE.
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until
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the Indebtedness is fully paid and the Obligations fully performed.
IV. Terms and Conditions
Mortgagor further represents, warrants, covenants and agrees with
Mortgagee as follows:
1. Warranty of Title. Mortgagor warrants that it has indefeasible
title to the Premises, subject only to the matters that are set forth in
Schedule B attached hereto (the "Permitted Exceptions").
2. Payment of Indebtedness. Mortgagor shall pay the Indebtedness at
the times and places and in the manner specified in the Notes and Credit
Agreement and shall perform all the Obligations.
3. Requirements.
(a) Mortgagor shall materially comply with, or cause to be
materially complied with, and conform in all material respects to all present
and future laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements, and irrespective of the nature of the work to be
done, of each of the United States of America, any State and any municipality,
local government or other political subdivision thereof and any agency,
department, bureau, board, commission or other instrumentality of any of them,
now existing or subsequently created (collectively, "Governmental Authority")
which has jurisdiction over the Mortgaged Property and all covenants,
restrictions and conditions now or later of record which may be applicable to
any of the Mortgaged Property, or to the use, manner of use, occupancy,
possession, operation, maintenance, alteration, repair or reconstruction of any
of the Mortgaged Property. All present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements of
every Governmental Authority applicable to Mortgagor or to any of the Mortgaged
Property and all covenants, restrictions, and conditions which now or later may
be applicable to any of the Mortgaged Property are collectively referred to as
the "Legal Requirements".
(b) From and after the date of this Mortgage, Mortgagor shall not by
act or omission permit any building or other improvement on any premises not
subject to the lien of this Mortgage to rely on the Premises or any part thereof
or any interest therein to fulfill any Legal Requirement, and Mortgagor hereby
assigns to Mortgagee any and all rights to give consent for all or any portion
of the Premises or any interest therein to be so used. Mortgagor shall not by
act or omission impair the integrity of any of the Real Estate as a single
zoning lot separate and apart from all other premises. Mortgagor represents that
each parcel of the Real Estate constitutes a legally subdivided lot, in
compliance with all subdivision laws and
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similar Legal Requirements. Any act or omission by Mortgagor which would result
in a violation of any of the provisions of this subsection shall be void.
4. Payment of Taxes and Other Impositions. (a) Promptly when due and
payable, Mortgagor shall pay and discharge all taxes of every kind and nature
(including, without limitation, all real and personal property, income,
franchise, withholding, transfer, gains, profits and gross receipts taxes), all
charges for any easement or agreement maintained for the benefit of any of the
Mortgaged Property, all general and special assessments, levies, permits,
inspection and license fees, all water and sewer rents and charges, vault taxes,
and all other public charges even if unforeseen or extraordinary, imposed upon
or assessed against or which may become a lien on any of the Mortgaged Property,
or arising in respect of the occupancy, use or possession thereof, together with
any penalties or interest on any of the foregoing (all of the foregoing are
collectively referred to as the "Impositions"), except for such Impositions as
Mortgagor is contesting in accordance with Section 6.11 of the Credit Agreement.
Upon request by Mortgagee, Mortgagor shall deliver to Mortgagee (i) original or
copies of receipted bills and cancelled checks evidencing payment of such
Imposition if it is a real estate tax or other public charge and (ii) evidence
reasonably acceptable to Mortgagee showing the payment of any other such
Imposition. If by law any Imposition, at Mortgagor's option, may be paid in
installments (whether or not interest shall accrue on the unpaid balance of such
Imposition), Mortgagor may elect to pay such Imposition in such installments and
shall be responsible for the payment of such installments with interest, if any.
5. Insurance. (a) Mortgagor shall maintain or cause to be maintained
on all of the Premises insurance as required by the Credit Agreement.
(b) If the Mortgaged Property, or any part thereof, shall be
destroyed or damaged by fire or any other casualty, whether insured or
uninsured, or in the event any claim is made against Mortgagor for any personal
injury, bodily injury or property damage incurred on or about the Premises,
Mortgagor shall give immediate notice thereof to Mortgagee. If the Mortgaged
Property is damaged by fire or other casualty and provided that no Event of
Default shall have occurred and be continuing, Mortgagor shall have the right to
adjust such loss, and the insurance proceeds relating to such loss may be paid
over to Mortgagor; provided that Mortgagor shall, promptly after any such
damage, repair all such material damage regardless of whether any insurance
proceeds have been received or whether such proceeds, if received, are
sufficient to pay for the costs of repair. If the Mortgaged Property is damaged
by fire or other casualty, and an Event of Default shall have occurred and be
continuing, then Mortgagor authorizes and empowers Mortgagee, at Mortgagee's
option and in Mortgagee's sole discretion, as attorney-in-fact for Mortgagor, to
make proof of loss, to adjust
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and compromise any claim under any insurance policy, to appear in and prosecute
any action arising from any policy, to collect and receive insurance proceeds
and to deduct therefrom Mortgagee's expenses incurred in the collection process.
Each insurance company concerned is hereby authorized and directed to make
payment for such loss directly to Mortgagee. Mortgagee shall have the right to
require Mortgagor to repair or restore the Mortgaged Property, and Mortgagor
hereby designates Mortgagee as its attorney-in-fact for the purpose of making
any election required or permitted under any insurance policy relating to repair
or restoration. The insurance proceeds or any part thereof received by Mortgagee
may be applied by Mortgagee toward reimbursement of all costs and expenses of
Mortgagee in collecting such proceeds, and the balance, at Mortgagee's option in
its sole and absolute discretion, to the principal (to the installments in
inverse order of maturity, if payable in installments) and interest due or to
become due under the Notes, to fulfill any other Obligation of Mortgagor, to the
restoration or repair of the property damaged, or released to Mortgagor. In the
event Mortgagee elects to release such proceeds to Mortgagor, Mortgagor shall be
obligated to use such proceeds to the extent required to restore or repair the
Mortgaged Property. Application by Mortgagee of any insurance proceeds toward
the last maturing installments of principal and interest due or to become due
under the Notes shall not excuse Mortgagor from making any regularly scheduled
payments due thereunder, nor shall such application extend or reduce the amount
of such payments.
(g) In the event of foreclosure of this Mortgage or other transfer
of title to the Mortgaged Property in extinguishment of the Indebtedness, all
right, title and interest of Mortgagor in and to any insurance policies then in
force shall pass to the purchaser or grantee and Mortgagor hereby appoints
Mortgagee its attorney-in-fact, in Mortgagor's name, to assign and transfer all
such policies and proceeds to such purchaser or grantee.
(h) Upon written notice to Mortgagor, Mortgagee after an Event of
Default shall be entitled to require Mortgagor to pay monthly in advance to
Mortgagee the equivalent of 1/12th of the estimated annual premiums due on such
insurance in which event Mortgagee shall pay the premiums on such insurance
policies. Mortgagee may commingle such funds with its own funds and Mortgagor
shall not be entitled to interest thereon.
(i) Mortgagor may maintain insurance required under this Mortgage by
means of one or more blanket insurance policies maintained by Mortgagor;
provided, however, that (A) any such policy shall specify, or Mortgagor shall
furnish to Mortgagee a written statement from the insurer so specifying, the
maximum amount of the total insurance afforded by such blanket policy that is
allocated to the Premises and the other Mortgaged Property and any sublimits in
such blanket policy applicable to the Premises and the other Mortgaged Property,
(B) each such blanket policy shall include an endorsement providing that, in
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the event of a loss resulting from an insured peril, insurance proceeds shall be
allocated to the Mortgaged Property in an amount equal to the coverages required
to be maintained by Mortgagor as provided above and (C) the protection afforded
under any such blanket policy shall be no less than that which would have been
afforded under a separate policy or policies relating only to the Mortgaged
Property.
6. Restrictions on Liens and Encumbrances. Except for the lien of
this Mortgage, the Permitted Exceptions and any Liens permitted by the terms of
the Credit Agreement, Mortgagor shall not further mortgage, nor otherwise
encumber the Mortgaged Property nor create or suffer to exist any lien, charge
or encumbrance on the Mortgaged Property, or any part thereof, whether superior
or subordinate to the lien of this Mortgage and whether recourse or
non-recourse.
7. Maintenance; No Alteration; Inspection; Utilities. (a) Mortgagor
shall maintain or cause to be maintained all the Improvements in the same
condition and repair as of the date of this Mortgage, subject to reasonable wear
and tear and shall not commit or suffer any waste of the Improvements. Mortgagor
shall repair, restore, replace or rebuild promptly any part of the Premises
which may be materially damaged or destroyed by any casualty whatsoever.
(b) Mortgagor shall pay or cause to be paid when due and payable all
utility charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon, except
such charges as Mortgagor may contest in accordance with Section 8.3 of the
Credit Agreement.
8. Condemnation/Eminent Domain. Immediately upon obtaining knowledge
of the institution of any proceedings for the condemnation of the Mortgaged
Property, or any portion thereof, Mortgagor will notify Mortgagee of the
pendency of such proceedings. If an Event of Default is continuing, Mortgagor
authorizes Mortgagee, at Mortgagee's option and in Mortgagee's sole discretion,
as attorney-in-fact for Mortgagor, to commence, appear in and prosecute, in
Mortgagee's or Mortgagor's name, any action or proceeding relating to any
condemnation of the Mortgaged Property, or any portion thereof, and to settle or
compromise any claim in connection with such condemnation. If Mortgagee elects
not to participate in such condemnation proceeding, then Mortgagor shall, at its
expense, diligently prosecute any such proceeding and shall consult with
Mortgagee, its attorneys and experts and cooperate with them in any defense of
any such proceedings. If an Event of Default is continuing, all awards and
proceeds of condemnation shall be assigned to Mortgagee to be applied in the
same manner as insurance proceeds, as provided above, and Mortgagor agrees to
execute any such assignments of all such awards as Mortgagee may request.
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9. Mortgagee's Right to Perform. If Mortgagor fails to perform any
of the covenants or agreements of Mortgagor, Mortgagee, without waiving or
releasing Mortgagor from any obligation or Event of Default under this Mortgage,
may, at any time (but shall be under no obligation to) pay or perform the same,
and the amount or cost thereof, with interest at the Default Rate, shall
immediately be due from Mortgagor to Mortgagee. To the extent that any such
amounts or costs paid by Mortgagee shall constitute payment of (i) Impositions;
(ii) premiums on insurance policies covering the Premises; (iii) reasonable
expenses incurred in upholding or enforcing the lien of this Mortgage,
including, but not limited to the expenses of any litigation to prosecute or
defend the rights and lien created by this Mortgage; (iv) costs of removal of
hazardous substances or other remediation costs related to violations of
Environmental Laws or the presence of asbestos; or (v) any amount, costs or
charge to which Mortgagee becomes subrogated, upon payment, whether under
recognized principles of law or equity, or under express statutory authority;
then, and in each such event, such amounts or costs, together with interest
thereon at the Default Rate, shall be added to the Indebtedness and shall be
secured by this Mortgage and shall be a lien on the Mortgaged Property prior to
any right, title to, interest in, or claim upon the Mortgaged Property attaching
subsequent to the lien of this Mortgage. No payment or advance of money by
Mortgagee under this Section shall be deemed or construed to cure Mortgagor's
default or waive any right or remedy of Mortgagee.
10. Leases. (a) Mortgagor shall not execute an assignment or pledge
of any Lease relating to all or any portion of the Mortgaged Property other than
in favor of Mortgagee.
(b) As to any Lease, Mortgagor shall:
(i) promptly perform all of the material provisions of the Lease on
the part of the lessor thereunder to be performed;
(ii) promptly enforce all of the material provisions of the Lease on
the part of the lessee thereunder to be performed;
(iii) appear in and defend any action or proceeding to which
Mortgagor is named as a party arising under or in any manner connected
with the Lease or the obligations of Mortgagor as lessor or of the lessee
thereunder;
(iv) exercise, within 5 business days after a request by Mortgagee,
any right to request from the lessee a certificate with respect to the
status thereof;
(v) promptly deliver to Mortgagee copies of any notices of default
which Mortgagor may at any time forward to or receive from the lessee;
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(vi) promptly deliver to Mortgagee, upon Mortgagee's request, a
fully executed counterpart of the Leases; and
(vii) promptly deliver to Mortgagee, upon Mortgagee's request, an
assignment of the Mortgagor's interest under such Lease.
(c) Mortgagor shall deliver to Mortgagee, within 10 days after a
request by Mortgagee, a written statement, certified by Mortgagor as being true,
correct and complete, containing the names of all lessees and other occupants of
the Mortgaged Property, the terms of all Leases and the spaces occupied and
rentals payable thereunder, and a list of all Leases which are then in default,
including the nature and magnitude of the default; such statement shall be
accompanied by such information as Mortgagee may reasonably request.
(d) All Leases entered into by Mortgagor after the date hereof, if
any, and all rights of any lessees thereunder shall be subject and subordinate
in all respects to the lien and provisions of this Mortgage unless Mortgagee
shall otherwise elect in writing.
(e) In the event of the enforcement by Mortgagee of any remedy under
this Mortgage, the lessee under each Lease shall, if requested by Mortgagee or
any other person succeeding to the interest of Mortgagee as a result of such
enforcement, attorn to Mortgagee or to such person and shall recognize Mortgagee
or such successor in interest as lessor under the Lease without change in the
provisions thereof; provided however, that Mortgagee or such successor in
interest shall not be: (i) bound by any payment of an installment of rent or
additional rent which may have been made more than 30 days before the due date
of such installment; (ii) liable for any previous act or omission of Mortgagor
(or its predecessors in interest); (iii) responsible for any monies owing by
Mortgagor to the credit of such lessee or subject to any credits, offsets,
claims, counterclaims, demands or defenses which the lessee may have against
Mortgagor (or its predecessors in interest); (iv) bound by any covenant to
undertake or complete any construction of the Premises or any portion thereof;
or (v) obligated to make any payment to such lessee other than any security
deposit actually delivered to Mortgagee or such successor in interest. Each
lessee or other occupant, upon request by Mortgagee or such successor in
interest, shall execute and deliver an instrument or instruments confirming such
attornment. In addition, Mortgagor agrees that each Lease entered into after the
date of this Mortgage shall include language to the effect of subsections (d)
and (e) of this Section; provided that the provisions of such subsections shall
be self-operative and any failure of any Lease to include such language shall
not impair the binding effect of such provisions on any lessee under such Lease.
(f) Mortgagee agrees that upon request by a lessee,
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Mortgagee shall execute and deliver to such lessee a Nondisturbance,
Subordination and Attornment Agreement in form and substance acceptable to
Mortgagee. Mortgagor shall pay all of Mortgagee's reasonable legal fees and
expenses related to the preparation and negotiation of such agreement.
11. Events of Default. The occurrence of an Event of Default under
the Credit Agreement shall constitute an Event of Default hereunder.
12. Remedies.
(a) Upon the occurrence of any Event of Default, in addition to any
other rights and remedies Mortgagee may have pursuant to the Loan Documents, or
as provided by law, and without limitation, (a) if such event is an Event of
Default specified in clause (i) or (ii) of subsection 10(f) of the Credit
Agreement, automatically the Indebtedness and all other amounts owing under the
Notes, this Mortgage and the other Security Documents immediately shall become
due and payable, and (b) if such event is any other Event of Default, by notice
to Mortgagor, Mortgagee may declare the Indebtedness (together with accrued
interest thereon) and all other amounts payable under the Notes, this Mortgage
and the other Security Documents to be immediately due and payable. Except as
expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived. In addition, upon the
occurrence of any Event of Default, Mortgagee may immediately take such action,
without notice or demand, as it deems advisable to protect and enforce its
rights against Mortgagor and in and to the Mortgaged Property, including, but
not limited to, the following actions, each of which may be pursued concurrently
or otherwise, at such time and in such manner as Mortgagee may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law, (A)
institute and maintain an action of mortgage foreclosure against all or
any part of the Mortgaged Property, (B) institute and maintain an action
on the Notes, (C) sell all or part of the Mortgaged Property (Mortgagor
expressly granting to Mortgagee the power of sale), or (D) take such other
action at law or in equity for the enforcement of this Mortgage or any of
the Loan Documents as the law may allow. Mortgagee may proceed in any such
action to final judgment and execution thereon for all sums due hereunder,
together with interest thereon at the Default Rate and all costs of suit,
including, without limitation, reasonable attorneys' fees and
disbursements. Interest at the Default Rate shall be due on any judgment
obtained by Mortgagee from the date of judgment until actual payment is
made of the full amount of the judgment.
(ii) Mortgagee may personally, or by its agents, attorneys and
employees and without regard to the adequacy
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or inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations enter into and upon the
Mortgaged Property and each and every part thereof and exclude Mortgagor
and its agents and employees therefrom without liability for trespass,
damage or otherwise (Mortgagor hereby agreeing to surrender possession of
the Mortgaged Property to Mortgagee upon demand at any such time) and use,
operate, manage, maintain and control the Mortgaged Property and every
part thereof. Following such entry and taking of possession, Mortgagee
shall be entitled, without limitation, (x) to lease all or any part or
parts of the Mortgaged Property for such periods of time and upon such
conditions as Mortgagee may, in its discretion, deem proper, (y) to
enforce, cancel or modify any Lease and (z) generally to execute, do and
perform any other act, deed, matter or thing concerning the Mortgaged
Property as Mortgagee shall reasonably deem appropriate as fully as
Mortgagor might do.
(b) The holder of this Mortgage, in any action to foreclose it,
shall be entitled to the appointment of a receiver. In case of a foreclosure
sale, the Real Estate may be sold, at Mortgagee's election, in one parcel or in
more than one parcel and Mortgagee is specifically empowered, (without being
required to do so, and in its sole and absolute discretion) to cause successive
sales of portions of the Mortgaged Property to be held.
(c) In the event of any breach of any of the covenants, agreements,
terms or conditions contained in this Mortgage, and notwithstanding to the
contrary any exculpatory or non-recourse language which may be contained herein,
Mortgagee shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition and Mortgagee shall
have the right to invoke any equitable right or remedy as though other remedies
were not provided for in this Mortgage.
13. Right of Mortgagee to Credit Sale. Upon the occurrence of any
sale made under this Mortgage, whether made under the power of sale or by virtue
of judicial proceedings or of a judgment or decree of foreclosure and sale,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof. In
lieu of paying cash therefor, Mortgagee may make settlement for the purchase
price by crediting upon the Indebtedness or other sums secured by this Mortgage
the net sales price after deducting therefrom the expenses of sale and the cost
of the action and any other sums which Mortgagee is authorized to deduct under
this Mortgage. In such event, this Mortgage, the Notes and documents evidencing
expenditures secured hereby may be presented to the person or persons conducting
the sale in order that the amount so used or applied may be credited upon the
Indebtedness as having been paid.
14. Appointment of Receiver. If an Event of Default
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shall have occurred and be continuing, Mortgagee as a matter of right and
without notice to Mortgagor, unless otherwise required by applicable law, and
without regard to the adequacy or inadequacy of the Mortgaged Property or any
other collateral as security for the Indebtedness and Obligations or the
interest of Mortgagor therein, shall have the right to apply to any court having
jurisdiction to appoint a receiver or receivers or other manager of the
Mortgaged Property, and Mortgagor hereby irrevocably consents to such
appointment and waives notice of any application therefor (except as may be
required by law). Any such receiver or receivers shall have all the usual powers
and duties of receivers in like or similar cases and all the powers and duties
of Mortgagee in case of entry as provided in this Mortgage, including, without
limitation and to the extent permitted by law, the right to enter into leases of
all or any part of the Mortgaged Property, and shall continue as such and
exercise all such powers until the date of confirmation of sale of the Mortgaged
Property unless such receivership is sooner terminated.
15. Extension, Release, etc. To the extent permitted by applicable
law, (a) without affecting the lien or charge of this Mortgage upon any portion
of the Mortgaged Property not then or theretofore released as security for the
full amount of the Indebtedness, Mortgagee may, from time to time and without
notice, agree to (i) release any person liable for the Indebtedness, (ii) extend
the maturity or alter any of the terms of the Indebtedness or any guaranty
thereof, (iii) grant other indulgences, (iv) release or reconvey, or cause to be
released or reconveyed at any time at Mortgagee's option any parcel, portion or
all of the Mortgaged Property, (v) take or release any other or additional
security for any obligation herein mentioned, or (vi) make compositions or other
arrangements with debtors in relation thereto. If at any time this Mortgage
shall secure less than all of the principal amount of the Indebtedness, it is
expressly agreed that any repayments of the principal amount of the Indebtedness
shall not reduce the amount of the lien of this Mortgage until the lien amount
shall equal the principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this Mortgage,
Mortgagor authorizes Mortgagee at its option to foreclose the lien of this
Mortgage subject to the rights of any tenants of the Mortgaged Property. The
failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Indebtedness or
to foreclose the lien of this Mortgage.
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(d) Unless expressly provided otherwise, in the event that ownership
of this Mortgage and title to the Mortgaged Property or any estate therein shall
become vested in the same person or entity, this Mortgage shall not merge in
such title but shall continue as a valid lien on the Mortgaged Property for the
amount secured hereby.
16. Security Agreement under Uniform Commercial Code. (a) It is the
intention of the parties hereto that this Mortgage shall constitute a Security
Agreement within the meaning of the Uniform Commercial Code (the "Code") of the
State of New York. If an Event of Default shall occur under this Mortgage, then
in addition to having any other right or remedy available at law or in equity,
Mortgagee shall have the option of either (i) proceeding under the Code and
exercising such rights and remedies as may be provided to a secured party by the
Code with respect to all or any portion of the Mortgaged Property which is
personal property (including, without limitation, taking possession of and
selling such property) or (ii) treating such property as real property and
proceeding with respect to both the real and personal property constituting the
Mortgaged Property in accordance with Mortgagee's rights, powers and remedies
with respect to the real property (in which event the default provisions of the
Code shall not apply). If Mortgagee shall elect to proceed under the Code, then
five days' notice of sale of the personal property shall be deemed reasonable
notice and the reasonable expenses of retaking, holding, preparing for sale,
selling and the like incurred by Mortgagee shall include, but not be limited to,
attorneys' fees and legal expenses. At Mortgagee's request, Mortgagor shall
assemble the personal property and make it available to Mortgagee at a place
designated by Mortgagee which is reasonably convenient to both parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by law,
that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Mortgage
upon recording or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing" within the
meaning of Sections 9-313 and 9-402 of the Code; (iii) Mortgagor is the record
owner of the Real Estate; and (iv) the addresses of Mortgagor and Mortgagee are
as set forth on the first page of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time, shall
execute, acknowledge and deliver to Mortgagee one or more separate security
agreements, in form reasonably satisfactory to Mortgagee, covering all or any
part of the Mortgaged Property and will further execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, any financing
statement, affidavit, continuation statement or certificate or other document as
Mortgagee may reasonably request in order to perfect, preserve, maintain,
continue or extend the security interest under and the priority of this Mortgage
and
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such security instrument. Mortgagor further agrees to pay to Mortgagee on demand
all reasonable costs and expenses incurred by Mortgagee in connection with the
preparation, execution, recording, filing and re-filing of any such document and
all reasonable costs and expenses of any record searches for financing
statements Mortgagee shall reasonably require. If Mortgagor shall fail to
furnish any financing or continuation statement within 20 days after request by
Mortgagee, then pursuant to the provisions of the Code, Mortgagor hereby
authorizes Mortgagee, without the signature of Mortgagor, to execute and file
any such financing and continuation statements. The filing of any financing or
continuation statements in the records relating to personal property or chattels
shall not be construed as in any way impairing the right of Mortgagee to proceed
against any personal property encumbered by this Mortgage as real property, as
set forth above.
17. Assignment of Rents. Mortgagor hereby assigns to Mortgagee the
Rents as further security for the payment of the Indebtedness and performance of
the Obligations, and Mortgagor grants to Mortgagee the right to enter the
Mortgaged Property for the purpose of collecting the same and to let the
Mortgaged Property or any part thereof, and to apply the Rents on account of the
Indebtedness. The foregoing assignment and grant is present and absolute and
shall continue in effect until the Indebtedness is paid in full, but Mortgagee
hereby waives the right to enter the Mortgaged Property for the purpose of
collecting the Rents and Mortgagor shall be entitled to collect, receive, use
and retain the Rents until the occurrence of an Event of Default under this
Mortgage; such right of Mortgagor to collect, receive, use and retain the Rents
may be revoked by Mortgagee upon the occurrence of any Event of Default under
this Mortgage by giving not less than fifteen days' written notice of such
revocation to Mortgagor; in the event such notice is given, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to collect the Rents, any lease
security deposits, and shall pay monthly in advance to Mortgagee, or to any such
receiver, the fair and reasonable rental value as reasonably determined by
Mortgagee for the use and occupancy of the Mortgaged Property or of such part
thereof as may be in the possession of Mortgagor or any affiliate of Mortgagor,
and upon default in any such payment Mortgagor and any such affiliate will
vacate and surrender the possession of the Mortgaged Property to Mortgagee or to
such receiver, and in default thereof may be evicted by summary proceedings or
otherwise. Mortgagor shall not accept prepayments of installments of Rent to
become due for a period of more than one month in advance (except for security
deposits and estimated payments of percentage rent, Impositions and operating
expenses, if any). The agreement contained in this Section has been made with
reference to section 291-f of the Real Property Law of the State of New York.
18. Trust Funds. (a) Mortgagor shall receive the advances secured
hereby subject to the trust fund provisions of Section 13 of the Lien Law of the
State of New York.
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(b) All lease security deposits of the Real Estate shall be treated
as trust funds not to be commingled with any other funds of Mortgagor. Within 20
days after request by Mortgagee, Mortgagor shall furnish Mortgagee reasonably
satisfactory evidence of compliance with this subsection, together with a
statement of all lease security deposits by lessees and copies of all Leases not
previously delivered to Mortgagee, which statement shall be certified by
Mortgagor.
19. Additional Rights. (a) The clauses and covenants contained in
this Mortgage that are construed by Section 254 of the Real Property Law of the
State of New York shall be construed as provided in those sections, except that
the provisions of subsection 4 of such Section 254 shall not in any manner apply
to or construe the provisions of this Mortgage; the additional clauses and
covenants contained herein shall afford rights supplemental to and not exclusive
of the rights conferred by the clauses and covenants construed by such Section
254 and shall not impair, modify, alter or defeat such rights (except that the
provisions of this Mortgage governing insurance shall be exclusive of and shall
be in substitution for the rights which would be conferred by the clauses and
covenants construed by such subsection 4 of such Section 254), notwithstanding
that such additional clauses and covenants may relate to the same subject matter
or provide for different or additional rights in the same or similar
contingencies as the clauses and covenants construed by such Section 254; the
rights of Mortgagee arising under clauses and covenants contained in this
Mortgage shall be separate, distinct and cumulative and none of them shall be in
exclusion of the others; no act of Mortgagee shall be construed as an election
to proceed under any one provision herein to the exclusion of any other
provision, anything herein or otherwise to the contrary notwithstanding, and in
the event of any inconsistencies between the provisions of such Section 254 and
the provisions of this Mortgage, the provisions of this Mortgage shall prevail.
(b) The holder of any subordinate lien on the Mortgaged Property
shall have no right to terminate any Lease whether or not such Lease is
subordinate to this Mortgage nor shall any holder of any subordinate lien join
any tenant under any Lease in any action to foreclose the lien or modify,
interfere with, disturb or terminate the rights of any tenant under any Lease.
By recordation of this Mortgage all subordinate lienholders are subject to and
notified of this provision, and any action taken by any such lienholder contrary
to this provision shall be null and void. Upon the occurrence of any Event of
Default, Mortgagee may, in its sole discretion and without regard to the
adequacy of its security under this Mortgage, apply all or any part of any
amounts on deposit with Mortgagee under this Mortgage against all or any part of
the Indebtedness. Any such application shall not be construed to cure or waive
any Default or Event of Default or invalidate any act taken by Mortgagee on
account of such Default or Event of
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Default.
20. Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been sufficiently given or served when
delivered to Mortgagor in accordance with the terms of the Credit Agreement.
21. No Oral Modification. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the date
of this Mortgage relating to this Mortgage shall be superior to the rights of
the holder of any intervening or subordinate lien or encumbrance.
22. Partial Invalidity. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Mortgage or
in any provisions of the Indebtedness or Loan Documents, the obligations of
Mortgagor and of any other obligor under the Indebtedness or Loan Documents
shall be subject to the limitation that Mortgagee shall not charge, take or
receive, nor shall Mortgagor or any other obligor be obligated to pay to
Mortgagee, any amounts constituting interest in excess of the maximum rate
permitted by law to be charged by Mortgagee.
23. Mortgagor's Waiver of Rights. To the fullest extent permitted by
law, Mortgagor waives the benefit of all laws now existing or that may
subsequently be enacted providing for (i) any appraisement before sale of any
portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Mortgage before exercising any
other remedy granted hereunder and Mortgagor, for Mortgagor and its successors
and assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and releases
all rights of redemption, valuation, appraisement, stay of execution, notice of
election to mature or declare due the whole of the secured indebtedness and
marshalling in the event of foreclosure of the liens hereby created.
24. Remedies Not Exclusive. Mortgagee shall be entitled to enforce
payment of the Indebtedness and performance of the Obligations and to exercise
all rights and powers under
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this Mortgage or under any of the other Loan Documents or other agreement or any
laws now or hereafter in force, notwithstanding some or all of the Indebtedness
and Obligations may now or hereafter be otherwise secured, whether by mortgage,
security agreement, pledge, lien, assignment or otherwise. Neither the
acceptance of this Mortgage nor its enforcement, shall prejudice or in any
manner affect Mortgagee's right to realize upon or enforce any other security
now or hereafter held by Mortgagee, it being agreed that Mortgagee shall be
entitled to enforce this Mortgage and any other security now or hereafter held
by Mortgagee in such order and manner as Mortgagee may determine in its absolute
discretion. No remedy herein conferred upon or reserved to Mortgagee is intended
to be exclusive of any other remedy herein or by law provided or permitted, but
each shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Loan Documents to Mortgagee or to which it
may otherwise be entitled, may be exercised, concurrently or independently, from
time to time and as often as may be deemed expedient by Mortgagee. In no event
shall Mortgagee, in the exercise of the remedies provided in this Mortgage
(including, without limitation, in connection with the assignment of Rents to
Mortgagee, or the appointment of a receiver and the entry of such receiver on to
all or any part of the Mortgaged Property), be deemed a "mortgagee in
possession," and Mortgagee shall not in any way be made liable for any act,
either of commission or omission, in connection with the exercise of such
remedies.
25. Multiple Security. If (a) the Premises shall consist of one or
more parcels, whether or not contiguous and whether or not located in the same
county, or (b) in addition to this Mortgage, Mortgagee shall now or hereafter
hold one or more additional mortgages, liens, deeds of trust or other security
(directly or indirectly) for the Indebtedness upon other property in the State
in which the Premises are located (whether or not such property is owned by
Mortgagor or by others) or (c) both the circumstances described in clauses (a)
and (b) shall be true, then to the fullest extent permitted by law, Mortgagee
may, at its election, commence or consolidate in a single foreclosure action all
foreclosure proceedings against all such collateral securing the Indebtedness
(including the Mortgaged Property), which action may be brought or consolidated
in the courts of any county in which any of such collateral is located.
Mortgagor acknowledges that the right to maintain a consolidated foreclosure
action is a specific inducement to Mortgagee to extend the Indebtedness, and
Mortgagor expressly and irrevocably waives any objections to the commencement or
consolidation of the foreclosure proceedings in a single action and any
objections to the laying of venue or based on the grounds of forum non
conveniens which it may now or hereafter have. Mortgagor further agrees that if
Mortgagee shall be prosecuting one or more foreclosure or other proceedings
against a portion of the Mortgaged Property or against any collateral other than
the Mortgaged Property, which collateral directly or indirectly
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secures the Indebtedness, or if Mortgagee shall have obtained a judgment of
foreclosure and sale or similar judgment against such collateral, then, whether
or not such proceedings are being maintained or judgments were obtained in or
outside the State in which the Premises are located, Mortgagee may commence or
continue foreclosure proceedings and exercise its other remedies granted in this
Mortgage against all or any part of the Mortgaged Property and Mortgagor waives
any objections to the commencement or continuation of a foreclosure of this
Mortgage or exercise of any other remedies hereunder based on such other
proceedings or judgments, and waives any right to seek to dismiss, stay, remove,
transfer or consolidate either any action under this Mortgage or such other
proceedings on such basis. Neither the commencement nor continuation of
proceedings to foreclose this Mortgage nor the exercise of any other rights
hereunder nor the recovery of any judgment by Mortgagee in any such proceedings
shall prejudice, limit or preclude Mortgagee's right to commence or continue one
or more foreclosure or other proceedings or obtain a judgment against any other
collateral (either in or outside the State in which the Premises are located)
which directly or indirectly secures the Indebtedness, and Mortgagor expressly
waives any objections to the commencement of, continuation of, or entry of a
judgment in such other proceedings or exercise of any remedies in such
proceedings based upon any action or judgment connected to this Mortgage, and
Mortgagor also waives any right to seek to dismiss, stay, remove, transfer or
consolidate either such other proceedings or any action under this Mortgage on
such basis. It is expressly understood and agreed that to the fullest extent
permitted by law, Mortgagee may, at its election, cause the sale of all
collateral which is the subject of a single foreclosure action at either a
single sale or at multiple sales conducted simultaneously and take such other
measures as are appropriate in order to effect the agreement of the parties to
dispose of and administer all collateral securing the Indebtedness (directly or
indirectly) in the most economical and least time-consuming manner.
26. Expenses; Indemnification. Mortgagor shall pay or reimburse
Mortgagee for all expenses incurred by Mortgagee in the same manner as required
of Mortgagor under the terms set forth in the Credit Agreement.
27. Successors and Assigns. All covenants of Mortgagor contained in
this Mortgage are imposed solely and exclusively for the benefit of Mortgagee
and its successors and assigns, and no other person or entity shall have
standing to require compliance with such covenants or be deemed, under any
circumstances, to be a beneficiary of such covenants, any or all of which may be
freely waived in whole or in part by Mortgagee at any time if in its sole
discretion it deems such waiver advisable. All such covenants of Mortgagor shall
run with the land and bind Mortgagor, the successors and assigns of Mortgagor
(and each of them) and all subsequent owners, encumbrancers and tenants of the
Mortgaged Property, and shall inure to the benefit of Mortgagee, its successors
and assigns. The word "Mortgagor"
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shall be construed as if it read "Mortgagors" whenever the sense of this
Mortgage so requires and if there shall be more than one Mortgagor, the
obligations of the Mortgagors shall be joint and several.
28. No Waivers, etc. Any failure by Mortgagee to insist upon the
strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Mortgagee, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by Mortgagor of any and all of
the terms and provisions of this Mortgage to be performed by Mortgagor.
Mortgagee may release, regardless of consideration and without the necessity for
any notice to or consent by the holder of any subordinate lien on the Mortgaged
Property, any part of the security held for the obligations secured by this
Mortgage without, as to the remainder of the security, in anywise impairing or
affecting the lien of this Mortgage or the priority of such lien over any
subordinate lien.
29. Governing Law, etc. This Mortgage shall be governed by and
construed and interpreted in accordance with the laws of the State of New York.
Mortgagor hereby irrevocably agrees that any legal action, suit, or proceeding
against it with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Mortgage or the other Loan
Documents or for recognition or enforcement of any judgment rendered in any such
action, suit or proceeding may be brought in the United States Courts for the
Southern District of New York, or in the courts of the State of New York, as
Mortgagee may elect, and, by execution and delivery of this Mortgage, Mortgagor
hereby irrevocably accepts and submits to the non-exclusive jurisdiction of each
of the aforesaid courts in persona, generally and unconditionally with respect
to any such action, suit or proceeding for itself and in respect of its
property. Mortgagor further agrees that final judgment against it in any action,
suit, or proceeding referred to herein shall be conclusive and may be enforced
in any other jurisdiction, by suit on the judgment, a certified or exemplified
copy of which shall be conclusive evidence of the fact and of the amount of its
indebtedness.
30. Waiver of Trial by Jury. Mortgagor and Mortgagee each hereby
irrevocably and unconditionally waive trial by jury in any action, claim, suit
or proceeding relating to this Mortgage and for any counterclaim brought
therein. Mortgagor hereby waives all rights to interpose any counterclaim in any
suit brought by Mortgagee hereunder and all rights to have any such suit
consolidated with any separate suit, action or proceeding, except mandatory
counterclaims or counterclaims which would be waived unless interposed in such
suit.
31. Certain Definitions. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Mortgage shall be used
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interchangeably in singular or plural form and the word "Mortgagor" shall mean
"each Mortgagor or any subsequent owner or owners of the Mortgaged Property or
any part thereof or interest therein," the word "Mortgagee" shall mean
"Mortgagee or any subsequent holder of the Notes," the word "Notes" shall mean
"the Notes or any other evidence of indebtedness secured by this Mortgage," the
word "person" shall include any individual, corporation, partnership, trust,
unincorporated association, government, governmental authority, or other entity,
and the words "Mortgaged Property" shall include any portion of the Mortgaged
Property or interest therein. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa. The captions in this Mortgage are for convenience or reference only and
in no way limit or amplify the provisions hereof. To the extent there is any
inconsistency between the provisions of this Mortgage and the provisions of the
Credit Agreement, the provisions of the Credit Agreement shall control.
32. Nonresidential. THIS MORTGAGE DOES NOT COVER REAL PROPERTY
PRINCIPALLY IMPROVED BY ONE OR MORE STRUCTURES CONTAINING IN THE AGGREGATE NOT
MORE THAN SIX RESIDENTIAL DWELLING UNITS, EACH HAVING ITS OWN SEPARATE COOKING
FACILITIES.
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This Mortgage has been duly executed by Mortgagor on the date first
above written.
YOUNG & RUBICAM INC.
By:
-------------------------
Name:
Title:
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
: ss.:
COUNTY OF NEW YORK )
On the ____ day of December, 1996 , before me personally came
_________________ , to me known, who, being by me duly sworn, did depose and say
that [s]he resides at ___________________________________________ (insert full
address, include street address, city and state); that [s]he is a[n]
[_________________ ] President of Young & Rubicam, Inc., the corporation
described in and which executed the foregoing instrument; and that [s]he signed
[his][her] name thereto by authority of the board of directors of said
corporation.
------------------------
Notary Public
[Notarial Stamp]
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Schedule A
Description of the Premises
[Attach Legal Description of all parcels]
175
Schedule B
Permitted Exceptions
1. Covenants and Restrictions recorded in Liber 738, Page 566 of the Office
of the City Register, New York County.
2. Matters shown on a Survey made by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ dated July 6, 1954,
provided that the same do not interfere with the use of the Real Estate as
an office building.
3. Rights of tenants, as tenants only.
176
EXHIBIT F TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF PARENT BORROWER PLEDGE AGREEMENT]
PLEDGE AGREEMENT, dated as of __________________, 1996, made by
YOUNG & RUBICAM HOLDINGS INC., a New York corporation ("Y&R Holdings"), YOUNG &
RUBICAM INC., a New York corporation ("Y&R Inc. (New York)"), YOUNG & RUBICAM
INC., a Delaware corporation ("Y&R Inc. (Delaware)"), and YOUNG & RUBICAM L.P.,
a Delaware limited partnership ("Y&R LP"; collectively with Y&R Holdings, Y&R
Inc. (New York) and Y&R Inc. (Delaware), the "Parent Borrowers") in favor of
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as administrative agent (in such capacity, the "Administrative
Agent") for the several banks and other financial institutions (the "Lenders")
from time to time parties to the Credit and Guarantee Agreement, dated as of
_________________, 1996 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the Parent Borrowers, the
Subsidiary Borrowers (as defined in the Credit Agreement) from time to time
parties thereto, the Lenders, the Administrative Agent and Bank of America
International Limited, a bank organized under the laws of England, as European
Payment Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Parent Borrowers upon the
terms and subject to the conditions set forth therein;
WHEREAS, the Parent Borrowers are the legal and beneficial owners of
the shares of Pledged Stock (as hereinafter defined) issued by the Issuers (as
hereinafter defined); and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit under the Credit Agreement
that the Parent Borrowers shall have executed and delivered this Pledge
Agreement to the Administrative Agent for the ratable benefit of the Secured
Parties.
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit under the
Credit Agreement, the Parent Borrowers hereby agree with the Administrative
Agent, for the ratable benefit of the Secured Parties, as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, provided that, for purposes of this Agreement, "Lender"
shall include any Fronting Lender, Issuing Bank and any Person which is a party
to an Eligible Hedge Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Pledge Agreement, as the same may be amended,
modified or otherwise supplemented from time to time.
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"Code": the Uniform Commercial Code from time to time in effect in
the State of New York.
"Collateral": the Pledged Stock issued by the Issuers and all
Proceeds thereof.
"Collateral Account": any account established to hold money
Proceeds, maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent
for the account of the Secured Parties as provided in Section 8.
"Credit Agreement Obligations": the unpaid principal of and interest
on the Loans and the Reimbursement Obligations and all other obligations
and liabilities of the Borrowers to the Administrative Agent and the
Lenders (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
Loans and the Reimbursement Obligations and interest accruing at the then
applicable rate provided in the Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, the Credit Agreement, this Agreement, the
other Loan Documents, any Letter of Credit, any Eligible Hedge Agreement
or any other document made, delivered or given in connection therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the
Administrative Agent or any Lender that are required to be paid by any
Borrower pursuant to the terms of the Credit Agreement, this Agreement,
any other Loan Document or any Eligible Hedge Agreement).
"Designated Foreign Lender": any bank or financial institution which
(a) makes Qualified Foreign Indebtedness available to a Foreign Subsidiary
(pursuant to a commitment or otherwise) and (b) is designated as a
"Designated Foreign Lender" in accordance with Section 21.
"Domestic Issuer": any Issuer that is not a Foreign Issuer.
"Eligible Hedge Agreement": any Foreign Currency Protection
Agreement and Interest Rate Protection Agreement entered into with any
Person that is a Lender or an Affiliate of a Lender at the time of
entering into such Foreign Currency Protection Agreement or Interest Rate
Protection Agreement, as the case may be.
"Foreign Issuer": any Issuer that is a Direct Foreign Subsidiary of
a Parent Borrower.
"Issuers": the collective reference to the companies identified on
Schedule 1 attached hereto as the issuers of the Pledged Stock;
individually, each an "Issuer."
"Maximum Qualified Foreign Indebtedness Amount": as to any
Designated Foreign Lender, the amount specified as such in the notice
pursuant to which such Designated Foreign Lender is designated as a
"Designated Foreign Lender".
"Obligations": the collective reference to (a) the Credit Agreement
Obligations and (b) the unpaid principal of and interest on any Qualified
Foreign Indebtedness owed by a Foreign Subsidiary to any Designated
Foreign Lender and any obligation of such Foreign Subsidiary to
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reimburse such Designated Foreign Lender for drawings under letters of
credit issued by Designated Foreign Lender which constitute "Qualified
Foreign Indebtedness", provided that the maximum "Obligations" in respect
of the principal amount (or, in the case of letters of credit, the face
amount) of any Qualified Foreign Indebtedness owed to any Designated
Foreign Lender shall not exceed the Maximum Qualified Foreign Indebtedness
Amount for such Designated Foreign Lender.
"Pledged Stock": the shares of Capital Stock listed on Schedule 1
hereto (regardless of whether such Capital Stock is evidenced or
represented by certificates), together with all stock certificates,
options or rights of any nature whatsoever that may be issued or granted
by any Issuer to any of the Parent Borrowers while this Agreement is in
effect and while such Capital Stock continues to be subject to the
security interest granted pursuant to this Agreement.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York
on the date hereof of the Pledged Stock and, in any event, shall include,
without limitation, all dividends or other income from the Pledged Stock,
collections thereon or distributions with respect thereto.
"Qualified Foreign Indebtedness": Indebtedness which is permitted
under subsection 9.2(d) of the Credit Agreement.
"Secured Instrument": any Loan Document, Eligible Hedge Agreement or
any agreement pursuant to which Qualified Foreign Indebtedness is made
available.
"Secured Parties": the collective reference to the Lenders and any
Designated Foreign Lenders.
"Securities Act": the Securities Act of 1933, as amended.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section and
paragraph references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Pledge; Grant of Security Interest. Each Parent Borrower hereby
delivers to the Administrative Agent, for the ratable benefit of the Secured
Parties, all the Pledged Stock issued by the Domestic Issuers and all the
Pledged Stock of the Foreign Issuers which is evidenced or represented by
certificates and hereby grants to the Administrative Agent, for the ratable
benefit of the Secured Parties, a first security interest in the Collateral, as
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations. To the extent that any of the Pledged Stock of any Foreign Issuer
is not evidenced or represented by certificates, the Parent Borrowers shall take
such actions (including registrations and filings) as may be required under
applicable law in connection with and to give effect to the grant of a first
security interest therein pursuant to this Section.
3. Stock Powers. Concurrently with the delivery to the
Administrative Agent of each certificate representing one or more shares of
Pledged Stock to the Administrative Agent, the Parent Borrowers shall deliver an
undated stock power covering such certificate, duly executed in blank by the
Parent Borrowers with, if the Administrative Agent so requests, signature
guaranteed.
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4. Representations and Warranties. The Parent Borrowers represent
and warrant that:
(a) The shares of Pledged Stock constitute all the issued and
outstanding shares of all classes of the Capital Stock of each Domestic Issuer
and not less than sixty-six percent of each class of Capital Stock of each
Foreign Issuer held by the Parent Borrowers.
(b) All the shares of the Pledged Stock have been duly and validly
issued and, except as otherwise provided in Section 630 of the New York Business
Corporation Law, are fully paid and nonassessable.
(c) The Parent Borrowers are the record and beneficial owner of, and
have good and marketable title to, the Pledged Stock, free of any and all Liens
or options in favor of, or claims of, any other Person, except the security
interests created by this Agreement.
(d) Upon delivery to the Administrative Agent of the stock
certificates evidencing the Pledged Stock and the taking of the other actions
contemplated by Section 2 in respect of the Pledged Stock issued by Foreign
Issuers which is not evidenced or represented by certificates, the security
interest created by this Agreement will constitute a valid, perfected first
priority security interest in the Collateral, enforceable as such against all
creditors of the Parent Borrowers and any Persons purporting to purchase any
Collateral from the Parent Borrowers, except as affected by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
5. Covenants. The Parent Borrowers covenant and agree with the
Administrative Agent and the Lenders that, from and after the date of this
Agreement until this Agreement is terminated and the security interests created
hereby are released:
(a) If any Parent Borrower shall, as a result of its ownership of
the Pledged Stock, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate representing a stock
dividend or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights, whether in addition to, in substitution of,
as a conversion of, or in exchange for any shares of the Pledged Stock, or
otherwise in respect thereof, such Parent Borrower shall cause the same to be
subject to the security interest granted hereunder and such Parent Borrower
shall accept the same as the agent of the Administrative Agent and the Lenders,
hold the same in trust for the Administrative Agent and the Lenders and deliver
the same forthwith to the Administrative Agent in the exact form received, duly
indorsed by such Parent Borrower to the Administrative Agent, if required,
together with an undated stock power covering such certificate duly executed in
blank by such Parent Borrower and with, if the Administrative Agent so requests,
signature guaranteed, to be held by the Administrative Agent, subject to the
terms hereof, as additional collateral security for the Obligations. Other than
pursuant to a distribution or transfer of any assets of an Issuer to any Parent
Borrower in a transaction permitted under the Credit Agreement, (i) any sums
paid upon or in respect of the Pledged Stock upon the liquidation or dissolution
of any Issuer shall be paid over to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations, and (ii) in
case any distribution of capital shall be made on or in respect of the Pledged
Stock or any property shall be distributed upon or with respect to the Pledged
Stock pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Stock shall be
received by such Parent Borrower, such Parent Borrower shall, until such money
or property is paid or delivered to the Administrative Agent, hold such money or
property in trust for the Secured Parties, segregated from other funds of such
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Parent Borrower, as additional collateral security for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
the Parent Borrowers will not (i) vote to enable, or take any other action to
permit, any Issuer to issue (other than to existing stockholders on a
proportionate basis) any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Collateral, other than pursuant to a transaction
permitted under the Credit Agreement, (iii) create, incur or permit to exist any
Lien on any of the Collateral, or any interest therein, except for the security
interests created by this Agreement or (iv) enter into any agreement or
undertaking (other than this Agreement and the other Loan Documents) restricting
the right or ability of any Parent Borrower or the Administrative Agent to sell,
assign or transfer any of the Collateral.
(c) The Parent Borrowers shall maintain the security interest
created by this Agreement as a first perfected security interest and shall
defend such security interest against claims and demands of all Persons
whomsoever. At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of the Parent Borrowers, each
Parent Borrower will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purposes of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted. If
any amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement.
(d) The Parent Borrowers shall pay, and hold the Administrative
Agent and the Secured Parties harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
6. Cash Dividends; Voting Rights. Unless an Event of Default shall
have occurred and be continuing and the Administrative Agent shall have given
notice to the Parent Borrowers of the Administrative Agent's intent to exercise
its corresponding rights pursuant to Section 7 below, the Parent Borrowers shall
be permitted to receive all cash dividends paid in the normal course of business
of the Issuers consistent with past practice in respect of the Pledged Stock and
to exercise all voting and corporate rights with respect to the Pledged Stock;
provided, however, that no vote shall be cast or corporate right exercised or
other action taken which, in the Administrative Agent's reasonable judgment,
would impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
7. Rights of the Lenders and the Administrative Agent. (a) All money
Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent for the benefit of the Secured Parties in a Collateral
Account. All Proceeds while held by the Administrative Agent in a Collateral
Account (or by the Parent Borrowers in trust for the Administrative Agent and
the Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 8(a).
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the Parent Borrowers, (i) the Administrative Agent shall have the right to
receive any and all cash dividends paid in respect of the Pledged Stock and make
application thereof to the Obligations in accordance with Section 8(a), and (ii)
all shares of the Pledged
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Stock shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise (A)
all voting, corporate and other rights pertaining to such shares of the Pledged
Stock at any meeting of shareholders of any Issuer or otherwise and (B) any and
all rights of conversion, exchange, subscription and any other rights,
privileges or options pertaining to such shares of the Pledged Stock as if it
were the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by the Parent
Borrowers or the Administrative Agent of any right, privilege or option
pertaining to such shares of the Pledged Stock, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Stock with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to the Parent Borrowers to exercise
any such right, privilege or option and shall not be responsible for any failure
to do so or delay in so doing.
8. Remedies. (a) At such intervals as may be agreed upon by the
Parent Borrowers and the Administrative Agent, or, if an Event of Default shall
have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of Proceeds held in
any Collateral Account in payment of the Obligations in the following order of
priority:
First: to the Administrative Agent for any unpaid fees, expenses and
other costs of the Administrative Agent;
Second: to the Secured Parties in an amount equal to the unpaid
principal or face amount of, and unpaid interest on, and premium or fees,
if any, in respect of, the Obligations then outstanding whether or not
then due and payable, including, without limitation, the aggregate undrawn
amounts available to be drawn (assuming compliance with all conditions to
drawing) under all Letters of Credit and the aggregate estimated amount of
payment liabilities of the Parent Borrowers and the Subsidiaries under
Eligible Hedge Agreements assuming immediate termination of all such
agreements, and, if such moneys shall be insufficient to pay such amounts
in full, then ratably (without priority of any one over any other) to the
Secured Parties in proportion to the unpaid amounts thereof on the date
any such payment is made;
Third: to the Secured Parties, amounts equal to all other sums which
constitute Obligations, including without limitation the costs and
expenses of the Secured Parties and their representatives which are due
and payable under the relevant Secured Instruments and which constitute
Obligations as of the date any such payment is made, and, if such moneys
shall be insufficient to pay such sums in full, then ratably to the
Secured Parties in proportion to such sums; and
Fourth: any surplus then remaining shall be paid to the Parent
Borrowers or their successors or assigns or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may
direct.
(b) The term "unpaid" as used in clauses Second and Third of
paragraph (a) above refers:
(i) in the absence of a bankruptcy proceeding with respect to
the relevant Parent Borrower, to all amounts of Obligations, as the case
may be, outstanding as of the date a payment is made, whether or not such
amounts are fixed or contingent, and
(ii) during the pendency of a bankruptcy proceeding with
respect to the
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relevant Parent Borrower, to all amounts allowed by the bankruptcy court
in respect of Obligations as a basis for distribution (including estimated
amounts, if any, allowed in respect of contingent claims),
to the extent that prior distributions (whether actually distributed or set
aside pursuant to this Section) have not been made in respect thereof.
(c) In the event any Secured Party shall be entitled to receive any
moneys pursuant to clauses Second or Third of paragraph (a) in respect of the
unliquidated, unmatured or contingent portion of the outstanding Obligations
(including, without limitation, obligations under then outstanding Letters of
Credit), then the Administrative Agent shall hold such amount in a Collateral
Account for the benefit of such Secured Party until (i) such Secured Party shall
have notified the Administrative Agent that all or part of such unliquidated,
unmatured or contingent claim shall have become matured or fixed, in which case
the Administrative Agent shall distribute from such Collateral Account an amount
equal to such matured or fixed claim to such Secured Party for application to
the payment of such matured or fixed claim, and shall promptly give notice
thereof to the Company or (ii) all or part of such unliquidated, unmatured or
contingent claim shall have been extinguished, whether as the result of an
expiration without drawing of any Letter of Credit, payment of amounts secured
or covered by any Letter of Credit other than by drawing thereunder, payment of
amounts covered by any guarantee or otherwise, in which case such Secured Party
shall, as soon as practicable thereafter, notify the Company and the
Administrative Agent.
(d) In making the determinations and allocations required by this
Section, the Administrative Agent may conclusively rely upon information
supplied by the Administrative Agent (or the relevant Lender, in the case of
Eligible Hedge Agreements) as to the amounts payable with respect to Credit
Agreement Obligations and upon information supplied by a Designated Foreign
Lender as to the amounts payable with respect to Qualified Foreign Indebtedness,
and the Administrative Agent shall have no liability to any of the Secured
Parties for actions taken in reliance on any such information.
(e) If an Event of Default shall have occurred and be continuing,
the Administrative Agent, on behalf of the Lenders, may exercise, in addition to
all other rights and remedies granted in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured party under the Code. Without limiting the
generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Parent Borrowers or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived to the fullest extent permitted by
applicable law), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, assign, give option or options to purchase or otherwise dispose
of and deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, in the
over-the-counter market, at any exchange, broker's board or office of the
Administrative Agent or any Lender or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The
Administrative Agent or any Secured Party shall have the right upon any such
public sale or sales, and, to the fullest extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in the Parent Borrowers, which
right or equity of redemption is hereby waived or released to the extent
permitted by applicable law. The Administrative Agent shall apply any Proceeds
from time to time held by it and the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred in respect thereof or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation,
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reasonable attorneys' fees and disbursements of counsel to the Administrative
Agent, to the payment in whole or in part of the Obligations, in accordance with
paragraph (a) above, and only after such application and after the payment by
the Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to the Parent Borrowers.
To the extent permitted by applicable law, each Parent Borrower waives all
claims, damages and demands they may acquire against the Administrative Agent or
any Secured Party arising out of the exercise by them of any rights hereunder.
If any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition. Each Parent Borrower shall
remain liable for any deficiency if the proceeds of any sale or other
disposition of Collateral are insufficient to pay the Obligations and the fees
and disbursements of any attorneys employed by the Administrative Agent or any
Lender to collect such deficiency.
9. Registration Rights; Private Sales. (a) If the Administrative
Agent shall determine to exercise its right to sell any or all of the Pledged
Stock pursuant to Section hereof, and if in the opinion of the Administrative
Agent it is necessary or advisable to have the Pledged Stock, or that portion
thereof to be sold, registered under the provisions of the Securities Act, the
Parent Borrowers will cause the Issuer thereof to (i) execute and deliver, and
cause the directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) to cause the registration statement
relating thereto to become effective and to remain effective for a period of one
year from the date of the first public offering of the Pledged Stock, or that
portion thereof to be sold, and (iii) to make all amendments thereto and/or to
the related prospectus which, in the opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. The Parent Borrowers agree to cause such Issuer
to comply with the provisions of the securities or "Blue Sky" laws of any and
all jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings statement
(which need not be audited) which will satisfy the provisions of Section 11(a)
of the Securities Act.
(b) The Parent Borrowers recognize that the Administrative Agent may
be unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. The
Parent Borrowers acknowledge and agree that any such private sale may result in
prices and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agree that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) The Parent Borrowers further agree to use their best efforts to
do or cause to be done all such other acts as may be necessary to make such sale
or sales of all or any portion of the Pledged Stock pursuant to this Section
valid and binding and in compliance with any and all other applicable
Requirements of Law. The Parent Borrowers further agree that a breach of any of
the covenants contained in this Section will cause irreparable injury to the
Administrative Agent and the Secured Parties, that the Administrative Agent and
the Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section
shall be specifically enforceable against the Parent Borrowers, and the Parent
Borrowers hereby waive and agree
184
9
not to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.
10. Irrevocable Authorization and Instruction to Issuer. The Parent
Borrowers hereby authorize and instruct each Issuer to comply with any
instruction received by it from the Administrative Agent in writing that (a)
states that an Event of Default has occurred and (b) is otherwise in accordance
with the terms of this Agreement, without any other or further instructions from
the Parent Borrowers, and the Parent Borrowers agree that each Issuer shall be
fully protected in so complying.
11. Administrative Agent's Appointment as Attorney-in-Fact. (a) The
Parent Borrowers hereby irrevocably constitute and appoint the Administrative
Agent and any officer or agent of the Administrative Agent, with full power of
substitution, as their true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Parent Borrowers and in the
name of the Parent Borrowers or in the Administrative Agent's own name, from
time to time in the Administrative Agent's discretion, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, including, without
limitation, any financing statements, endorsements, assignments or other
instruments of transfer.
(b) The Parent Borrowers hereby ratify all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted in
Section 11(a). All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
12. Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar securities and property for its own account, except that the
Administrative Agent shall have no obligation to invest funds held in any
Collateral Account and may hold the same as demand deposits. Neither the
Administrative Agent, any Secured Party nor any of their respective directors,
officers, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Parent Borrowers or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
13. Execution of Financing Statements. Pursuant to Section 9-402 of
the Code, the Parent Borrowers authorize the Administrative Agent to file
financing statements with respect to the Collateral without the signature of the
Parent Borrowers in such form and in such filing offices as the Administrative
Agent reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. A carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement for
filing in any jurisdiction.
14. Authority of Administrative Agent. The Parent Borrowers
acknowledge that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Parent Borrowers, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and
neither the Parent Borrowers nor any Issuer shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
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10
15. Notices. All notices, requests and demands given hereunder shall
be given in accordance with subsection 13.2 of the Credit Agreement.
16. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
17. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None
of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except, subject to subsection 13.1 of the
Credit Agreement, by a written instrument executed by the Parent Borrowers and
the Administrative Agent.
(b) No failure to exercise and no delay in exercising, on the part
of the Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.
(c) The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
18. Section Headings. The section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
19. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Parent Borrowers, the
Administrative Agent and the Lenders, provided that the Parent Borrowers may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of the Administrative Agent and any purported
assignment without such consent shall be null and void.
20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
21. Designated Foreign Lenders. The Company may from time to time
designate certain banks or other financial institutions acceptable to the
Administrative Agent as "Designated Foreign Lenders" with respect to Qualified
Foreign Indebtedness by delivering a written notice to such effect to the
Administrative Agent in the form of Exhibit A hereto, executed by the Company
and the relevant Designated Foreign Lender and accepted by the Administrative
Agent. Each such bank or other financial institution shall thereafter be deemed
to be a Designated Foreign Lender for all purposes hereunder until such time as
the Administrative Agent shall have received written notice from the Company and
the relevant Designated Foreign Lender to such effect, at which time such
Designated Foreign Lender shall be deemed not to be a Secured Party for all
purposes hereunder and all right, title and interest of such Designated Foreign
Lender in the Collateral and the Security Documents shall terminate. No
Designated Foreign Lender shall have the right to exercise or seek to exercise
any rights or exercise any remedies with respect to any Collateral or institute
any action or proceeding with respect to such rights or remedies, including
without limitation, any action of foreclosure or contest, protest or object to
any foreclosure proceeding or action brought by the Administrative Agent or any
Lender or any other exercise by the Administrative Agent or any Lender of any
rights and remedies hereunder or under
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11
any Security Document.
22. To the extent that the shares of Pledged Stock of any Foreign
Issuer subject to the security interest granted under this Agreement exceed 66%
of any class of such Pledged Stock of any such Foreign Issuer, the security
interest in such Pledged Stock (to the extent the security interest in such
shares of Pledged Stock exceeds 66% of any class of shares of such Pledged
Stock) shall be automatically released on the day which is 90 days following the
Closing Date and any certificates evidencing or representing such released
Pledged Stock shall be returned by the Administrative Agent to the relevant
Parent Borrower.
187
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
YOUNG & RUBICAM HOLDINGS INC.
By:
-----------------------------
Title:
YOUNG & RUBICAM INC., a New York corporation
By:
-----------------------------
Title:
YOUNG & RUBICAM INC., a Delaware corporation
By:
-----------------------------
Title:
YOUNG & RUBICAM L.P.
By: YOUNG & RUBICAM INC. a New York
corporation, its General Partner
By:
-----------------------------
Title:
Schedules:
Schedule 1 - Description of Pledged Stock
188
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Pledge
Agreement dated ___________________, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Pledge Agreement"), made by Young & Rubicam
Holdings Inc., a New York corporation ("Y&R Holdings"), Young & Rubicam Inc., a
New York corporation ("Y&R Inc. (New York)"), and Young & Rubicam., a Delaware
corporation ("Y&R Inc. (Delaware)"), and Young & Rubicam L.P., a Delaware
limited partnership ("Y&R LP"; collectively with Y&R Holdings, Y&R Inc. (New
York) and Y&R Inc. (Delaware), the "Parent Borrowers") in favor of Bank of
America National Trust and Savings Association, as Administrative Agent for the
Lenders referred to in the Pledge Agreement. The undersigned agrees for the
benefit of the Administrative Agent and the Secured Parties as follows:
1. The undersigned will be bound by the terms of the Pledge
Agreement and will comply with such terms insofar as such terms are applicable
to the undersigned.
2. The undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5(a) of the
Pledge Agreement.
3. The terms of Section 9(c) of the Pledge Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
under or pursuant to or arising out of Section of the Pledge Agreement.
[NAME OF ISSUER]
By:
--------------------------------
Title:
-----------------------------
Address for Notices:
-----------------------------------
-----------------------------------
-------------------------------
Fax:
189
SCHEDULE 1
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
Issuer Class of Stock* Stock Certificate No. No. of Shares % of Shares Outstanding
------------------- --------------- --------------------- ------------- -----------------------
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL INC., PLEDGOR
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ A/S** 1-13,200; 10,000,000 100%
13,201-
20,000
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Asia Ltd.** 15,17,18 27,804 100%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Italia S.r.l.** na na na 100%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Mexico S.A. de C.V.
Series B - Variable 1 924 66%
Series B - Minimo Fijo 1 16,500 66%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Poland Sp. z.o.o. na na na 66%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Pty Ltd** 11,12 800,000 100%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ S/C Ltda. na na na 66%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Thailand Ltd. 41,42,45 33,660 66%
*CMG AG 1 1,848 66%
CYGNET HOLDINGS COMPANY INC., PLEDGOR
*BM Communications Inc. 1 1,000 100%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇/NIS, Inc. 1 1,000 100%
*Young Rubicam S.A. **** 82,992,692 66%
*Summit Insurance Company 2 10,000 100%
LANDOR ASSOCIATES, PLEDGOR
*Landor Associates Asia-Pacific Ltd. 5 660 66%
*Landor Associates Designers & Consultants, Ltd. 17 163,300 66%
*▇▇▇▇▇▇ ▇▇▇▇▇▇ Y Asociados S.A. de C.V. 6 4,620 66%
YOUNG & RUBICAM INTERNATIONAL GROUP B.V., PLEDGOR
*Young & Rubicam Denmark Group A/S*** na na na 100%
----------
* Stock is assumed to be common stock unless otherwise indicated.
** 100% of the outstanding shares of these first tier Foreign Subsidiaries
will be pledged upon closing; 90 days thereafter, the pledge will become
66% of the outstanding shares.
*** 100% of the outstanding shares will be pledged for a period of 90 days
from the closing date.
**** See certificate.
190
EXHIBIT A
[FORM OF DESIGNATED FOREIGN LENDER NOTICE]
DESIGNATED FOREIGN LENDER NOTICE
Reference is made to (a) the Security Agreement, dated as of
____________ __, 1996 (the "Parent Borrower Security Agreement"), made by Young
& Rubicam Holdings Inc., a New York corporation ("Y&R Holdings"), Young &
Rubicam Inc., a New York corporation ("Y&R Inc. (New York)"), Young & Rubicam,
Inc., a Delaware corporation ("Y&R Inc. (Delaware)"), Young & Rubicam L.P., a
Delaware limited partnership ("Y&R LP"; collectively with Y&R Holdings, Y&R Inc.
(New York) and Y&R Inc. (Delaware), the "Parent Borrowers") in favor of Bank of
America National Trust and Savings Association, a national banking association,
as Administrative Agent (in such capacity, the "Administrative Agent") for the
several banks and other financial institutions (the "Lenders") from time to time
parties to the Credit and Guarantee Agreement, dated as of December __, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Parent Borrowers, the Subsidiary Borrowers (as defined in
the Credit Agreement) from time to time parties thereto, the Lenders, the
Administrative Agent and Bank of America International Limited, a bank organized
under the laws of England, as European Payment Agent, (b) the Pledge Agreement,
dated as of _________ __, 1996 (the "Parent Borrower Pledge Agreement"), made by
the Parent Borrowers in favor of the Administrative Agent, (c) the Security
Agreement, dated as of __________ __, 1996 (the "Subsidiaries Security
Agreement"), made by each of the subsidiaries of the Parent Borrowers which are
parties thereto in favor of the Administrative Agent, and (d) the Pledge
Agreement, dated as of _________ __, 1996 (the "Subsidiaries Pledge Agreement",
and together with the Parent Borrower Security Agreement, the Parent Borrower
Pledge Agreement and the Subsidiaries Security Agreement, the "Security
Documents"), made by each of the subsidiaries of the Parent Borrowers which are
parties thereto in favor of the Administrative Agent.
The Company hereby designates [Name of Designated Foreign Lender] as
a "Designated Foreign Lender" under the Security Documents with a Maximum
Qualified Foreign Indebtedness Amount of $___________. The Company hereby
represents and warrants that the "Qualified Foreign Indebtedness" is comprised
of [include description] and that all amount outstanding in respect thereof will
be permitted under subsection 9.2(d) of the Credit Agreement.
The undersigned, [Name of Designated Foreign Lender], hereby
acknowledges and agrees that the Maximum Qualified Foreign Indebtedness Amount
with respect to the Qualified Foreign Indebtedness described herein shall be
$___________. The undersigned in its capacity as a Designated Foreign Lender
further acknowledges and agrees that (a) it shall be bound by all of the terms
and conditions of the Security Documents, (b) it shall not have the right to
exercise or seek to exercise any rights or exercise any remedies with respect to
any collateral subject to the Security Documents or institute any action or
proceeding with respect to such rights or remedies, including without
limitation, any action of foreclosure or contest, protest or object to any
foreclosure proceeding or action brought by the Administrative Agent or any
Lender or any other exercise by the Administrative Agent or any Lender of any
rights and remedies hereunder or under any Security Document, (c) it shall not
have the right to consent to any amendment, waiver or modification of any
Security Document (other than, subject to clause (d) below, any amendment,
waiver or other modification to subsection 7.3 of the Parent Borrower Security
Agreement and the Subsidiaries Security Agreement and Section 8 (other than
paragraph (e) thereof) of the Parent Borrower Pledge Agreement and the
Subsidiaries Pledge Agreement which materially adversely affects such Designated
Foreign Lender in a manner which is different to the effect of such amendment,
waiver or modification on the other Secured Parties), (d) it shall not have the
right to consent to any release of all or any portion of the Collateral by the
Administrative Agent or the Lenders,
191
2
(e) it shall not have the right to request or direct that any payment be made
under subsection 7.3 of the Parent Borrower Security Agreement or the
Subsidiaries Security Agreement or Section 8 (other than paragraph (e) thereof)
of the Parent Borrower Pledge Agreement or the Subsidiaries Pledge Agreement,
(f) neither the Administrative Agent nor any Lender shall have any liability or
obligation to the undersigned (including, without limitation, with respect to
the perfection of any lien or security interest granted pursuant to the Security
Documents) except with respect to any payment (if and when made) under
subsection 7.3 of the Parent Borrower Security Agreement or the Subsidiaries
Security Agreement or Section 8 (other than paragraph (e) thereof) of the Parent
Borrower Pledge Agreement or the Subsidiaries Pledge Agreement and (g) it has
received copies of the Credit Agreement and each of the Security Documents. All
notices to the undersigned shall be sent to [insert notice information] or to
such other address as the undersigned shall designate in writing from time to
time to the Administrative Agent and all notices shall be given in accordance
with subsection 13.2 of the Credit Agreement.
THIS NOTICE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
The undersigned hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Notice or for recognition and enforcement of any
judgment in respect thereof,to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United State of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail, (or
any substantially similar form of mail), postage prepaid, to its address for
notices hereunder;
(d) agrees that nothing herein shall affect the right to effect
service or process in any other manner permitted by law or shall limit the right
to ▇▇▇ in any other jurisdiction; and
192
3
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
[NAME OF DESIGNATED FOREIGN
LENDER]
By:
-----------------------
Name:
[THE COMPANY]
By:
-----------------------
Title
Accepted:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Administrative Agent
By:
-------------------------
Title:
193
EXHIBIT G TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF PARENT BORROWER SECURITY AGREEMENT]
SECURITY AGREEMENT, dated as of __________________, 1996, made by
YOUNG & RUBICAM HOLDINGS INC., a New York corporation ("Y&R Holdings"), YOUNG &
RUBICAM INC., a New York corporation ("Y&R Inc. (New York)"), YOUNG & RUBICAM
INC., a Delaware corporation ("Y&R Inc. (Delaware)"), and YOUNG & RUBICAM L.P.,
a Delaware limited partnership ("Y&R LP"; collectively with Y&R Holdings, Y&R
Inc. (New York) and Y&R Inc. (Delaware), the "Parent Borrowers"), in favor of
Bank of America National Trust and Savings Association, a national banking
association, as Administrative Agent (in such capacity, the "Administrative
Agent") for the several banks and other financial institutions (the "Lenders")
from time to time parties to the Credit and Guarantee Agreement, dated as of
December __, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Parent Borrowers, the Subsidiary
Borrowers (as defined in the Credit Agreement) from time to time parties
thereto, the Lenders, the Administrative Agent and Bank of America International
Limited, a bank organized under the laws of England, as European Payment Agent.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Parent Borrowers upon the
terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit under the Credit Agreement
that the Parent Borrowers shall have executed and delivered this Security
Agreement to the Administrative Agent for the ratable benefit of the Secured
Parties.
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit under the
Credit Agreement, the Parent Borrowers hereby agree with the Administrative
Agent, for the ratable benefit of the Secured Parties, as follows:
1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Credit Agreement and used herein are so used as so defined,
provided that, for purposes of this Agreement, "Lender" shall include any
Fronting Lender, Issuing Bank and any Person which is a party to an Eligible
Hedge Agreement; the following terms which are defined in the Uniform Commercial
Code in effect in the State of New York on the date hereof are used herein as so
defined: Accounts, Chattel Paper, Documents, Equipment, Farm Products, General
Intangibles, Instruments, Inventory and Proceeds; and the following terms shall
have the following meanings:
"Code": the Uniform Commercial Code as from time to time in effect
in the State of New York.
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2
"Collateral": as defined in Section 2.
"Collateral Account": any account established to hold money
proceeds, maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent
for the account of the Secured Parties as provided in Section 8.
"Copyright License": any agreement, written or oral, providing for
the grant by or to the Parent Borrowers of any right under any Copyright,
including, without limitation, any thereof listed in Schedule 1 hereto.
"Copyrights": all of the following to the extent that any Parent
Borrower now or hereafter has any right, title or interest in any country
in the world (other than any such right, title or interest (a) created by
any Parent Borrower as a work-made-for-hire on behalf of any Client, (b)
acquired on behalf of any Client or (c) required to be transferred or
otherwise conveyed to any Client): (i) all copyrights in all works,
whether published or unpublished, now existing or hereafter created or
acquired, all registrations and recordings thereof, and all applications
in the United States Copyright Office, including, without limitation, any
thereof referred to in Schedule 1 hereto, and (ii) all renewals thereof.
"Credit Agreement Obligations": the unpaid principal of and interest
on the Loans and the Reimbursement Obligations and all other obligations
and liabilities of the Borrowers to the Administrative Agent and the
Lenders (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
Loans and the Reimbursement Obligations and interest accruing at the then
applicable rate provided in the Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, the Credit Agreement, this Agreement, the
other Loan Documents, any Letter of Credit, any Eligible Hedge Agreement
or any other document made, delivered or given in connection therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the
Administrative Agent or any Lender that are required to be paid by any
Borrower pursuant to the terms of the Credit Agreement, this Agreement,
any other Loan Document or any Eligible Hedge Agreement).
"Designated Foreign Lender": any bank or financial institution which
(a) makes Qualified Foreign Indebtedness available to a Foreign Subsidiary
(pursuant to a commitment or otherwise) and (b) is designated as a
"Designated Foreign Lender" in accordance with Section 20.
"Eligible Hedge Agreement": any Foreign Currency Protection
Agreement and Interest Rate Protection Agreement entered into with any
Person that is a Lender or an Affiliate of a Lender at the time of
entering into such Foreign Currency Protection Agreement or Interest Rate
Protection Agreement, as the case may be.
"Maximum Qualified Foreign Indebtedness Amount": as to any
Designated Foreign Lender, the amount specified as such in the notice
pursuant to which such Designated Foreign Lender is designated as a
"Designated Foreign Lender".
"Obligations": the collective reference to (a) the Credit Agreement
Obligations and (b) the unpaid principal of and interest on any Qualified
Foreign Indebtedness owed by a Foreign
195
3
Subsidiary to any Designated Foreign Lender and any obligation of such
Foreign Subsidiary to reimburse such Designated Foreign Lender for
drawings under letters of credit issued by Designated Foreign Lender which
constitute "Qualified Foreign Indebtedness", provided that the maximum
"Obligations" in respect of the principal amount (or, in the case of
letters of credit, the face amount) of any Qualified Foreign Indebtedness
owed to any Designated Foreign Lender shall not exceed the Maximum
Qualified Foreign Indebtedness Amount for such Designated Foreign Lender.
"Patent License": all agreements, whether written or oral, providing
for the grant by or to any Parent Borrower of any right to manufacture,
use or sell any invention covered by a Patent.
"Patents": (a) all letters patent of the United States and all
reissues and extensions thereof, and (b) all applications for letters
patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof.
"Qualified Foreign Indebtedness": Indebtedness which is permitted
under subsection 9.2(d) of the Credit Agreement.
"Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Secured Instrument": any Loan Document, Eligible Hedge Agreement or
any agreement pursuant to which Qualified Foreign Indebtedness of a
Designated Foreign Lender is made available.
"Secured Parties": the collective reference to the Lenders and any
Designated Foreign Lenders.
"Security Agreement": this Security Agreement, as amended,
supplemented or otherwise modified from time to time.
"Trademark License": any agreement, written or oral, providing for
the grant by or to any Parent Borrower of any right to use any Trademark,
including, without limitation, any thereof listed on Schedule 2 hereto.
"Trademarks": all of the following to the extent that any Parent
Borrower now or hereafter has any right, title or interest (other than any
such right title or interest (a) created by any Parent Borrower as a
work-made-for-hire on behalf of any Client, (b) acquired on behalf of any
Client or (c) required to be transferred or otherwise conveyed to any
Client) (i) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade dress, trade styles,
service marks, designs, logos and other source or business identifiers,
and the goodwill of the business associated therewith, including customer
lists, license rights, advertising materials and all other business assets
which uniquely reflect the goodwill of the business, now existing or
hereafter adopted or acquired, all registrations and recordings thereof,
and all applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, or any State thereof, or any other Country, including,
without limitation, any thereof listed on Schedule 2 hereto, and (ii) all
renewals thereof.
2. Grant of Security Interest. As collateral security for the prompt
and complete
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4
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, each Parent Borrower hereby
grants to the Administrative Agent for the ratable benefit of the Secured
Parties a security interest in all of the following property now owned or at any
time hereafter acquired by such Parent Borrower or in which such Parent Borrower
now has or at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"):
(a) all Accounts and Receivables;
(b) all Chattel Paper;
(c) all Copyrights;
(d) all Copyright Licenses;
(e) all Documents;
(f) all Equipment;
(g) all General Intangibles;
(h) all Instruments;
(i) all Inventory;
(j) all Patents;
(k) all Patent Licenses;
(l) all Trademarks;
(m) all Trademark Licenses;
(n) all books and records pertaining to the Collateral; and
(o) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing.
3. Representations and Warranties. Each Parent Borrower hereby
represents and warrants that:
3.1 Title; No Other Liens. Except for the security interests granted
to the Administrative Agent for the ratable benefit of the Secured Parties
pursuant to this Agreement and for Liens permitted under the Credit Agreement,
such Parent Borrower owns each item of the Collateral free and clear of any and
all Liens or claims of others. No financing statement or other public notice
with respect to all or any part of the Collateral is on file or of record in any
public office, except such as have been filed in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties, pursuant to this
Agreement.
3.2 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3, will constitute perfected security interests in the
Collateral in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, as collateral security for the Obligations and (b) are prior to
all other Liens on the
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Collateral in existence on the date hereof.
3.3 Inventory and Equipment. The Inventory and the Equipment of such
Parent Borrower are kept at the locations listed on Schedule 4.
3.4 Chief Executive Office. Such Parent Borrower's chief executive
office is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
3.5 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4. Covenants. Each Parent Borrower covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Agreement until this Agreement shall terminate and the security interests
granted hereby shall be released:
4.1 Delivery of Instruments and Chattel Paper. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement.
4.2 Maintenance of Insurance. (a) Such Parent Borrower will
maintain, with financially sound and reputable insurance companies, insurance
policies (or, to the extent consistent with prudent business practice, a program
of self-insurance with respect to) insuring its Inventory and Equipment against
loss by fire, explosion, theft and such other casualties as may be reasonably
satisfactory to the Administrative Agent and insuring such Parent Borrower, the
Administrative Agent and the Secured Parties against liability for personal
injury and property damage relating to such Inventory and Equipment, such
policies to be in such form and amounts and having such coverage as may be
reasonably satisfactory to the Administrative Agent and the Lenders, with losses
payable to such Parent Borrower, the Administrative Agent and the Secured
Parties as their respective interests may appear.
(b) All such insurance shall provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Administrative Agent of written
notice thereof, (i) name the Administrative Agent and the Secured Parties as
insured parties, (ii) include a breach of warranty clause and (iii) be
reasonably satisfactory in all other respects to the Administrative Agent.
(c) Such Parent Borrower shall deliver to the Administrative Agent
and the Lenders a report of a reputable insurance broker with respect to such
insurance during the month of in each calendar year and such supplemental
reports with respect thereto as the Administrative Agent may from time to time
reasonably request.
4.3 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Parent Borrower shall maintain the security interest
created by this Agreement as a perfected security interest having at least the
priority described in subsection 3.2 and shall defend such security interest
against the claims and demands of all Persons whomsoever.
(b) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of such Parent Borrower, such
Parent Borrower will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of
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any financing or continuation statements under the Uniform Commercial Code in
effect in any jurisdiction with respect to the security interests created
hereby.
4.4 Changes in Locations, Name, etc. Such Parent Borrower will not:
(a) permit any of its Inventory or Equipment to be kept at a
location other than those listed on Schedule 4; or
(b) change the location of its chief executive office from that
specified in subsection 3.4;
(c) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become seriously misleading;
unless, in each case, it shall have given the Administrative Agent and the
Lenders at least 30 days' prior written notice of such change and all filings
necessary in the opinion of the Administrative Agent to maintain the perfection
of the security interests granted pursuant to this Agreement shall have been
made.
4.5 Further Identification of Collateral. Such Parent Borrower will
furnish to the Administrative Agent and the Lenders from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Administrative Agent may
reasonably request, all in reasonable detail.
4.6 Notices. Such Parent Borrower will advise the Administrative
Agent and the Lenders promptly, in reasonable detail, at their respective
addresses for notices provided for in the Credit Agreement of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral; and
(b) the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5. Provisions Relating to Receivables.
5.1 Parent Borrowers Remain Liable under Receivables. Anything
herein to the contrary notwithstanding, each Parent Borrower shall remain liable
under each of its Receivables to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise to each such Receivable. Neither the
Administrative Agent nor any Secured Party shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) by reason
of or arising out of this Agreement or the receipt by the Administrative Agent
or any Secured Party of any payment relating to such Receivable pursuant hereto,
nor shall the Administrative Agent or any Secured Party be obligated in any
manner to perform any of the obligations of any Parent Borrower under or
pursuant to any Receivable (or any agreement giving rise thereto), to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party under
any Receivable (or any agreement giving rise thereto), to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
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5.2 Analysis of Receivables. The Administrative Agent shall have the
right to make test verifications of the Receivables of the Parent Borrowers in
any manner and through any medium that it reasonably considers advisable, and
each Parent Borrower shall furnish all such assistance and information as the
Administrative Agent may require in connection with such test verifications. At
any time and from time to time, upon the Administrative Agent's request and at
the expense of the Parent Borrowers, each Parent Borrower shall cause
independent public accountants or others satisfactory to the Administrative
Agent to furnish to the Administrative Agent reports showing reconciliations,
aging and test verifications of, and trial balances for, its Receivables. The
Administrative Agent in its own name or in the name of others, may at any time
after the occurrence and during the continuance of an Event of Default,
communicate with the obligors on the Receivables of the Parent Borrowers to
verify with them to the Administrative Agent's satisfaction the existence,
amount and terms of any Receivables of the Parent Borrowers.
5.3 Collections on Receivables. (a) The Administrative Agent hereby
authorizes each Parent Borrower to collect its Receivables, subject to the
Administrative Agent's direction and control, and the Administrative Agent may
curtail or terminate said authority at any time after the occurrence and during
the continuance of an Event of Default. If required by the Administrative Agent
at any time after the occurrence and during the continuance of an Event of
Default, any payments of Receivables of the Parent Borrowers, when collected by
any Parent Borrower, shall be forthwith (and, in any event, within two Business
Days) deposited by such Parent Borrower in the exact form received, duly
indorsed by such Parent Borrower to the Administrative Agent if required, in a
Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Lenders only as provided in subsection 7.3, and until so turned
over, shall be held by such Parent Borrower in trust for the Administrative
Agent and the Lenders, segregated from other funds of such Parent Borrower.
(b) Each such deposit of Proceeds of Receivables shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.
(c) At the Administrative Agent's request, each Parent Borrower
shall deliver to the Administrative Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise to
its Receivables, including, without limitation, all original orders, invoices
and shipping receipts.
5.4 Representations and Warranties. Each Parent Borrower hereby
represents and warrants that:
(a) No amount payable to such Parent Borrower under or in connection
with any of its Receivables is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent.
(b) The amounts represented by such Parent Borrower to the Lenders
from time to time as owing to such Parent Borrower in respect of its Receivables
will at such times be accurate.
5.5 Covenants. Each Parent Borrower covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Agreement until this Agreement shall terminate and the security interests
granted pursuant to this Agreement shall be released:
(a) Other than in the ordinary course of business consistent with
its past practice, such Parent Borrower will not (i) grant any extension of the
time of payment of any of its Receivables, (ii) compromise or settle any of its
Receivables for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any of its Receivables, (iv)
allow any credit or discount
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whatsoever on any of its Receivables, (v) amend, supplement or modify any of its
Receivables in any manner that could adversely affect the value thereof or (vi)
fail to exercise promptly and diligently each and every material right which it
may have under each agreement giving rise to a Receivable (other than any right
of termination).
(b) Such Parent Borrower will deliver to the Administrative Agent a
copy of each material demand, notice or document received by it that questions
the validity or enforceability of more than 5% of the aggregate amount of its
then outstanding Receivables.
6. Provisions Relating to Copyrights, Patents and Trademarks.
6.1 Representations and Warranties. Each Parent Borrower hereby
represents and warrants that:
(a) Schedule 1 includes all material Copyrights and Copyright
Licenses owned by such Parent Borrower in its own name on the date hereof.
(b) Schedule 2 includes all material Trademarks and Trademark
Licenses owned by such Parent Borrower in its own name on the date hereof.
(c) To the best of such Parent Borrower's knowledge, each of its
material Copyrights and Trademarks is on the date hereof valid, subsisting,
unexpired, enforceable and has not been abandoned.
(d) Except as set forth in either Schedule 1 or Schedule 2, none of
such Copyrights and Trademarks is on the date hereof the subject of any
licensing or franchise agreement.
(e) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of any
Copyright or Trademark in any respect that could reasonably be expected to have
a Material Adverse Effect.
(f) Such Parent Borrower does not own any Patent or Patent License
which is material to its business.
(g) No action or proceeding is pending on the date hereof (i)
seeking to limit, cancel or question the validity of any material Copyright or
Trademark, or (ii) which, if adversely determined, would have a material adverse
effect on the value of any material Copyright or Trademark.
6.2 Covenants. Each Parent Borrower covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Agreement until this Agreement shall terminate and the security interests
granted pursuant to this Agreement shall be released:
(a) Such Parent Borrower (either itself or through licensees) will
(i) continue to use each material Trademark consistent with past practice in
order to maintain such Trademark in full force free from any claim of
abandonment for non-use, maintain as in the past the quality of products and
services offered under such Trademark, employ such Trademark with the
appropriate notice of registration, not adopt or use any ▇▇▇▇ which is
confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent, for the ratable benefit of the Secured Parties, shall
obtain a perfected security interest in such ▇▇▇▇ pursuant to this Agreement,
and not (and not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby such Trademark may become invalidated.
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(b) Each Parent Borrower will notify the Administrative Agent and
the Lenders immediately if it knows, or has reason to know, that any application
or registration relating to any material Copyright or Trademark may become
abandoned or dedicated, or of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Trademark Office or any
court or tribunal in any country) regarding such Parent Borrower's ownership of
any material Copyright or Trademark or its right to register the same or to keep
and maintain the same.
(c) Whenever such Parent Borrower, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any material Copyright or Trademark with the United States
Patent and Trademark Office or any similar office or agency in any other country
or any political subdivision thereof, each Parent Borrower shall report such
filing to the Administrative Agent and the Lenders within five Business Days
after the last day of the fiscal quarter in which such filing occurs. Upon
request of the Administrative Agent, each Parent Borrower shall execute and
deliver any and all agreements, instruments, documents, and papers as the
Administrative Agent may request to evidence the Administrative Agent's and the
Secured Parties' security interest in any material Copyright or Trademark and
the goodwill and general intangibles of such Parent Borrower relating thereto or
represented thereby.
(d) Each Parent Borrower will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United States
Patent and Trademark Office, or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the material Copyrights and Trademarks, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability.
(e) In the event that any material Copyright or Trademark is
infringed, misappropriated or diluted by a third party, each Parent Borrower
shall (i) take such actions as such Parent Borrower shall reasonably deem
appropriate under the circumstances to protect such Copyright or Trademark, (ii)
promptly notify the Administrative Agent and the Lenders after it learns thereof
and (iii) if deemed appropriate by such Parent Borrower, ▇▇▇ for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover damages for such infringement, misappropriation or dilution.
7. Remedies.
7.1 Notice to Obligors and Contract Parties. Upon the request of the
Administrative Agent at any time after the occurrence and during the continuance
of an Event of Default, each Parent Borrower shall notify obligors on its
Receivables that such Receivables have been assigned to the Administrative Agent
for the ratable benefit of the Secured Parties and that payments in respect
thereof shall be made directly to the Administrative Agent.
7.2 Proceeds to be Turned Over To Administrative Agent. In addition
to the rights of the Administrative Agent and the Lenders specified in
subsection with respect to payments of Receivables, if an Event of Default shall
occur and be continuing all Proceeds received by any Parent Borrower consisting
of cash, checks and other near-cash items shall be held by such Parent Borrower
in trust for the Administrative Agent and the Lenders, segregated from other
funds of such Parent Borrower, and shall, forthwith upon receipt by such Parent
Borrower, be turned over to the Administrative Agent in the exact form received
by such Parent Borrower (duly indorsed by such Parent Borrower to the
Administrative Agent, if required) and held by the Administrative Agent in a
Collateral Account maintained under the sole dominion and control of the
Administrative Agent. All Proceeds while held by the Administrative Agent in a
Collateral Account (or by such Parent Borrower in trust for
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the Administrative Agent and the Lenders) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in subsection 7.3.
7.3 Application of Proceeds. (a) At such intervals as may be agreed
upon by the Parent Borrowers and the Administrative Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the Administrative
Agent's election, the Administrative Agent may apply all or any part of Proceeds
held in any Collateral Account in payment of the Obligations in the following
order of priority:
First: to the Administrative Agent for any unpaid fees, expenses and
other costs of the Administrative Agent;
Second: to the Secured Parties in an amount equal to the unpaid
principal or face amount of, and unpaid interest on, and premium or fees,
if any, in respect of, the Obligations then outstanding whether or not
then due and payable, including, without limitation, the aggregate undrawn
amounts available to be drawn (assuming compliance with all conditions to
drawing) under all Letters of Credit and the aggregate estimated amount of
payment liabilities of the Parent Borrowers and the Subsidiaries under
Eligible Hedge Agreements assuming immediate termination of all such
agreements, and, if such moneys shall be insufficient to pay such amounts
in full, then ratably (without priority of any one over any other) to the
Secured Parties in proportion to the unpaid amounts thereof on the date
any such payment is made;
Third: to the Secured Parties, amounts equal to all other sums which
constitute Obligations, including without limitation the costs and
expenses of the Secured Parties and their representatives which are due
and payable under the relevant Secured Instruments and which constitute
Obligations as of the date any such payment is made, and, if such moneys
shall be insufficient to pay such sums in full, then ratably to the
Secured Parties in proportion to such sums; and
Fourth: any surplus then remaining shall be paid to the Parent
Borrowers or their successors or assigns or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may
direct.
(b) The term "unpaid" as used in clauses Second and Third of
paragraph (a) above refers:
(i) in the absence of a bankruptcy proceeding with respect to
the relevant Parent Borrower, to all amounts of Obligations, as the case
may be, outstanding as of the date a payment is made, whether or not such
amounts are fixed or contingent, and
(ii) during the pendency of a bankruptcy proceeding with
respect to the relevant Parent Borrower, to all amounts allowed by the
bankruptcy court in respect of Obligations as a basis for distribution
(including estimated amounts, if any, allowed in respect of contingent
claims),
to the extent that prior distributions (whether actually distributed or set
aside pursuant to this Section) have not been made in respect thereof.
(c) In the event any Secured Party shall be entitled to receive any
moneys pursuant to clauses Second or Third of paragraph (a) in respect of the
unliquidated, unmatured or contingent portion of the outstanding Obligations
(including, without limitation, obligations under then outstanding Letters of
Credit), then the Administrative Agent shall hold such amount in a Collateral
Account for the benefit
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of such Secured Party until (i) such Secured Party shall have notified the
Administrative Agent that all or part of such unliquidated, unmatured or
contingent claim shall have become matured or fixed, in which case the
Administrative Agent shall distribute from such Collateral Account an amount
equal to such matured or fixed claim to such Secured Party for application to
the payment of such matured or fixed claim, and shall promptly give notice
thereof to the Company or (ii) all or part of such unliquidated, unmatured or
contingent claim shall have been extinguished, whether as the result of an
expiration without drawing of any Letter of Credit, payment of amounts secured
or covered by any Letter of Credit other than by drawing thereunder, payment of
amounts covered by any guarantee or otherwise, in which case such Secured Party
shall, as soon as practicable thereafter, notify the Company and the
Administrative Agent.
(d) In making the determinations and allocations required by this
Section, the Administrative Agent may conclusively rely upon information
supplied by the Administrative Agent (or the relevant Lender, in the case of
Eligible Hedge Agreements) as to the amounts payable with respect to Credit
Agreement Obligations and upon information supplied by a Designated Foreign
Lender as to the amounts payable with respect to Qualified Foreign Indebtedness,
and the Administrative Agent shall have no liability to any of the Secured
Parties for actions taken in reliance on any such information.
7.4 Code Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Secured Parties may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, the Administrative
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Parent Borrower or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Administrative Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Administrative Agent or any Secured Party shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Parent
Borrower, which right or equity is hereby waived or released. Each Parent
Borrower further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Parent Borrower's
premises or elsewhere. The Administrative Agent shall apply the net proceeds of
any action taken by it pursuant to this subsection, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as the Administrative Agent may elect, and only after such application and
after the payment by the Administrative Agent of any other amount required by
any provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Administrative Agent account for the surplus, if any, to the
Parent Borrowers. To the extent permitted by applicable law, each Parent
Borrower waives all claims, damages and demands it may acquire against the
Administrative Agent or any Lender arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.
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8. Administrative Agent's Appointment as Attorney-in-Fact;
Administrative Agent's Performance of Parent Borrower's Obligations.
8.1 Powers. Each Parent Borrower hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Parent Borrower
and in the name of such Parent Borrower or in its own name, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, such Parent Borrower hereby gives the
Administrative Agent the power and right, on behalf of such Parent Borrower,
without notice to or assent by such Parent Borrower, to do any or all of the
following:
(a) in the name of such Parent Borrower or its own name, or
otherwise, take possession of and indorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due
under any of its Receivables or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of law
or equity or otherwise deemed appropriate by the Administrative Agent for
the purpose of collecting any and all such moneys due under any of its
Receivables or with respect to any other Collateral whenever payable;
(b) in the case of any Copyright, Patent or Trademark, execute and
deliver any and all agreements, instruments, documents and papers as the
Administrative Agent may request to evidence the Administrative Agent's
and the Secured Parties' security interest in such Copyright, Patent or
Trademark and the goodwill and general intangibles of such Parent Borrower
relating thereto or represented thereby;
(c) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(d) execute, in connection with any sale provided for in subsection
7.4, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(e) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; ask or demand for, collect, receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become
due at any time in respect of or arising out of any Collateral; sign and
indorse any invoices, freight or express bills, bills of lading, storage
or warehouse receipts, drafts against debtors, assignments, verifications,
notices and other documents in connection with any of the Collateral;
commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral or
any thereof and to enforce any other right in respect of any Collateral;
defend any suit, action or proceeding brought against any Parent Borrower
with respect to any Collateral; settle, compromise or adjust any such
suit, action or proceeding and, in connection therewith, to give such
discharges or releases as the Administrative Agent may deem appropriate;
assign any Copyright, Patent or Trademark (along with the goodwill of the
business to which any such Copyright, Patent or Trademark pertains),
throughout the world for such term or terms, on such conditions, and in
such manner, as the Administrative Agent shall in its sole discretion
determine; and generally, sell, transfer, pledge and make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the
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Administrative Agent's option and the Parent Borrowers' expense, at any
time, or from time to time, all acts and things which the Administrative
Agent deems necessary to protect, preserve or realize upon the Collateral
and the Administrative Agent's and the Lenders' security interests therein
and to effect the intent of this Agreement, all as fully and effectively
as any Parent Borrower might do.
Anything in this subsection to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this subsection unless an Event of Default shall
have occurred and be continuing.
8.2 Performance by Administrative Agent of Borrower's Obligations.
If any Parent Borrower fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
8.3 Borrower's Reimbursement Obligation. The expenses of the
Administrative Agent incurred in connection with actions undertaken as provided
in this Section, together with interest thereon at a rate per annum equal to the
rate per annum at which interest would then be payable on past due Base Rate
Loans under the Credit Agreement, from the date of payment by the Administrative
Agent to the date reimbursed by the Parent Borrowers, shall be payable by the
Parent Borrowers to the Administrative Agent on demand.
8.4 Ratification; Power Coupled With An Interest. Each Parent
Borrower hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof. All powers, authorizations and agencies contained in
this Agreement are coupled with an interest and are irrevocable until this
Agreement is terminated and the security interests created hereby are released.
9. Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar property for its own account. Neither the Administrative Agent, any
Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Parent Borrower
or any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the Lenders hereunder are solely to protect the Administrative Agent's and
the Secured Parties' interests in the Collateral and shall not impose any duty
upon the Administrative Agent or any Lender to exercise any such powers. The
Administrative Agent and the Lenders shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Parent Borrower for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.
10. Execution of Financing Statements. Pursuant to Section 9-402 of
the Code, each Parent Borrower authorizes the Administrative Agent to file
financing statements with respect to the Collateral without the signature of
such Parent Borrower in such form and in such filing offices as the
Administrative Agent reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
11 Authority of Administrative Agent. Each Parent Borrower
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action
206
14
taken by the Administrative Agent or the exercise or non-exercise by the
Administrative Agent of any option, voting right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the Administrative Agent and the Secured Parties, be
governed by the Credit Agreement, this Agreement and by such other agreements
with respect thereto as may exist from time to time among them, but, as between
the Administrative Agent and the Parent Borrowers, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Secured Parties
with full and valid authority so to act or refrain from acting, and the Parent
Borrowers shall be under no obligation, or entitlement, to make any inquiry
respecting such authority.
12. Notices. All notices, requests and demands to or upon the
Administrative Agent or any Parent Borrower hereunder shall be effected in the
manner provided for in subsection 13.2 of the Credit Agreement.
13. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14. Amendments in Writing; No Waiver; Cumulative Remedies.
14.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except,
subject to subsection 13.1 of the Credit Agreement, by a written instrument
executed by the Parent Borrowers and the Administrative Agent, provided that any
provision of this Agreement imposing obligations on the Parent Borrowers may be
waived, subject to subsection 13.1 of the Credit Agreement, by the
Administrative Agent in a written instrument executed by the Administrative
Agent.
14.2 No Waiver by Course of Conduct. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to subsection 14.1), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Administrative Agent or any Lender, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Administrative Agent or such Lender would otherwise have on any
future occasion.
14.3 Remedies Cumulative. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
15. Section Headings. The Section and subsection headings used in
this Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
16. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Parent Borrowers and shall inure to the benefit of
the Administrative Agent and the Lenders and their successors and assigns.
17. Governing Law. This Agreement shall be governed by, and
construed and
207
15
interpreted in accordance with, the law of the State of New York.
18. Integration. This Agreement represents the agreement of the
Parent Borrowers and the Administrative Agent with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
19. Termination. (a) Subject to subsection 13.18 of the Credit
Agreement, this Agreement and the Liens created hereby shall terminate when all
the Credit Agreement Obligations shall have been fully and indefeasibly paid,
when no Letters of Credit shall remain outstanding and when the Commitments
shall have expired or terminated under the Credit Agreement, at which time the
Administrative Agent shall execute and deliver to the Parent Borrowers, or to
such person or persons as the Parent Borrowers shall reasonably designate, all
Uniform Commercial Code termination statements and similar documents prepared by
the Parent Borrowers at their expense which the Parent Borrowers shall
reasonably request to evidence such termination.
(b) Without limiting the foregoing, all Collateral permitted to be
sold, transferred or otherwise disposed of in accordance with the terms and
provisions of the Credit Agreement shall be sold, transferred or otherwise
disposed of free and clear of the Liens created hereby. In connection with the
foregoing, the Administrative Agent shall execute and deliver to the Parent
Borrowers, or to such Person or Persons as the Parent Borrowers shall reasonably
designate, all Uniform Commercial Code termination statements and similar
documents prepared by the Parent Borrowers at their expense which the Parent
Borrowers shall reasonably request to evidence the release of the Liens created
hereby with respect to any such Collateral.
(c) Any execution and delivery of statements or documents pursuant
to this Section 19 shall be without recourse to or representation or warranty by
the Administrative Agent.
20. Designated Foreign Lenders. The Company may from time to time
designate certain banks or other financial institutions acceptable to the
Administrative Agent as "Designated Foreign Lenders" with respect to Qualified
Foreign Indebtedness by delivering a written notice to such effect to the
Administrative Agent in the form of Exhibit A hereto, executed by the Company
and the relevant Designated Foreign Lender and accepted by the Administrative
Agent. Each such bank or other financial institution shall thereafter be deemed
to be a Designated Foreign Lender for all purposes hereunder until such time as
the Administrative Agent shall have received written notice from the Company and
the relevant Designated Foreign Lender to such effect, at which time such
Designated Foreign Lender shall be deemed not to be a Secured Party for all
purposes hereunder and all right, title and interest of such Designated Foreign
Lender in the Collateral and the Security Documents shall terminate. No
Designated Foreign Lender shall have the right to exercise or seek to exercise
any rights or exercise any remedies with respect to any Collateral or institute
any action or proceeding with respect to such rights or remedies, including
without limitation, any action of foreclosure or contest, protest or object to
any foreclosure proceeding or action brought by the Administrative Agent or any
Lender or any other exercise by the Administrative Agent or any Lender of any
rights and remedies hereunder or under any Security Document.
IN WITNESS WHEREOF, the undersigned has caused this Security
Agreement to be duly executed and delivered as of the date first above written.
YOUNG & RUBICAM HOLDINGS INC.
208
16
By:
--------------------------
Title:
YOUNG & RUBICAM INC., a New York
corporation
By:
--------------------------
Title:
YOUNG & RUBICAM INC., a Delaware
corporation
By:
--------------------------
Title:
YOUNG & RUBICAM L.P.
By: YOUNG & RUBICAM INC., a New York
corporation, its General Partner
By:
--------------------------
Title:
Schedules:
Schedule 1 - Copyrights and Copyright Licenses
Schedule 2 - Trademarks and Trademark Licenses
Schedule 3 - Filing Jurisdictions
Schedule 4 - Locations of Inventory and Equipment
209
Schedule 1
COPYRIGHTS AND COPYRIGHT LICENSES
None.
210
Schedule 2
TRADEMARKS AND TRADEMARK LICENSES
None.
211
Schedule 3
FILING JURISDICTIONS
(SUBSIDIARIES)
-----------------------------------------------------------------------------------------------------------------------------------
Debtor Name and Location of Filing Location
Chief Executive Office
-----------------------------------------------------------------------------------------------------------------------------------
Black, Kelly, Scruggs, & ▇▇▇▇▇▇ Inc., Secretary of State, New York
Delaware corporation Recorder of Deeds, District of Columbia
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ County Clerk, New York County (NY)
Tax ID: ▇▇-▇▇▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
BM Communications Inc., Secretary of State, New York
Delaware corporation Recorder of Deeds, District of Columbia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ County Clerk, New York County (NY)
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: Pending
-----------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc., Secretary of State, New York
Delaware corporation County Clerk, New York County (NY)
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇/NIS Inc., Secretary of State, New York
Delaware corporation Recorder of Deeds, District of Columbia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ County Clerk, New York County (NY)
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: Pending
-----------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ (Puerto Rico), Inc., Secretary of State, New York
Delaware corporation County Clerk, New York County (NY)
▇▇▇▇▇ ▇▇▇▇▇ ▇▇. #▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
Cygnet Holdings Inc., Secretary of State, New York
Delaware corporation County Clerk, New York County (NY)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
Landor Associates, Secretary of State, New York
California corporation Secretary of State, California
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Department of State, Florida
Tax ID: ▇▇-▇▇▇▇▇▇▇ Secretary of State, Illinois
Department of Licensing, Washington
County Clerk, New York County (NY)
-----------------------------------------------------------------------------------------------------------------------------------
212
DEBTOR NAME AND LOCATION OF
CHIEF EXECUTIVE OFFICE
---------------------------
Landor Associates International,
California corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
(Japan)
Sogo Hirakawacho Building
1-4-12, Hirakawacho
--------------------------------------------
RSBC Vestiges Inc.,
New York corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
--------------------------------------------
Y&R Far East Holdings, Inc.,
Delaware corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
--------------------------------------------
Young & Rubicam Puerto Rico, Inc.,
New York corporation
▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
--------------------------------------------
FILING LOCATION
---------------------------
Secretary of State, New York
Secretary of State, California
County Clerk, New York County (NY)
--------------------------------------------
Secretary of State, New York
County Clerk, New York County (NY)
--------------------------------------------
Secretary of State, New York
County Clerk, New York County (NY)
--------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (NY)
213
Schedule 4
LOCATIONS OF INVENTORY AND EQUIPMENT
(SUBSIDIARIES)
BLACK, KELLY, 1801 K. Street, ▇.▇.
▇▇▇▇▇▇▇ & ▇▇▇▇▇ INC. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ RSBC VESTIGES INC.
(District of Columbia)
1801 K. Street, NW ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(District of Columbia) ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇/ (New York County)
NIS INC.
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇&▇ ▇▇▇ ▇▇▇▇
INTERNATIONAL INC. ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ HOLDINGS, INC.
(New York County)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(New York County) ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (New York County)
(District of Columbia)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ YOUNG & RUBICAM
(PUERTO RICO), INC. LANDOR ASSOCIATES PUERTO RICO, INC.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇. #▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 9 ▇▇▇▇▇ Court, ▇▇▇▇▇▇▇▇
Pueblo Viejo ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Guaynabo, Puerto Rico
Guaynabo, Puerto Rico (San Francisco County) 00968
00968
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CYGNET HOLDINGS INC. (Dade County)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇) ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇▇ County)
SUMMIT INSURANCE ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(New York County)
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Washington County) (King County)
BM COMMUNICATIONS LANDOR ASSOCIATES
INC. INTERNATIONAL
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(New York County) (San Francisco County)
214
EXHIBIT A
[FORM OF DESIGNATED FOREIGN LENDER NOTICE]
DESIGNATED FOREIGN LENDER NOTICE
Reference is made to (a) the Security Agreement, dated as of
____________ __, 1996 (the "Parent Borrower Security Agreement"), made by Young
& Rubicam Holdings Inc., a New York corporation ("Y&R Holdings"), Young &
Rubicam Inc., a New York corporation ("Y&R Inc. (New York)"), Young & Rubicam,
Inc., a Delaware corporation ("Y&R Inc. (Delaware)"), Young & Rubicam L.P., a
Delaware limited partnership ("Y&R LP"; collectively with Y&R Holdings, Y&R Inc.
(New York) and Y&R Inc. (Delaware), the "Parent Borrowers") in favor of Bank of
America National Trust and Savings Association, a national banking association,
as Administrative Agent (in such capacity, the "Administrative Agent") for the
several banks and other financial institutions (the "Lenders") from time to time
parties to the Credit and Guarantee Agreement, dated as of December __, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Parent Borrowers, the Subsidiary Borrowers (as defined in
the Credit Agreement) from time to time parties thereto, the Lenders, the
Administrative Agent and Bank of America International Limited, a bank organized
under the laws of England, as European Payment Agent, (b) the Pledge Agreement,
dated as of _________ __, 1996 (the "Parent Borrower Pledge Agreement"), made by
the Parent Borrowers in favor of the Administrative Agent, (c) the Security
Agreement, dated as of __________ __, 1996 (the "Subsidiaries Security
Agreement"), made by each of the subsidiaries of the Parent Borrowers which are
parties thereto in favor of the Administrative Agent, and (d) the Pledge
Agreement, dated as of _________ __, 1996 (the "Subsidiaries Pledge Agreement",
and together with the Parent Borrower Security Agreement, the Parent Borrower
Pledge Agreement and the Subsidiaries Security Agreement, the "Security
Documents"), made by each of the subsidiaries of the Parent Borrowers which are
parties thereto in favor of the Administrative Agent.
The Company hereby designates [Name of Designated Foreign Lender] as
a "Designated Foreign Lender" under the Security Documents with a Maximum
Qualified Foreign Indebtedness Amount of $___________. The Company hereby
represents and warrants that the "Qualified Foreign Indebtedness" is comprised
of [include description] and that all amount outstanding in respect thereof will
be permitted under subsection 9.2(d) of the Credit Agreement.
The undersigned, [Name of Designated Foreign Lender], hereby
acknowledges and agrees that the Maximum Qualified Foreign Indebtedness Amount
with respect to the Qualified Foreign Indebtedness described herein shall be
$___________. The undersigned in its capacity as a Designated Foreign Lender
further acknowledges and agrees that (a) it shall be bound by all of the terms
and conditions of the Security Documents, (b) it shall not have the right to
exercise or seek to exercise any rights or exercise any remedies with respect to
any collateral subject to the Security Documents or institute any action or
proceeding with respect to such rights or remedies, including, without
limitation, any action of foreclosure or contest, protest or object to any
foreclosure proceeding or action brought by the Administrative Agent or any
Lender or any other exercise by the Administrative Agent or any Lender of any
rights and remedies hereunder or under any Security Document, (c) it shall not
have the right to consent to any amendment, waiver or modification of any
Security Document (other than, subject to clause (d) below, any amendment,
waiver or other modification to subsection 7.3 of the Parent Borrower Security
Agreement and the Subsidiaries Security Agreement and Section 8 (other than
paragraph (e) thereof) of the Parent Borrower Pledge Agreement and the
Subsidiaries Pledge Agreement which materially adversely affects such Designated
Foreign Lender in a manner which is different to the effect of such amendment,
waiver or modification on the other Secured Parties), (d) it shall not have the
right to consent to any release of all or any portion of the Collateral by the
Administrative Agent or the Lenders,
215
2
(e) it shall not have the right to request or direct that any payment be made
under subsection 7.3 of the Parent Borrower Security Agreement or the
Subsidiaries Security Agreement or Section 8 (other than paragraph (e) thereof)
of the Parent Borrower Pledge Agreement or the Subsidiaries Pledge Agreement,
(f) neither the Administrative Agent nor any Lender shall have any liability or
obligation to the undersigned (including, without limitation, with respect to
the perfection of any lien or security interest granted pursuant to the Security
Documents) except with respect to any payment (if and when made) under
subsection 7.3 of the Parent Borrower Security Agreement or the Subsidiaries
Security Agreement or Section 8 (other than paragraph (e) thereof) of the Parent
Borrower Pledge Agreement or the Subsidiaries Pledge Agreement and (g) it has
received copies of the Credit Agreement and each of the Security Documents. All
notices to the undersigned shall be sent to [insert notice information] or to
such other address as the undersigned shall designate in writing from time to
time to the Administrative Agent and all notices shall be given in accordance
with subsection 13.2 of the Credit Agreement.
THIS NOTICE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
The undersigned hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Notice or for recognition and enforcement of any
judgment in respect thereof,to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United State of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail, (or
any substantially similar form of mail), postage prepaid, to its address for
notices hereunder;
(d) agrees that nothing herein shall affect the right to effect
service or process in any other manner permitted by law or shall limit the right
to ▇▇▇ in any other jurisdiction; and
216
3
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
[NAME OF DESIGNATED FOREIGN
LENDER]
By:
---------------------------
Name:
[THE COMPANY]
By:
---------------------------
Name:
Accepted:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Administrative Agent
By:
---------------------------
Name:
Date:
-------------------------
217
EXHIBIT H TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF SUBSIDIARIES GUARANTEE]
GUARANTEE, dated as of ____, 1996, made by each of the Persons that
are signatories hereto (the "Guarantors"), in favor of Bank of America National
Trust and Savings Association, as administrative agent (in such capacity, the
"Administrative Agent") for the several banks and other financial institutions
from time to time parties to the Credit and Guarantee Agreement (the "Lenders"),
dated as of ___________, 1996 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among Young & Rubicam Holdings Inc.,
a New York corporation ("Y&R Holdings"), Young & Rubicam Inc., a New York
corporation ("Y&R Inc. (New York)"), Young & Rubicam Inc., a Delaware
corporation ("Y&R Inc. (Delaware)"), Young & Rubicam L.P., a Delaware limited
partnership ("Y&R LP"; collectively with Y&R Holdings, Y&R Inc. (New York) and
Y&R Inc. (Delaware), the "Parent Borrowers"), the Subsidiary Borrowers (as
defined in the Credit Agreement) from time to time parties thereto, the Lenders,
the Administrative Agent and Bank of America International Limited, a bank
organized under the laws of England, as European Payment Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein;
WHEREAS, each of the Guarantors is a Subsidiary (as defined in the
Credit Agreement) of the Parent Borrowers;
WHEREAS, the Borrowers and the Guarantors are engaged in related
businesses, and each Guarantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement;
and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit under the Credit Agreement
that the Guarantors shall have executed and delivered this Guarantee to the
Administrative Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the promises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit under the
Credit Agreement, each Guarantor hereby agrees with the Administrative Agent,
for the ratable benefit of the Lenders, as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, provided that, for purposes if this Guarantee, "Lender"
shall include any fronting Lender, Issuing Bank and any Person which is a party
to an Eligible Hedge Agreement .
218
2
(b) As used herein, "Eligible Hedge Agreement" means any Foreign
Currency Protection Agreement or Interest Rate Protection Agreement entered into
with any Person that is a Lender or an Affiliate of a Lender and "Obligations"
means the collective reference to the unpaid principal of and interest on the
Loans and the Reimbursement Obligations and all other obligations and
liabilities of the Borrowers to the Administrative Agent and the Lenders
(including, without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of the Loans and the
Reimbursement Obligations and interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to any Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement, the other Loan Documents, any Eligible Hedge
Agreement or any other document made, delivered or given in connection
therewith, in each case whether on account of the principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid by any
Borrower pursuant to the terms of the Credit Agreement, this Agreement, any
other Loan Document or any Eligible Hedge Agreement).
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Guarantee shall refer to this Guarantee as a
whole and not to any particular provision of this Guarantee, and section and
paragraph references are to this Guarantee unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Guarantee (a) Subject to the provisions of Section 2(b), each of
the Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantees to the Administrative Agent, for the ratable benefit of the Lenders
and their respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance by the Borrowers when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations, provided that
the liabilities under this Guarantee of each Guarantor which is a Foreign
Subsidiary shall in no event exceed the amount set forth under its signature
below as its "Maximum Guarantee Amount".
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal, state and foreign laws relating to
the insolvency of debtors.
(c) Each Guarantor further agrees to pay any and all expenses
(including, without limitation, all fees and disbursements of counsel) which may
be paid or incurred by the Administrative Agent or any Lender in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, such Guarantor under this Guarantee. This
Guarantee shall remain in full force and effect until the Obligations are paid
in full, the Commitments are terminated, and no Letter of Credit is outstanding
notwithstanding that from time to time prior thereto the Borrowers may be free
from any Obligations.
(d) Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing this Guarantee or affecting the rights and remedies of the
Administrative Agent or any Lender hereunder.
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(e) No payment or payments made by the Borrowers, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Lender from the Borrowers, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment or payments other than
payments made by such Guarantor in respect of the Obligations or payments
received or collected from such Guarantor in respect of the Obligations, remain
liable for the Obligations up to the maximum liability of such Guarantor
hereunder until the Obligations are paid in full, the Commitments are terminated
and no Letter of Credit is outstanding.
(f) Each Guarantor agrees that whenever, at any time, or from time
to time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability hereunder, it will notify the Administrative Agent in
writing that such payment is made under this Guarantee for such purpose.
3. Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder who has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section hereof. The provisions
of this Section shall in no respect limit the obligations and liabilities of any
Guarantor to the Administrative Agent and the Lenders, and each Guarantor shall
remain liable to the Administrative Agent and the Lenders for the full amount
guaranteed by such Guarantor hereunder.
4. Right of Set-off. Upon the occurrence of any Event of Default,
each Guarantor hereby irrevocably authorizes the Administrative Agent and each
Lender at any time and from time to time without notice to such Guarantor or any
other Guarantor, any such notice being expressly waived by each Guarantor, to
set-off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such Lender to or for the credit or the
account of such Guarantor, or any part thereof in such amounts as the
Administrative Agent or such Lender may elect, against and on account of the
obligations and liabilities of such Guarantor to the Administrative Agent or
such Lender hereunder and claims of every nature and description of the
Administrative Agent or such Lender against such Guarantor, in any currency,
whether arising hereunder, under the Credit Agreement, any other Loan Documents
or otherwise, as the Administrative Agent or such Lender may elect, whether or
not the Administrative Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Administrative Agent and each Lender shall notify such Guarantor
promptly of any such set-off and the application made by the Administrative
Agent or such Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the
Administrative Agent and each Lender under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which the Administrative Agent or such Lender may have.
5. No Subrogation. Notwithstanding any payment or payments made by
any of the Guarantors hereunder or any set-off or application of funds of any of
the Guarantors by any Lender, no Guarantor shall be entitled to be subrogated to
any of the rights of the Administrative Agent or any Lender against the
Borrowers or any other Guarantor or any collateral security or guarantee or
right of
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offset held by any Lender for the payment of the Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from the
Borrowers or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Administrative Agent and the Lenders
by the Parent Borrowers on account of the Obligations are paid in full, the
Commitments are terminated and no Letter of Credit is outstanding. If any amount
shall be paid to any Guarantor on account of such subrogation rights at any time
when all of the Obligations shall not have been paid in full, such amount shall
be held by such Guarantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Administrative Agent may
determine.
6. Amendments, etc. with respect to the Obligations; Waiver of
Rights. Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Administrative Agent or any Lender may be rescinded by
such party and any of the Obligations continued, and the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Lender, and the Credit Agreement, the other Loan Documents, any
Eligible Hedge Agreement and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent (or the relevant Lenders, as the
case may be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Administrative Agent or any
Lender for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Administrative Agent nor any Lender shall
have any obligation to protect, secure, perfect or insure any Lien at any time
held by it as security for the Obligations or for this Guarantee or any property
subject thereto. When making any demand hereunder against any of the Guarantors,
the Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on the Borrowers or any other Guarantor or guarantor, and
any failure by the Administrative Agent or any Lender to make any such demand or
to collect any payments from the Borrowers or any such other Guarantor or
guarantor or any release of the Borrowers or such other Guarantor or guarantor
shall not relieve any of the Guarantors in respect of which a demand or
collection is not made or any of the Guarantors not so released of their several
obligations or liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of the Administrative
Agent or any Lender against any of the Guarantors. For the purposes hereof
"demand" shall include the commencement and continuance of any legal
proceedings.
7. Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon this Guarantee or acceptance of this Guarantee, the Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Borrowers and any of the Guarantors, on
the one hand, and the Administrative Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guarantee. Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrowers or any of the Guarantors with respect to the Obligations. Each
Guarantor understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity, regularity or enforceability of the Credit Agreement, any
other Loan Document, any Eligible Hedge Agreement,
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any of the Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by any Borrower against the Administrative Agent or
any Lender, or (c) any other circumstance whatsoever (with or without notice to
or knowledge of any Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of any Borrower for the
Obligations, or of such Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent and any Lender may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the
Borrowers or any other Person or against any collateral security or guarantee
for the Obligations or any right of offset with respect thereto, and any failure
by the Administrative Agent or any Lender to pursue such other rights or
remedies or to collect any payments from the Borrowers or any such other Person
or to realize upon any such collateral security or guarantee or to exercise any
such right of offset, or any release of the Borrowers or any such other Person
or any such collateral security, guarantee or right of offset, shall not relieve
such Guarantor of any liability hereunder, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter of law,
of the Administrative Agent and the Lenders against such Guarantor. This
Guarantee shall remain in full force and effect and be binding in accordance
with and to the extent of its terms upon each Guarantor and the successors and
assigns thereof, and shall inure to the benefit of the Administrative Agent and
the Lenders, and their respective successors, indorsees, transferees and
assigns, until all the Obligations and the obligations of each Guarantor under
this Guarantee shall have been satisfied by payment in full, the Commitments
shall have been terminated and no Letter of Credit shall be outstanding,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrowers may be free from any Obligations.
8. Reinstatement. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Obligations is rescinded or must otherwise be restored or returned
by the Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Borrower or any Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, any Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
9. Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim at the office of the Administrative Agent located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
10. Representations and Warranties. Each Guarantor hereby represents
and warrants that:
(a) it is a person duly organized, validly existing and, except to
the extent the failure to be so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, in good standing under
the laws of the jurisdiction of its organization and has the power and authority
and the legal right to own and operate its property, to lease the property it
operates and to conduct the business in which it is currently engaged;
(b) it has the power and authority and the legal right to execute
and deliver, and to perform its obligations under, this Guarantee, and has taken
all necessary corporate action to authorize its execution, delivery and
performance of this Guarantee;
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(c) this Guarantee constitutes a legal, valid and binding obligation
of such Guarantor enforceable in accordance with its terms, except as affected
by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting the enforcement of creditors' rights
generally, general equitable principles and an implied covenant of good faith
and fair dealing;
(d) the execution, delivery and performance of this Guarantee will
not violate any provision of any Requirement of Law or Contractual Obligation of
such Guarantor and will not result in or require the creation or imposition of
any Lien on any of the properties or revenues of such Guarantor pursuant to any
Requirement of Law or Contractual Obligation of the Guarantor;
(e) no consent or authorization of, filing with, or other act by or
in respect of, any arbitrator or Governmental Authority and no consent of any
other Person (including, without limitation, any stockholder or creditor of such
Guarantor) is required in connection with the execution, delivery, performance,
validity or enforceability of this Guarantee;
(f) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of such
Guarantor, threatened by or against such Guarantor or against any of its
properties or revenues (i) with respect to this Guarantee or any of the
transactions contemplated hereby, or (ii) which could reasonably be expected to
have a Material Adverse Effect; and
(g) the representations and warranties contained in subsections 6.8
through 6.11 of the Credit Agreement are true and correct to the extent such
representations and warranties apply to such Guarantor.
Each Guarantor agrees that the foregoing representations and
warranties shall be deemed to have been made by such Guarantor on the date of
each extension of credit to the Parent Borrowers under the Credit Agreement on
and as of such date of extension of credit as though made hereunder on and as of
such date.
11. Covenants. Each Guarantor hereby covenants and agrees with the
Administrative Agent and each Lender that, from and after the date of this
Guarantee until the Obligations are paid in full, the Commitments are terminated
and no Letter of Credit is outstanding, such Guarantor will comply with
provisions of Sections 8 and 9 of the Credit Agreement to the extent such
provisions apply to such Guarantor.
12. Authority of Administrative Agent. Each Guarantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Guarantee with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Guarantee shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and such Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Guarantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
13. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
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when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mail, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows, or to such other address as may be hereinafter notified by the
respective parties hereto:
(a) if to the Administrative Agent, at its address or transmission
number for notices provided in subsection 13.2 of the Credit Agreement; and
(b) if to any Guarantor, at its address or transmission number for
notices set forth under its signature below.
14. Counterparts. This Guarantee may be executed by one or more of
the Guarantors on any number of separate counterparts (including by facsimile
transmission), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the counterparts of this
Guarantee signed by all the Guarantors shall be lodged with the Administrative
Agent.
15. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Integration. This Guarantee represents the agreement of each
Guarantor with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein.
17. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None
of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Guarantor and the Administrative Agent, subject to subsection 13.1 of the
Credit Agreement.
(b) No failure to exercise and no delay in exercising, on the part
of the Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy power or
privilege.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
18. Section Headings. The section headings used in this Guarantee
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
19. Successors and Assigns. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns provided
that no Guarantor may assign any of its rights or obligations under this
Guarantee without the consent of the Administrative Agent and the Required
Lenders.
20. GOVERNING LAW. THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
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CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
21. Termination. (a) Subject to Section 8, this Guarantee shall
remain in full force and effect and be binding in accordance with its terms
until all Obligations shall have been satisfied by payment in full, the
Commitments shall have been terminated and no Letter of Credit shall be
outstanding. A Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Guarantor shall be sold, transferred or
otherwise disposed of in accordance with the terms of the Credit Agreement.
(b) Subject to the second sentence of paragraph (a) of this Section,
each Guarantor which is a Foreign Subsidiary shall be automatically released
from its obligations under this Guarantee on the day which is 90 days after the
Closing Date.
22. Submission To Jurisdiction; Waivers. Each Guarantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Guarantee and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof,to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United State of America for the Southern District of
New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail, (or
any substantially similar form of mail), postage prepaid, to such Guarantor at
its address set forth under its signature below or at such other address of
which the Administrative Agent shall have been notified pursuant to Section 13;
(d) agrees that nothing herein shall affect the right to effect
service or process in any other manner permitted by law or shall limit the right
to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
23. WAIVERS OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTEE OR ANY OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY AND FOR ANY
COUNTERCLAIM THEREIN.
24. Addition of Guarantors. Subsection 8.10(b) of the Credit
Agreement requires that any Subsidiary (other than a Foreign Subsidiary or a Y&R
Agent Subsidiary) of the Borrower created or acquired after the Closing Date
become a Guarantor hereunder by executing and delivering a Supplement to this
Guarantee in the form attached hereto as Exhibit A. From and after the date any
such Subsidiary executes and delivers a Supplement to this Guarantee in the form
attached hereto as Exhibit A to the
225
9
Administrative Agent, such Subsidiary shall be deemed to be a Guarantor for all
purposes under this Guarantee.
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10
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee to be duly executed and delivered by its duly authorized officer as of
the day and year first above written.
BLACK, KELLY, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ INC.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
BM COMMUNICATIONS INC.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL INC.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
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▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇/NIS, INC.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ (PUERTO RICO) INC.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
CYGNET HOLDINGS COMPANY INC.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
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12
LANDOR ASSOCIATES
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
LANDOR ASSOCIATES INTERNATIONAL
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
RSBC VESTIGES INC.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
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13
Y&R FAR EAST HOLDINGS, INC.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
YOUNG & RUBICAM PUERTO RICO, INC.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
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YOUNG & RUBICAM GERMANY GMBH
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
Maximum Guarantee Amount: $25,000,000
YOUNG & RUBICAM FRANCE S.A.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
Maximum Guarantee Amount: $20,000,000
YOUNG & RUBICAM GROUP NETHERLANDS BV
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
Maximum Guarantee Amount: $19,000,000
▇▇▇
▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇/▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
Maximum Guarantee Amount: $6,000,000
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ HONG KONG LTD.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
Maximum Guarantee Amount: $3,000,000
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ S.A.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
Maximum Guarantee Amount: $3,000,000
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NORDSTROM & ▇▇▇▇▇ ▇▇
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
Maximum Guarantee Amount: $3,000,000
YOUNG & RUBICAM S.A.
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
Maximum Guarantee Amount: $2,000,000
WUNDERMAN CATO ▇▇▇▇▇▇▇ ▇▇
By:
----------------------------
Title
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax:
Maximum Guarantee Amount: $1,000,000
233
EXHIBIT A TO
SUBSIDIARIES GUARANTEE
[FORM OF ADDITIONAL SUBSIDIARIES SUPPLEMENT]
SUPPLEMENT, dated _______________ __, 1996 to the Guarantee, dated
as of __________ __, ____ (as amended, the "Guarantee"), made by each of the
subsidiaries of the Parent Borrowers (as defined therein) from time to time
parties thereto (collectively, the "Guarantors").
W I T N E S S E T H :
WHEREAS, the Guarantee provides that any Subsidiary of the Parent
Borrowers, although not a Guarantor thereunder at the time of the initial
execution thereof, may become a Guarantor under the Guarantee upon the delivery
to the Administrative Agent of a supplement in substantially the form of this
Supplement; and
WHEREAS, the undersigned was not a Guarantor under the Guarantee at
the time of the initial execution thereof but now desires to become a Guarantor
thereunder;
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of the
Guarantee applicable to a Guarantor thereunder and agrees that it shall,
on the date this Supplement is executed and delivered to the
Administrative Agent, become a Guarantor, for all purposes of the
Guarantee to the same extent as if originally a party thereto. Without
limiting the foregoing, subject to the provisions of Section 2(b) of the
Guarantee, the undersigned, jointly and severally with the other
Guarantors, unconditionally and irrevocably, guarantees to the
Administrative Agent, for the ratable benefit of the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrowers when due and payable
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations.
Terms defined in the Guarantee shall have their defined meanings
when used herein.
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IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.
[INSERT NAME OF SUBSIDIARY]
By:
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Title:
ACKNOWLEDGED AND AGREED AS OF
THE DATE FIRST ABOVE WRITTEN:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative Agent
By:
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Title:
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EXHIBIT I TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF SUBSIDIARIES PLEDGE AGREEMENT]
PLEDGE AGREEMENT, dated as of December ___, 1996, made by
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL INC., a Delaware corporation, CYGNET HOLDINGS
COMPANY INC., a Delaware corporation, LANDOR ASSOCIATES, a California
corporation and YOUNG & RUBICAM INTERNATIONAL GROUP B.V., a Netherlands entity
("Y&R B.V.,"; collectively, the "Pledgors"), in favor of BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association, as
administrative agent (in such capacity, the "Administrative Agent") for the
several banks and other financial institutions (the "Lenders") from time to time
parties to the Credit and Guarantee Agreement, dated as of December ___, 1996
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Pledgors, the Subsidiary Borrowers (as defined in the
Credit Agreement) from time to time parties thereto, the Lenders, the
Administrative Agent and Bank of America International Limited, a bank organized
under the laws of England, as European Payment Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein;
WHEREAS, the Pledgors are the legal and beneficial owners of the
shares of Pledged Stock (as hereinafter defined) issued by the Issuers (as
hereinafter defined);
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit under the Credit Agreement
that the Pledgors, other than Y&R B.V., shall have executed and delivered that
certain Subsidiaries Guarantee dated as of the date hereof (the "Guarantee");
WHEREAS, in satisfaction of such condition, the Pledgors, other than
Y&R B.V., have executed and delivered the Guarantee; and
WHEREAS, it is also a condition precedent to the obligation of the
Lenders to make their respective extensions of credit under the Credit Agreement
that the Pledgors shall have executed and delivered this Pledge Agreement to the
Administrative Agent for the ratable benefit of the Secured Parties and to
secure their obligations under the Guarantee and the other Loan Documents.
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit under the
Credit Agreement, the Pledgors hereby agree with the Administrative Agent, for
the ratable benefit of the Secured Parties, as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, provided that, for purposes of this Agreement, "Lender"
shall include any Fronting Lender, Issuing Bank and any Person which is a party
to an Eligible Hedge Agreement.
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(b) The following terms shall have the following meanings:
"Agreement": this Pledge Agreement, as the same may be amended,
modified or otherwise supplemented from time to time.
"Code": the Uniform Commercial Code from time to time in effect in
the State of New York.
"Collateral": the Pledged Stock issued by the Issuers and all
Proceeds thereof.
"Collateral Account": any account established to hold money
Proceeds, maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent
for the account of the Secured Parties as provided in Section 8.
"Designated Foreign Lender": any bank or financial institution which
(a) makes Qualified Foreign Indebtedness available to a Foreign Subsidiary
(pursuant to a commitment or otherwise) and (b) is designated as a
"Designated Foreign Lender" in accordance with Section 21.
"Domestic Issuer": any Issuer that is not a Foreign Issuer.
"Eligible Hedge Agreement": any Foreign Currency Protection
Agreement and Interest Rate Protection Agreement entered into with any
Person that is a Lender or an Affiliate of a Lender at the time of
entering into such Foreign Currency Protection Agreement or Interest Rate
Protection Agreement, as the case may be.
"Foreign Issuer": any Issuer that is a Direct Foreign Subsidiary of
a Pledgor.
"Guarantee Obligations": as to any Pledgor, all of the obligations
and liabilities of such Pledgor under the Guarantee.
"Issuers": the collective reference to the companies identified on
Schedule 1 attached hereto as the issuers of the Pledged Stock;
individually, each an "Issuer."
"Maximum Qualified Foreign Indebtedness Amount": as to any
Designated Foreign Lender, the amount specified as such in the notice
pursuant to which such Designated Foreign Lender is designated as a
"Designated Foreign Lender".
"Obligations": as to any Pledgor, the collective reference to (a)
the Guarantee Obligations and (b) the unpaid principal of and interest on
any Qualified Foreign Indebtedness owed by a Foreign Subsidiary to any
Designated Foreign Lender and any obligation of such Foreign Subsidiary to
reimburse such Designated Foreign Lender for drawings under letters of
credit issued by Designated Foreign Lender which constitute "Qualified
Foreign Indebtedness", provided that the maximum "Obligations" in respect
of the principal amount (or, in the case of letters of credit, the face
amount) of any Qualified Foreign Indebtedness owed to any Designated
Foreign Lender shall not exceed the Maximum Qualified Foreign Indebtedness
Amount for such Designated Foreign Lender and (c) all other obligations
and liabilities of such Pledgor under the Loan Documents to which it is a
party, provided, further, that the Guarantee Obligations of Y&R B.V. shall
be the amount which would be the "Guarantee Obligations" of Y&R B.V. if it
were a party to the Guarantee.
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"Pledged Stock": the shares of Capital Stock listed on Schedule 1
hereto (regardless of whether such Capital Stock is evidenced or
represented by certificates), together with all stock certificates,
options or rights of any nature whatsoever that may be issued or granted
by any Issuer to any of the Pledgors while this Agreement is in effect and
while such Capital Stock continues to be subject to the security interest
granted pursuant to this Agreement.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York
on the date hereof of the Pledged Stock and, in any event, shall include,
without limitation, all dividends or other income from the Pledged Stock,
collections thereon or distributions with respect thereto.
"Qualified Foreign Indebtedness": Indebtedness which is permitted
under subsection 9.2(d) of the Credit Agreement.
"Secured Instrument": any Loan Document, Eligible Hedge Agreement or
any agreement pursuant to which Qualified Foreign Indebtedness is made
available.
"Secured Parties": the collective reference to the Lenders and any
Designated Foreign Lenders.
"Securities Act": the Securities Act of 1933, as amended.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section and
paragraph references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Pledge; Grant of Security Interest. Each Pledgor hereby delivers
to the Administrative Agent, for the ratable benefit of the Secured Parties, all
the Pledged Stock issued by the Domestic Issuers and all the Pledged Stock of
the Foreign Issuers which is evidenced or represented by certificates and hereby
grants to the Administrative Agent, for the ratable benefit of the Secured
Parties, a first security interest in the Collateral, as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations. To the extent that
any of the Pledged Stock of any Foreign Issuer is not evidenced or represented
by certificates, the Pledgors shall take such actions (including registrations
and filings) as may be required under applicable law in connection with and to
give effect to the grant of a first security interest therein pursuant to this
Section.
3. Stock Powers. Concurrently with the delivery to the
Administrative Agent of each certificate representing one or more shares of
Pledged Stock to the Administrative Agent, the relevant Pledgor shall deliver an
undated stock power covering such certificate, duly executed in blank by such
Pledgor with, if the Administrative Agent so requests, signature guaranteed.
4. Representations and Warranties. Each Pledgor represents and
warrants that:
(a) The shares of Pledged Stock owned by it constitute all the
issued and outstanding shares of all classes of the Capital Stock of each
Domestic Issuer and not less than sixty-six percent of each class of Capital
Stock of each Foreign Issuer held by such Pledgor.
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(b) All the shares of the Pledged Stock owned by it have been duly
and validly issued and, except as otherwise provided in Section 630 of the New
York Business Corporation Law, are fully paid and nonassessable.
(c) Such Pledgor is the record and beneficial owner of, and have
good and marketable title to, the Pledged Stock owned by it, free of any and all
Liens or options in favor of, or claims of, any other Person, except the
security interests created by this Agreement.
(d) Upon delivery to the Administrative Agent of the stock
certificates evidencing the Pledged Stock owned by it and the taking of the
other actions contemplated by Section 2 in respect of the Pledged Stock issued
by Foreign Issuers which is not evidenced or represented by certificates, the
security interest created by this Agreement will constitute a valid, perfected
first priority security interest in its Collateral, enforceable as such against
all creditors of such Pledgor and any Persons purporting to purchase any
Collateral from such Pledgor, except as affected by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
5. Covenants. Each Pledgor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Agreement until this Agreement is terminated and the security interests created
by it hereby are released:
(a) If such Pledgor shall, as a result of its ownership of the
Pledged Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for any shares of the Pledged Stock, or otherwise in respect thereof,
such Pledgor shall cause the same to be subject to the security interest granted
hereunder and such Pledgor shall accept the same as the agent of the
Administrative Agent and the Lenders, hold the same in trust for the
Administrative Agent and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Pledgor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Pledgor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Other than pursuant to a distribution or transfer
of any assets of an Issuer to such Pledgor in a transaction permitted under the
Credit Agreement, (i) any sums paid upon or in respect of the Pledged Stock upon
the liquidation or dissolution of any Issuer shall be paid over to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and (ii) in case any distribution of capital shall
be made on or in respect of the Pledged Stock or any property shall be
distributed upon or with respect to the Pledged Stock pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall be delivered to
the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Stock shall be received by such Pledgor,
such Pledgor shall, until such money or property is paid or delivered to the
Administrative Agent, hold such money or property in trust for the Secured
Parties, segregated from other funds of such Pledgor, as additional collateral
security for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
such Pledgor will not (i) vote to enable, or take any other action to permit,
any Issuer to issue (other than to existing stockholders on a proportionate
basis) any stock or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock or other equity securities of any nature of any Issuer, (ii) sell,
assign, transfer, exchange, or otherwise dispose of,
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or grant any option with respect to, the Collateral, other than pursuant to a
transaction permitted under the Credit Agreement, (iii) create, incur or permit
to exist any Lien on any of the Collateral, or any interest therein, except for
the security interests created by this Agreement or (iv) enter into any
agreement or undertaking (other than this Agreement and the other Loan
Documents) restricting the right or ability of such Pledgor or the
Administrative Agent to sell, assign or transfer any of the Collateral.
(c) Such Pledgor shall maintain the security interest created by it
pursuant to this Agreement as a first perfected security interest and shall
defend such security interest against claims and demands of all Persons
whomsoever. At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of the Pledgors, such Pledgor will
promptly and duly execute and deliver such further instruments and documents and
take such further actions as the Administrative Agent may reasonably request for
the purposes of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted. If any amount payable under or in
connection with any of its Collateral shall be or become evidenced by any
promissory note, other instrument or chattel paper, such note, instrument or
chattel paper shall be immediately delivered to the Administrative Agent, duly
endorsed in a manner satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Agreement.
(d) Such Pledgor shall pay, and hold the Administrative Agent and
the Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
its Collateral or in connection with any of the transactions contemplated by
this Agreement.
6. Cash Dividends; Voting Rights. Unless an Event of Default shall
have occurred and be continuing and the Administrative Agent shall have given
notice to the Pledgors of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 7 below, the Pledgors shall be
permitted to receive all cash dividends paid in the normal course of business of
the Issuers consistent with past practice in respect of the Pledged Stock and to
exercise all voting and corporate rights with respect to the Pledged Stock;
provided, however, that no vote shall be cast or corporate right exercised or
other action taken which, in the Administrative Agent's reasonable judgment,
would impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, the Guarantee, this
Agreement or any other Loan Document.
7. Rights of the Lenders and the Administrative Agent. (a) All money
Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent for the benefit of the Lenders in a Collateral Account. All
Proceeds while held by the Administrative Agent in a Collateral Account (or by
any Pledgor in trust for the Administrative Agent and the Lenders) shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 8(a).
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Pledgor, (i) the Administrative Agent shall have the right to
receive any and all cash dividends paid in respect of the Pledged Stock and make
application thereof to the Obligations in accordance with Section 8(a), and (ii)
all shares of the Pledged Stock shall be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent or its nominee
may thereafter exercise (A) all voting, corporate and other rights pertaining
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to such shares of the Pledged Stock at any meeting of shareholders of any Issuer
or otherwise and (B) any and all rights of conversion, exchange, subscription
and any other rights, privileges or options pertaining to such shares of the
Pledged Stock as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Stock upon the merger, consolidation, reorganization, recapitalization or other
fundamental change in the corporate structure of any Issuer, or upon the
exercise by the Pledgors or the Administrative Agent of any right, privilege or
option pertaining to such shares of the Pledged Stock, and in connection
therewith, the right to deposit and deliver any and all of the Pledged Stock
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Administrative Agent may
determine), all without liability except to account for property actually
received by it, but the Administrative Agent shall have no duty to the Pledgors
to exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing.
8. Remedies. (a) At such intervals as may be agreed upon by the
relevant Pledgor and the Administrative Agent, or, if an Event of Default shall
have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of Proceeds held in
any Collateral Account in payment of the Obligations in the following order of
priority:
First: to the Administrative Agent for any unpaid fees, expenses and
other costs of the Administrative Agent;
Second: to the Secured Parties in an amount equal to the unpaid
principal or face amount of, and unpaid interest on, and premium or fees,
if any, in respect of, the Obligations then outstanding whether or not
then due and payable, including, without limitation, the aggregate undrawn
amounts available to be drawn (assuming compliance with all conditions to
drawing) under all Letters of Credit and the aggregate estimated amount of
payment liabilities of the Borrowers and the Subsidiaries under Eligible
Hedge Agreements assuming immediate termination of all such agreements,
and, if such moneys shall be insufficient to pay such amounts in full,
then ratably (without priority of any one over any other) to the Secured
Parties in proportion to the unpaid amounts thereof on the date any such
payment is made;
Third: to the Secured Parties, amounts equal to all other sums which
constitute Obligations, including without limitation the costs and
expenses of the Secured Parties and their representatives which are due
and payable under the relevant Secured Instruments and which constitute
Obligations as of the date any such payment is made, and, if such moneys
shall be insufficient to pay such sums in full, then ratably to the
Secured Parties in proportion to such sums; and
Fourth: any surplus then remaining shall be paid to the relevant
Pledgors or their successors or assigns or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may
direct.
(b) The term "unpaid" as used in clauses Second and Third of
paragraph (a) above refers:
(i) in the absence of a bankruptcy proceeding with respect to the
relevant Borrower, to all amounts of Obligations, as the case may be,
outstanding as of the date a payment is made, whether or not such amounts
are fixed or contingent, and
(ii) during the pendency of a bankruptcy proceeding with respect to
the relevant Borrower, to all amounts allowed by the bankruptcy court in
respect of Obligations as a basis for distribution (including estimated
amounts, if any, allowed in respect of contingent claims),
to the extent that prior distributions (whether actually distributed or set
aside pursuant to this Section) have not been made in respect thereof.
(c) In the event any Secured Party shall be entitled to receive any
moneys pursuant to
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clauses Second or Third of paragraph (a) in respect of the unliquidated,
unmatured or contingent portion of the outstanding Obligations (including,
without limitation, obligations under then outstanding Letters of Credit), then
the Administrative Agent shall hold such amount in a Collateral Account for the
benefit of such Secured Party until (i) such Secured Party shall have notified
the Administrative Agent that all or part of such unliquidated, unmatured or
contingent claim shall have become matured or fixed, in which case the
Administrative Agent shall distribute from such Collateral Account an amount
equal to such matured or fixed claim to such Secured Party for application to
the payment of such matured or fixed claim, and shall promptly give notice
thereof to the Company or (ii) all or part of such unliquidated, unmatured or
contingent claim shall have been extinguished, whether as the result of an
expiration without drawing of any Letter of Credit, payment of amounts secured
or covered by any Letter of Credit other than by drawing thereunder, payment of
amounts covered by any guarantee or otherwise, in which case such Secured Party
shall, as soon as practicable thereafter, notify the Company and the
Administrative Agent.
(d) In making the determinations and allocations required by this
Section, the Administrative Agent may conclusively rely upon information
supplied by the Administrative Agent (or the relevant Lender, in the case of
Eligible Hedge Agreements) as to the amounts payable with respect to Guarantee
Obligations and upon information supplied by a Designated Foreign Lender as to
the amounts payable with respect to Qualified Foreign Indebtedness, and the
Administrative Agent shall have no liability to any of the Secured Parties for
actions taken in reliance on any such information.
(e) If an Event of Default shall have occurred and be continuing,
the Administrative Agent, on behalf of the Lenders, may exercise, in addition to
all other rights and remedies granted in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured party under the Code. Without limiting the
generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Pledgors or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived to the fullest extent permitted by
applicable law), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, assign, give option or options to purchase or otherwise dispose
of and deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, in the
over-the-counter market, at any exchange, broker's board or office of the
Administrative Agent or any Lender or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The
Administrative Agent or any Secured Party shall have the right upon any such
public sale or sales, and, to the fullest extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in the Pledgors, which right or
equity of redemption is hereby waived or released to the extent permitted by
applicable law. The Administrative Agent shall apply any Proceeds from time to
time held by it and the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred in respect thereof or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Administrative Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements of counsel to
the Administrative Agent, to the payment in whole or in part of the Obligations,
in accordance with paragraph (a) above, and only after such application and
after the payment by the Administrative Agent of any other amount required by
any provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Administrative Agent account for the surplus, if any, to the
relevant Pledgors. To the extent permitted by applicable law, each Pledgor
waives all claims, damages and demands they may acquire against the
Administrative Agent or any Secured Party arising out of the exercise by them of
any rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed
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reasonable and proper if given at least 10 days before such sale or other
disposition. Each Pledgor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of Collateral are insufficient to pay the
Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.
9. Registration Rights; Private Sales. (a) If the Administrative
Agent shall determine to exercise its right to sell any or all of the Pledged
Stock pursuant to Section 8 hereof, and if in the opinion of the Administrative
Agent it is necessary or advisable to have the Pledged Stock, or that portion
thereof to be sold, registered under the provisions of the Securities Act, the
relevant Pledgors will cause the Issuer thereof to (i) execute and deliver, and
cause the directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) to cause the registration statement
relating thereto to become effective and to remain effective for a period of one
year from the date of the first public offering of the Pledged Stock, or that
portion thereof to be sold, and (iii) to make all amendments thereto and/or to
the related prospectus which, in the opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. The relevant Pledgors agree to cause such Issuer
to comply with the provisions of the securities or "Blue Sky" laws of any and
all jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings statement
(which need not be audited) which will satisfy the provisions of Section 11(a)
of the Securities Act.
(b) The Pledgors recognize that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. The
Pledgors acknowledge and agree that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agree that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Each Pledgor further agree to use their best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of its Pledged Stock pursuant to this Section valid
and binding and in compliance with any and all other applicable Requirements of
Law. Each Pledgor further agree that a breach of any of the covenants contained
in this Section will cause irreparable injury to the Administrative Agent and
the Secured Parties, that the Administrative Agent and the Secured Parties have
no adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be specifically
enforceable against such Pledgor, and such Pledgor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.
10. Irrevocable Authorization and Instruction to Issuer. The
Pledgors hereby authorize and instruct each Issuer to comply with any
instruction received by it from the Administrative Agent in writing that (a)
states that an Event of Default has occurred and (b) is otherwise in accordance
with the terms of this Agreement, without any other or further instructions from
the Pledgors, and the Pledgors agree that each Issuer shall be fully protected
in so complying.
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11. Administrative Agent's Appointment as Attorney-in-Fact. (a) Each
Pledgor hereby irrevocably constitute and appoint the Administrative Agent and
any officer or agent of the Administrative Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Pledgor and in the name of
such Pledgor or in the Administrative Agent's own name, from time to time in the
Administrative Agent's discretion, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer.
(b) The Pledgors hereby ratify all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted in
Section 11(a). All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
12. Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar securities and property for its own account, except that the
Administrative Agent shall have no obligation to invest funds held in any
Collateral Account and may hold the same as demand deposits. Neither the
Administrative Agent, any Secured Party nor any of their respective directors,
officers, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Pledgors or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
13. Execution of Financing Statements. Pursuant to Section 9-402 of
the Code, each Pledgor authorizes the Administrative Agent to file financing
statements with respect to the Collateral without the signature of such Pledgor
in such form and in such filing offices as the Administrative Agent reasonably
determines appropriate to perfect the security interests of the Administrative
Agent under this Agreement. A carbon, photographic or other reproduction of this
Agreement shall be sufficient as a financing statement for filing in any
jurisdiction.
14. Authority of Administrative Agent. The Pledgors acknowledge that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Pledgors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and neither the Pledgors
nor any Issuer shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.
15. Notices. All notices, requests and demands given hereunder shall
be given in accordance with the Guarantee.
16. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any
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other jurisdiction.
17. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None
of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except, subject to subsection 13.1 of the
Credit Agreement, by a written instrument executed by the Pledgors and the
Administrative Agent.
(b) No failure to exercise and no delay in exercising, on the part
of the Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.
(c) The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
18. Section Headings. The section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
19. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Pledgors, the
Administrative Agent and the Lenders, provided that the Pledgors may not assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of the Administrative Agent and any purported assignment
without such consent shall be null and void.
20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
21. Designated Foreign Lenders. The Company may from time to time
designate certain banks or other financial institutions acceptable to the
Administrative Agent as "Designated Foreign Lenders" with respect to Qualified
Foreign Indebtedness by delivering a written notice to such effect to the
Administrative Agent in the form of Exhibit A hereto, executed by the Company
and the relevant Designated Foreign Lender and accepted by the Administrative
Agent. Each such bank or other financial institution shall thereafter be deemed
to be a Designated Foreign Lender for all purposes hereunder until such time as
the Administrative Agent shall have received written notice from the Company and
the relevant Designated Foreign Lender to such effect, at which time such
Designated Foreign Lender shall be deemed not to be a Secured Party for all
purposes hereunder and all right, title and interest of such Designated Foreign
Lender in the Collateral and the Security Documents shall terminate. No
Designated Foreign Lender shall have the right to exercise or seek to exercise
any rights or exercise any remedies with respect to any Collateral or institute
any action or proceeding with respect to such rights or remedies, including
without limitation, any action of foreclosure or contest, protest or object to
any foreclosure proceeding or action brought by the Administrative Agent or any
Lender or any other exercise by the Administrative Agent or any Lender of any
rights and remedies hereunder or under any Security Document.
22. To the extent that the shares of Pledged Stock of any Foreign
Issuer subject to the security interest granted under this Agreement exceed 66%
of any class of such Pledged Stock of any such Foreign Issuer, the security
interest in such shares of Pledged Stock (to the extent the security interest in
such shares of Pledged Stock exceeds 66% of any class of shares of such Pledged
Stock) shall be automatically released on the day which is 90 days following the
Closing Date and any certificates evidencing or representing such released
Pledged Stock shall be returned by the Administrative Agent to
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the relevant Pledgor. The security interest granted by Y&R B.V. hereunder shall
be automatically released on the day which is 90 days following the Closing Date
and any certificates evidencing or representing such released Pledged Stock
shall be returned by the Administrative Agent to Y&R B.V.
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IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL INC.
By:
--------------------------------
Title:
CYGNET HOLDINGS COMPANY INC.
By:
--------------------------------
Title:
LANDOR ASSOCIATES
By:
--------------------------------
Title:
YOUNG & RUBICAM INTERNATIONAL GROUP
B.V.
By:
--------------------------------
Title:
Schedules:
Schedule 1 - Description of Pledged Stock
247
SCHEDULE 1
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
% of Shares
Issuer Class of Stock* Stock Certificate No. No. of Shares Outstanding
---------------------- ----------------- ---------------------- --------------- --------------
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL INC., PLEDGOR
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ A/S** 1-13,200; 10,000,000 100%
13,201-
20,000
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Asia Ltd.** 15,17,18 27,804 100%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Italia S.r.l.** na na na 100%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Mexico S.A. de C.V.
Series B - Variable 1 924 66%
Series B - Minimo Fijo 1 16,500 66%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Poland Sp. z.o.o. na na na 66%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Pty Ltd** 11,12 800,000 100%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ S/C Ltda. na na na 66%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ Thailand Ltd. 41,42,45 33,660 66%
*CMG AG 1 1,848 66%
CYGNET HOLDINGS COMPANY INC., PLEDGOR
*BM Communications Inc. 1 1,000 100%
*▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇/NIS, Inc. 1 1,000 100%
*Young Rubicam S.A. **** 82,992,692 66%
*Summit Insurance Company 2 10,000 100%
LANDOR ASSOCIATES, PLEDGOR
*Landor Associates Asia-Pacific Ltd. 5 660 66%
*Landor Associates Designers & Consultants Ltd. 17 168,300 66%
*▇▇▇▇▇▇ ▇▇▇▇▇▇ Y Asociados S.A. de C.V. 6 4,620 66%
YOUNG & RUBICAM INTERNATIONAL GROUP B.V.,
PLEDGOR
*Young & Rubicam Denmark Group A/S*** na na na 100%
----------
* Stock is assumed to be common stock unless otherwise indicated.
** 100% of the outstanding shares of these first tier Foreign Subsidiaries
will be pledged upon closing; 90 days thereafter, the pledge will become
66% of the outstanding shares.
*** 100% of the outstanding shares will be pledged for a period of 90 days
from the closing date.
**** See certificate.
248
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Pledge
Agreement dated December ___, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Pledge Agreement"), made by ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇
International Inc., a Delaware corporation, Cygnet Holdings Company Inc., a
Delaware corporation, Landor Associates, a California corporation and Young &
Rubicam International Group B.V., a Netherlands entity, in favor of Bank of
America National Trust and Savings Association, as Administrative Agent for the
Lenders referred to in the Pledge Agreement. The undersigned agrees for the
benefit of the Administrative Agent and the Secured Parties as follows:
1. The undersigned will be bound by the terms of the Pledge
Agreement and will comply with such terms insofar as such terms are applicable
to the undersigned.
2. The undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5(a) of the
Pledge Agreement.
3. The terms of Section 9(c) of the Pledge Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
under or pursuant to or arising out of Section 9 of the Pledge Agreement.
[NAME OF ISSUER]
By:
------------------------------------
Title:
---------------------------------
Address for Notices:
_______________________________________
_______________________________________
__________________________________
Fax:
249
EXHIBIT A
[FORM OF DESIGNATED FOREIGN LENDER NOTICE]
DESIGNATED FOREIGN LENDER NOTICE
Reference is made to (a) the Security Agreement, dated as of
December __, 1996 (the "Parent Borrower Security Agreement"), made by Young &
Rubicam Holdings Inc., a New York corporation ("Y&R Holdings"), Young & Rubicam
Inc., a New York corporation ("Y&R Inc. (New York)"), Young & Rubicam, Inc., a
Delaware corporation ("Y&R Inc. (Delaware)"), Young & Rubicam L.P., a Delaware
limited partnership ("Y&R LP"; collectively with Y&R Holdings, Y&R Inc. (New
York) and Y&R Inc. (Delaware), the "Parent Borrowers") in favor of Bank of
America National Trust and Savings Association, a national banking association,
as Administrative Agent (in such capacity, the "Administrative Agent") for the
several banks and other financial institutions (the "Lenders") from time to time
parties to the Credit and Guarantee Agreement, dated as of December __, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Parent Borrowers, the Subsidiary Borrowers (as defined in
the Credit Agreement) from time to time parties thereto, the Lenders, the
Administrative Agent and Bank of America International Limited, a bank organized
under the laws of England, as European Payment Agent, (b) the Pledge Agreement,
dated as of December __, 1996 (the "Parent Borrower Pledge Agreement"), made by
the Parent Borrowers in favor of the Administrative Agent, (c) the Security
Agreement, dated as of December __, 1996 (the "Subsidiaries Security
Agreement"), made by each of the subsidiaries of the Parent Borrowers which are
parties thereto in favor of the Administrative Agent, and (d) the Pledge
Agreement, dated as of December __, 1996 (the "Subsidiaries Pledge Agreement",
and together with the Parent Borrower Security Agreement, the Parent Borrower
Pledge Agreement and the Subsidiaries Security Agreement, the "Security
Documents"), made by each of the subsidiaries of the Parent Borrowers which are
parties thereto in favor of the Administrative Agent.
The Company hereby designates [Name of Designated Foreign Lender] as
a "Designated Foreign Lender" under the Security Documents with a Maximum
Qualified Foreign Indebtedness Amount of $___________. The Company hereby
represents and warrants that the "Qualified Foreign Indebtedness" is comprised
of [include description] and that all amount outstanding in respect thereof will
be permitted under subsection 9.2(d) of the Credit Agreement.
The undersigned, [Name of Designated Foreign Lender], hereby
acknowledges and agrees that the Maximum Qualified Foreign Indebtedness Amount
with respect to the Qualified Foreign Indebtedness described herein shall be
$___________. The undersigned in its capacity as a Designated Foreign Lender
further acknowledges and agrees that (a) it shall be bound by all of the terms
and conditions of the Security Documents, (b) it shall not have the right to
exercise or seek to exercise any rights or exercise any remedies with respect to
any collateral subject to the Security Documents or institute any action or
proceeding with respect to such rights or remedies, including without
limitation, any action of foreclosure or contest, protest or object to any
foreclosure proceeding or action brought by the Administrative Agent or any
Lender or any other exercise by the Administrative Agent or any Lender of any
rights and remedies hereunder or under any Security Document, (c) it shall not
have the right to consent to any amendment, waiver or modification of any
Security Document (other than, subject to clause (d) below, any amendment,
waiver or other modification to subsection 7.3 of the Parent Borrower Security
Agreement and the Subsidiaries Security Agreement and Section 8 (other than
paragraph (e) thereof) of the Parent Borrower Pledge Agreement and the
Subsidiaries Pledge Agreement which materially adversely affects such Designated
Foreign Lender in a manner which is different to the effect of such amendment,
waiver or modification on the other Secured Parties), (d) it shall not have the
right to consent to any release of all or any portion of the Collateral by the
Administrative Agent or the Lenders,
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2
(e) it shall not have the right to request or direct that any payment be made
under subsection 7.3 of the Parent Borrower Security Agreement or the
Subsidiaries Security Agreement or Section 8 (other than paragraph (e) thereof)
of the Parent Borrower Pledge Agreement or the Subsidiaries Pledge Agreement,
(f) neither the Administrative Agent nor any Lender shall have any liability or
obligation to the undersigned (including, without limitation, with respect to
the perfection of any lien or security interest granted pursuant to the Security
Documents) except with respect to any payment (if and when made) under
subsection 7.3 of the Parent Borrower Security Agreement or the Subsidiaries
Security Agreement or Section 8 (other than paragraph (e) thereof) of the Parent
Borrower Pledge Agreement or the Subsidiaries Pledge Agreement and (g) it has
received copies of the Credit Agreement and each of the Security Documents. All
notices to the undersigned shall be sent to [insert notice information] or to
such other address as the undersigned shall designate in writing from time to
time to the Administrative Agent and all notices shall be given in accordance
with subsection 13.2 of the Credit Agreement.
THIS NOTICE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
The undersigned hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Notice or for recognition and enforcement of any
judgment in respect thereof,to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United State of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail, (or
any substantially similar form of mail), postage prepaid, to its address for
notices hereunder;
(d) agrees that nothing herein shall affect the right to effect
service or process in any other manner permitted by law or shall limit the right
to ▇▇▇ in any other jurisdiction; and
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3
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
[NAME OF DESIGNATED FOREIGN
LENDER]
By:
--------------------------------
Name:
[THE COMPANY]
By:
--------------------------------
Title:
Accepted:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Administrative Agent
By:
--------------------------------
Title:
252
EXHIBIT J TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF SUBSIDIARIES SECURITY AGREEMENT]
SECURITY AGREEMENT, dated as of December ___, 1996, made by each of
the Persons that are signatories hereto (the "Subsidiaries") in favor of Bank of
America National Trust and Savings Association, a national banking association,
as Administrative Agent (in such capacity, the "Administrative Agent") for the
several banks and other financial institutions (the "Lenders") from time to time
parties to the Credit and Guarantee Agreement, dated as of December __, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Young & Rubicam Holdings Inc., a New York corporation
("Y&R Holdings"), Young & Rubicam Inc., a New York corporation ("Y&R Inc. (New
York)"), Young & Rubicam Inc., a Delaware corporation ("Y&R Inc. (Delaware)"),
and Young & Rubicam L.P., a Delaware limited partnership ("Y&R LP"; collectively
with Y&R Holdings, Y&R Inc. (New York) and Y&R Inc. (Delaware), the "Parent
Borrowers"), the Subsidiary Borrowers (as defined in the Credit Agreement) from
time to time parties thereto, the Lenders, the Administrative Agent and Bank of
America International Limited, a bank organized under the laws of England, as
European Payment Agent.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Parent Borrowers upon the
terms and subject to the conditions set forth therein;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit under the Credit Agreement
that the Subsidiaries shall have executed and delivered that certain Guarantee
dated as of the date hereof (the "Guarantee");
WHEREAS, in satisfaction of such condition, the Subsidiaries have
executed and delivered the Guarantee, and
WHEREAS, it is also a condition precedent to the obligation of the
Lenders to make their respective extensions of credit under the Credit Agreement
that the Subsidiaries shall have executed and delivered this Security Agreement
to the Administrative Agent for the ratable benefit of the Secured Parties and
to secure their obligations under the Guarantee and the other Loan Documents.
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit under the
Credit Agreement, the Subsidiaries hereby agree with the Administrative Agent,
for the ratable benefit of the Secured Parties, as follows:
1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Credit Agreement and used herein are so used as so defined,
provided that, for purposes of this Agreement, "Lender" shall include any
Fronting Lender, Issuing Bank and any Person which is a party to an Eligible
Hedge Agreement; the following terms which are defined in the Uniform Commercial
Code
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2
in effect in the State of New York on the date hereof are used herein as so
defined: Accounts, Chattel Paper, Documents, Equipment, Farm Products, General
Intangibles, Instruments, Inventory and Proceeds; and the following terms shall
have the following meanings:
"Code": the Uniform Commercial Code as from time to time in effect
in the State of New York.
"Collateral": as defined in Section 2.
"Collateral Account": any account established to hold money
proceeds, maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent
for the account of the Secured Parties as provided in Section 8.
"Copyright License": any agreement, written or oral, providing for
the grant by or to the Subsidiaries of any right under any Copyright,
including, without limitation, any thereof listed in Schedule 1 hereto.
"Copyrights": all of the following to the extent that any Subsidiary
now or hereafter has any right, title or interest in any country in the
world (other than any such right, title or interest (a) created by any
Parent Borrower as a work-made-for-hire on behalf of any Client, (b)
acquired on behalf of any Client or (c) required to be transferred or
otherwise conveyed to any Client): (i) all copyrights in all works,
whether published or unpublished, now existing or hereafter created or
acquired, all registrations and recordings thereof, and all applications
in the United States Copyright Office, including, without limitation, any
thereof referred to in Schedule 1 hereto, and (ii) all renewals thereof.
"Designated Foreign Lender": any bank or financial institution which
(a) makes Qualified Foreign Indebtedness available to a Foreign Subsidiary
(pursuant to a commitment or otherwise) and (b) is designated as a
"Designated Foreign Lender" in accordance with Section 20.
"Eligible Hedge Agreement": any Foreign Currency Protection
Agreement and Interest Rate Protection Agreement entered into with any
Person that is a Lender or an Affiliate of a Lender at the time of
entering into such Foreign Currency Protection Agreement or Interest Rate
Protection Agreement, as the case may be.
"Guarantee Obligations": as to any Subsidiary, all of the
obligations and liabilities of such Subsidiary under the Guarantee.
"Maximum Qualified Foreign Indebtedness Amount": as to any
Designated Foreign Lender, the amount specified as such in the notice
pursuant to which such Designated Foreign Lender is designated as a
"Designated Foreign Lender".
"Obligations": as to any Subsidiary, the collective reference to (a)
the Guarantee Obligations and (b) the unpaid principal of and interest on
any Qualified Foreign Indebtedness owed by a Foreign Subsidiary to any
Designated Foreign Lender and any obligation of such Foreign Subsidiary to
reimburse such Designated Foreign Lender for drawings under letters of
credit issued by Designated Foreign Lender which constitute "Qualified
Foreign Indebtedness", provided that the maximum "Obligations" in respect
of the principal amount (or, in the case of letters of credit, the face
amount) of any Qualified Foreign Indebtedness owed to any Designated
Foreign Lender shall not exceed the Maximum Qualified Foreign Indebtedness
Amount for such Designated Foreign Lender and (c) all other obligations
and liabilities of such Subsidiary under
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3
the Loan Documents to which it is a party.
"Patent License": all agreements, whether written or oral, providing
for the grant by or to any Subsidiary of any right to manufacture, use or
sell any invention covered by a Patent.
"Patents": (a) all letters patent of the United States and all
reissues and extensions thereof, and (b) all applications for letters
patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof.
"Qualified Foreign Indebtedness": Indebtedness which is permitted
under subsection 9.2(d) of the Credit Agreement.
"Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Secured Instrument": any Loan Document, Eligible Hedge Agreement or
any agreement pursuant to which Qualified Foreign Indebtedness is made
available.
"Secured Parties": the collective reference to the Lenders and any
Designated Foreign Lenders.
"Security Agreement": this Security Agreement, as amended,
supplemented or otherwise modified from time to time.
"Trademark License": any agreement, written or oral, providing for
the grant by or to any Subsidiary of any right to use any Trademark,
including, without limitation, any thereof listed on Schedule 2 hereto.
"Trademarks": all of the following to the extent that any Subsidiary
now or hereafter has any right, title or interest (other than any such
right title or interest (a) created by any Parent Borrower as a
work-made-for-hire on behalf of any Client, (b) acquired on behalf of any
Client or (c) required to be transferred or otherwise conveyed to any
Client) (i) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade dress, trade styles,
service marks, designs, logos and other source or business identifiers,
and the goodwill of the business associated therewith, including customer
lists, license rights, advertising materials and all other business assets
which uniquely reflect the goodwill of the business, now existing or
hereafter adopted or acquired, all registrations and recordings thereof,
and all applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, or any State thereof, or any other Country, including,
without limitation, any thereof listed on Schedule 2 hereto, and (ii) all
renewals thereof.
2. Grant of Security Interest. As collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations, each Subsidiary hereby grants
to the Administrative Agent for the ratable benefit of the Secured Parties a
security interest in all of the following property now owned or at any time
hereafter acquired by such Subsidiary or in which such Subsidiary now has or at
any time in the future may acquire any right, title or interest (collectively,
the "Collateral"):
(a) all Accounts and Receivables;
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4
(b) all Chattel Paper;
(c) all Copyrights;
(d) all Copyright Licenses;
(e) all Documents;
(f) all Equipment;
(g) all General Intangibles;
(h) all Instruments;
(i) all Inventory;
(j) all Patents;
(k) all Patent Licenses;
(l) all Trademarks;
(m) all Trademark Licenses;
(n) all books and records pertaining to the Collateral; and
(o) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing.
3. Representations and Warranties. Each Subsidiary hereby represents
and warrants that:
3.1 Title; No Other Liens. Except for the security interests granted
to the Administrative Agent for the ratable benefit of the Secured Parties
pursuant to this Agreement and for Liens permitted under the Credit Agreement,
such Subsidiary owns each item of the Collateral free and clear of any and all
Liens or claims of others. No financing statement or other public notice with
respect to all or any part of its Collateral is on file or of record in any
public office, except such as have been filed in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties, pursuant to this
Agreement.
3.2 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3, will constitute perfected security interests in its
Collateral in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, as collateral security for the Obligations and (b) are prior to
all other Liens on its Collateral in existence on the date hereof.
3.3 Inventory and Equipment. The Inventory and the Equipment of such
Subsidiary are kept at the locations listed on Schedule 4.
3.4 Chief Executive Office. Such Subsidiary's chief executive office
is located at __________________________.
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5
3.5 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4. Covenants. Each Subsidiary covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Agreement until this Agreement shall terminate and the security interests
granted hereby shall be released:
4.1 Delivery of Instruments and Chattel Paper. If any amount payable
under or in connection with any of its Collateral shall be or become evidenced
by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement.
4.2 Maintenance of Insurance. (a) Such Subsidiary will maintain,
with financially sound and reputable insurance companies, insurance policies
(or, to the extent consistent with prudent business practice, a program of
self-insurance with respect to) insuring its Inventory and Equipment against
loss by fire, explosion, theft and such other casualties as may be reasonably
satisfactory to the Administrative Agent and insuring such Subsidiary, the
Administrative Agent and the Secured Parties against liability for personal
injury and property damage relating to such Inventory and Equipment, such
policies to be in such form and amounts and having such coverage as may be
reasonably satisfactory to the Administrative Agent and the Lenders, with losses
payable to such Subsidiary, the Administrative Agent and the Secured Parties as
their respective interests may appear.
(b) All such insurance shall provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Administrative Agent of written
notice thereof, (i) name the Administrative Agent and the Secured Parties as
insured parties, (ii) include a breach of warranty clause and (iii) be
reasonably satisfactory in all other respects to the Administrative Agent.
(c) Such Subsidiary shall deliver to the Administrative Agent and
the Lenders a report of a reputable insurance broker with respect to such
insurance during the month of ___________ in each calendar year and such
supplemental reports with respect thereto as the Administrative Agent may from
time to time reasonably request.
4.3 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Subsidiary shall maintain the security interest created
by it pursuant to this Agreement as a perfected security interest having at
least the priority described in subsection 3.2 and shall defend such security
interest against the claims and demands of all Persons whomsoever.
(b) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of such Subsidiary, such
Subsidiary will promptly and duly execute and deliver such further instruments
and documents and take such further actions as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements under
the Uniform Commercial Code in effect in any jurisdiction with respect to the
security interests created hereby.
4.4 Changes in Locations, Name, etc. Such Subsidiary will not:
(a) permit any of its Inventory or Equipment to be kept at a
location other than those listed on Schedule 4; or
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(b) change the location of its chief executive office from that
specified in subsection 3.4;
(c) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become seriously misleading;
unless, in each case, it shall have given the Administrative Agent
and the Lenders at least 30 days' prior written notice of such change and all
filings necessary in the opinion of the Administrative Agent to maintain the
perfection of the security interests granted pursuant to this Agreement shall
have been made.
4.5 Further Identification of Collateral. Such Subsidiary will
furnish to the Administrative Agent and the Lenders from time to time statements
and schedules further identifying and describing its Collateral and such other
reports in connection with its Collateral as the Administrative Agent may
reasonably request, all in reasonable detail.
4.6 Notices. Such Subsidiary will advise the Administrative Agent
and the Lenders promptly, in reasonable detail, at their respective addresses
for notices provided for in the Credit Agreement of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral; and
(b) the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of its
Collateral or on the security interests therein created hereby.
5. Provisions Relating to Receivables.
5.1 Subsidiaries Remain Liable under Receivables. Anything herein to
the contrary notwithstanding, each Subsidiary shall remain liable under each of
its Receivables to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to each such Receivable. Neither the Administrative Agent
nor any Secured Party shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by the Administrative Agent or any Secured Party
of any payment relating to such Receivable pursuant hereto, nor shall the
Administrative Agent or any Secured Party be obligated in any manner to perform
any of the obligations of any Subsidiary under or pursuant to any Receivable (or
any agreement giving rise thereto), to make any payment, to make any inquiry as
to the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party under any Receivable (or any
agreement giving rise thereto), to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or times.
5.2 Analysis of Receivables. The Administrative Agent shall have the
right to make test verifications of the Receivables of the Subsidiaries in any
manner and through any medium that it reasonably considers advisable, and each
Subsidiary shall furnish all such assistance and information as the
Administrative Agent may require in connection with such test verifications. At
any time and from time to time, upon the Administrative Agent's request and at
the expense of the Subsidiaries, each Subsidiary shall cause independent public
accountants or others satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test
verifications of,
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and trial balances for, its Receivables. The Administrative Agent in its own
name or in the name of others, may at any time after the occurrence and during
the continuance of an Event of Default, communicate with the obligors on the
Receivables of the Subsidiaries to verify with them to the Administrative
Agent's satisfaction the existence, amount and terms of any Receivables of the
Subsidiaries.
5.3 Collections on Receivables. (a) The Administrative Agent hereby
authorizes each Subsidiary to collect its Receivables, subject to the
Administrative Agent's direction and control, and the Administrative Agent may
curtail or terminate said authority at any time after the occurrence and during
the continuance of an Event of Default. If required by the Administrative Agent
at any time after the occurrence and during the continuance of an Event of
Default, any payments of Receivables of the Subsidiaries, when collected by any
Subsidiary, shall be forthwith (and, in any event, within two Business Days)
deposited by such Subsidiary in the exact form received, duly indorsed by such
Subsidiary to the Administrative Agent if required, in a Collateral Account
maintained under the sole dominion and control of the Administrative Agent,
subject to withdrawal by the Administrative Agent for the account of the Lenders
only as provided in subsection 7.3, and until so turned over, shall be held by
such Subsidiary in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Subsidiary.
(b) Each such deposit of Proceeds of Receivables shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.
(c) At the Administrative Agent's request, each Subsidiary shall
deliver to the Administrative Agent all original and other documents evidencing,
and relating to, the agreements and transactions which gave rise to its
Receivables, including, without limitation, all original orders, invoices and
shipping receipts.
5.4 Representations and Warranties. Each Subsidiary hereby
represents and warrants that:
(a) No amount payable to such Subsidiary under or in connection with
any of its Receivables is evidenced by any Instrument or Chattel Paper which has
not been delivered to the Administrative Agent.
(b) The amounts represented by such Subsidiary to the Lenders from
time to time as owing to such Subsidiary in respect of its Receivables will at
such times be accurate.
5.5 Covenants. Each Subsidiary covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Agreement until this Agreement shall terminate and the security interests
granted pursuant to this Agreement shall be released:
(a) Other than in the ordinary course of business consistent with
its past practice, such Subsidiary will not (i) grant any extension of the time
of payment of any of its Receivables, (ii) compromise or settle any of its
Receivables for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any of its Receivables, (iv)
allow any credit or discount whatsoever on any of its Receivables, (v) amend,
supplement or modify any of its Receivables in any manner that could adversely
affect the value thereof or (vi) fail to exercise promptly and diligently each
and every material right which it may have under each agreement giving rise to a
Receivable (other than any right of termination).
(b) Such Subsidiary will deliver to the Administrative Agent a copy
of each material demand, notice or document received by it that questions the
validity or enforceability of more than 5%
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of the aggregate amount of its then outstanding Receivables.
6. Provisions Relating to Copyrights, Patents and Trademarks.
6.1 Representations and Warranties. Each Subsidiary hereby
represents and warrants that:
(a) Schedule 1 includes all material Copyrights and Copyright
Licenses owned by such Subsidiary in its own name on the date hereof.
(b) Schedule 2 includes all material Trademarks and Trademark
Licenses owned by such Subsidiary in its own name on the date hereof.
(c) To the best of such Subsidiary's knowledge, each of its material
Copyrights and Trademarks is on the date hereof valid, subsisting, unexpired,
enforceable and has not been abandoned.
(d) Except as set forth in either Schedule 1 or Schedule 2, none of
such Copyrights and Trademarks owned by it is on the date hereof the subject of
any licensing or franchise agreement.
(e) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of any
Copyright or Trademark in any respect that could reasonably be expected to have
a Material Adverse Effect.
(f) Such Subsidiary does not own any Patent or Patent License which
is material to its business.
(g) No action or proceeding is pending on the date hereof (i)
seeking to limit, cancel or question the validity of any material Copyright or
Trademark, or (ii) which, if adversely determined, would have a material adverse
effect on the value of any material Copyright or Trademark.
6.2 Covenants. Each Subsidiary covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Agreement until this Agreement shall terminate and the security interests
granted pursuant to this Agreement shall be released:
(a) Such Subsidiary (either itself or through licensees) will (i)
continue to use each material Trademark on each and every trademark class of
goods applicable to its current line as reflected in its current catalogs,
brochures and price lists in order to maintain such Trademark in full force free
from any claim of abandonment for non-use, maintain as in the past the quality
of products and services offered under such Trademark, employ such Trademark
with the appropriate notice of registration, not adopt or use any ▇▇▇▇ which is
confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent, for the ratable benefit of the Secured Parties, shall
obtain a perfected security interest in such ▇▇▇▇ pursuant to this Agreement,
and not (and not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby such Trademark may become invalidated.
(b) Each Subsidiary will notify the Administrative Agent and the
Lenders immediately if it knows, or has reason to know, that any application or
registration relating to any material Copyright or Trademark may become
abandoned or dedicated, or of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Trademark Office or any
court or tribunal in any country) regarding such Subsidiary's ownership of any
material Copyright or Trademark or its right to register the same or to keep and
maintain the same.
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(c) Whenever such Subsidiary, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any material Copyright or Trademark with the United States Patent and
Trademark Office or any similar office or agency in any other country or any
political subdivision thereof, such Subsidiary shall report such filing to the
Administrative Agent and the Lenders within five Business Days after the last
day of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, each Subsidiary shall execute and deliver any and all
agreements, instruments, documents, and papers as the Administrative Agent may
request to evidence the Administrative Agent's and the Secured Parties' security
interest in any of its material Copyrights or Trademarks and the goodwill and
general intangibles of such Subsidiary relating thereto or represented thereby.
(d) Each Subsidiary will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of its
material Copyrights and Trademarks, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.
(e) In the event that any material Copyright or Trademark is
infringed, misappropriated or diluted by a third party, each Subsidiary shall
(i) take such actions as such Subsidiary shall reasonably deem appropriate under
the circumstances to protect such Copyright or Trademark and (ii) promptly
notify the Administrative Agent and the Lenders after it learns thereof and ▇▇▇
for infringement, misappropriation or dilution, to seek injunctive relief where
appropriate and to recover any and all damages for such infringement,
misappropriation or dilution.
7. Remedies.
7.1 Notice to Obligors and Contract Parties. Upon the request of the
Administrative Agent at any time after the occurrence and during the continuance
of an Event of Default, each Subsidiary shall notify obligors on its Receivables
that such Receivables have been assigned to the Administrative Agent for the
ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Administrative Agent.
7.2 Proceeds to be Turned Over To Administrative Agent. In addition
to the rights of the Administrative Agent and the Lenders specified in
subsection 5.3 with respect to payments of Receivables, if an Event of Default
shall occur and be continuing all Proceeds received by any Subsidiary consisting
of cash, checks and other near-cash items shall be held by such Subsidiary in
trust for the Administrative Agent and the Lenders, segregated from other funds
of such Subsidiary, and shall, forthwith upon receipt by such Subsidiary, be
turned over to the Administrative Agent in the exact form received by such
Subsidiary (duly indorsed by such Subsidiary to the Administrative Agent, if
required) and held by the Administrative Agent in a Collateral Account
maintained under the sole dominion and control of the Administrative Agent. All
Proceeds while held by the Administrative Agent in a Collateral Account (or by
such Subsidiary in trust for the Administrative Agent and the Lenders) shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in subsection 7.3.
7.3 Application of Proceeds. (a) At such intervals as may be agreed
upon by the relevant Subsidiaries and the Administrative Agent, or, if an Event
of Default shall have occurred and be continuing, at any time at the
Administrative Agent's election, the Administrative Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations in
the following order of priority:
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First: to the Administrative Agent for any unpaid fees, expenses and
other costs of the Administrative Agent;
Second: to the Secured Parties in an amount equal to the unpaid
principal or face amount of, and unpaid interest on, and premium or fees,
if any, in respect of, the Obligations then outstanding whether or not
then due and payable, including, without limitation, the aggregate undrawn
amounts available to be drawn (assuming compliance with all conditions to
drawing) under all Letters of Credit and the aggregate estimated amount of
payment liabilities of the Parent Borrowers and the Subsidiaries under
Eligible Hedge Agreements assuming immediate termination of all such
agreements, and, if such moneys shall be insufficient to pay such amounts
in full, then ratably (without priority of any one over any other) to the
Secured Parties in proportion to the unpaid amounts thereof on the date
any such payment is made;
Third: to the Secured Parties, amounts equal to all other sums which
constitute Obligations, including without limitation the costs and
expenses of the Secured Parties and their representatives which are due
and payable under the relevant Secured Instruments and which constitute
Obligations as of the date any such payment is made, and, if such moneys
shall be insufficient to pay such sums in full, then ratably to the
Secured Parties in proportion to such sums; and
Fourth: any surplus then remaining shall be paid to the relevant
Subsidiaries or their successors or assigns or to whomsoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
(b) The term "unpaid" as used in clauses Second and Third of
paragraph (a) above refers:
(i) in the absence of a bankruptcy proceeding with respect to the
relevant Subsidiary, to all amounts of Obligations, as the case may be,
outstanding as of the date a payment is made, whether or not such amounts
are fixed or contingent, and
(ii) during the pendency of a bankruptcy proceeding with respect to
the relevant Subsidiary, to all amounts allowed by the bankruptcy court in
respect of Obligations as a basis for distribution (including estimated
amounts, if any, allowed in respect of contingent claims),
to the extent that prior distributions (whether actually distributed or set
aside pursuant to this Section) have not been made in respect thereof.
(c) In the event any Secured Party shall be entitled to receive any
moneys pursuant to clauses Second or Third of paragraph (a) in respect of the
unliquidated, unmatured or contingent portion of the outstanding Obligations
(including, without limitation, obligations under then outstanding Letters of
Credit), then the Administrative Agent shall hold such amount in a Collateral
Account for the benefit of such Secured Party until (i) such Secured Party shall
have notified the Administrative Agent that all or part of such unliquidated,
unmatured or contingent claim shall have become matured or fixed, in which case
the Administrative Agent shall distribute from such Collateral Account an amount
equal to such matured or fixed claim to such Secured Party for application to
the payment of such matured or fixed claim, and shall promptly give notice
thereof to the Company or (ii) all or part of such unliquidated, unmatured or
contingent claim shall have been extinguished, whether as the result of an
expiration without drawing of any Letter of Credit, payment of amounts secured
or covered by any Letter of Credit other than by drawing thereunder, payment of
amounts covered by any guarantee or otherwise, in which
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case such Secured Party shall, as soon as practicable thereafter, notify the
relevant Subsidiary and the Administrative Agent.
(d) In making the determinations and allocations required by this
Section, the Administrative Agent may conclusively rely upon information
supplied by the Administrative Agent (or the relevant Lender, in the case of
Eligible Hedge Agreements) as to the amounts payable with respect to Guarantee
Obligations and upon information supplied by a Designated Foreign Lender as to
the amounts payable with respect to Qualified Foreign Indebtedness, and the
Administrative Agent shall have no liability to any of the Secured Parties for
actions taken in reliance on any such information.
7.4 Code Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Secured Parties may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, the Administrative
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Subsidiary or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Administrative Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Administrative Agent or any Secured Party shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Subsidiary,
which right or equity is hereby waived or released. Each Subsidiary further
agrees, at the Administrative Agent's request, to assemble the Collateral and
make it available to the Administrative Agent at places which the Administrative
Agent shall reasonably select, whether at such Subsidiary's premises or
elsewhere. The Administrative Agent shall apply the net proceeds of any action
taken by it pursuant to this subsection, after deducting all reasonable costs
and expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent and the Lenders hereunder,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Obligations, in such order as the
Administrative Agent may elect, and only after such application and after the
payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Administrative Agent account for the surplus, if any, to the
relevant Subsidiaries. To the extent permitted by applicable law, each
Subsidiary waives all claims, damages and demands it may acquire against the
Administrative Agent or any Lender arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.
8. Administrative Agent's Appointment as Attorney-in-Fact;
Administrative Agent's Performance of Subsidiary Obligations.
8.1 Powers. Each Subsidiary hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Subsidiary and in
the name of such Subsidiary or in its own name, for the purpose of carrying out
the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and
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instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, such
Subsidiary hereby gives the Administrative Agent the power and right, on behalf
of the such Subsidiary, without notice to or assent by such Subsidiary, to do
any or all of the following:
(a) in the name of such Subsidiary or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
of its Receivables or with respect to any of its other Collateral and file
any claim or take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Administrative Agent for the
purpose of collecting any and all such moneys due under any of its
Receivables or with respect to any of its other Collateral whenever
payable;
(b) in the case of any of its Copyrights, Patents or Trademarks,
execute and deliver any and all agreements, instruments, documents and
papers as the Administrative Agent may request to evidence the
Administrative Agent's and the Secured Parties' security interest in such
Copyright, Patent or Trademark and the goodwill and general intangibles of
such Subsidiary relating thereto or represented thereby;
(c) pay or discharge taxes and Liens levied or placed on or
threatened against any of its Collateral, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or any
part of the premiums therefor and the costs thereof;
(d) execute, in connection with any sale provided for in subsection
7.4, any indorsements, assignments or other instruments of conveyance or
transfer with respect to any of its Collateral; and
(e) direct any party liable for any payment under any of its
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; ask or demand for, collect, receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become
due at any time in respect of or arising out of any of its Collateral;
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of its
Collateral; commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect any of
its Collateral or any thereof and to enforce any other right in respect of
any of its Collateral; defend any suit, action or proceeding brought
against any Subsidiary with respect to any of its Collateral; settle,
compromise or adjust any such suit, action or proceeding and, in
connection therewith, to give such discharges or releases as the
Administrative Agent may deem appropriate; assign any Copyright, Patent or
Trademark (along with the goodwill of the business to which any such
Copyright, Patent or Trademark pertains), throughout the world for such
term or terms, on such conditions, and in such manner, as the
Administrative Agent shall in its sole discretion determine; and
generally, sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of its Collateral as fully and completely as
though the Administrative Agent were the absolute owner thereof for all
purposes, and do, at the Administrative Agent's option and the
Subsidiaries' expense, at any time, or from time to time, all acts and
things which the Administrative Agent deems necessary to protect, preserve
or realize upon the Collateral and the Administrative Agent's and the
Lenders' security interests therein and to effect the intent of this
Agreement, all as fully and effectively as any Subsidiary might do.
Anything in this subsection to the contrary notwithstanding, the
Administrative Agent
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agrees that it will not exercise any rights under the power of attorney provided
for in this subsection unless an Event of Default shall have occurred and be
continuing.
8.2 Performance by Administrative Agent of Borrower's Obligations.
If any Subsidiary fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
8.3 Borrower's Reimbursement Obligation. The expenses of the
Administrative Agent incurred in connection with actions undertaken as provided
in this Section, together with interest thereon at a rate per annum equal to the
rate per annum at which interest would then be payable on past due Base Rate
Loans under the Credit Agreement, from the date of payment by the Administrative
Agent to the date reimbursed by the relevant Subsidiary, shall be payable by the
such Subsidiary to the Administrative Agent on demand.
8.4 Ratification; Power Coupled With An Interest. Each Subsidiary
hereby ratifies all that said attorneys shall lawfully do or cause to be done by
virtue hereof. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
9. Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar property for its own account. Neither the Administrative Agent, any
Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Subsidiary or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the Lenders hereunder are solely to protect the Administrative Agent's and
the Secured Parties' interests in the Collateral and shall not impose any duty
upon the Administrative Agent or any Lender to exercise any such powers. The
Administrative Agent and the Lenders shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Subsidiary for any act or failure to act hereunder, except
for their own gross negligence or willful misconduct.
10. Execution of Financing Statements. Pursuant to Section 9-402 of
the Code, each Subsidiary authorizes the Administrative Agent to file financing
statements with respect to the Collateral without the signature of such
Subsidiary in such form and in such filing offices as the Administrative Agent
reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. A carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement for
filing in any jurisdiction.
11. Authority of Administrative Agent. Each Subsidiary acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Secured Parties, be governed by the Credit Agreement, this
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Administrative Agent and the
Subsidiaries, the Administrative Agent shall be conclusively presumed to be
acting as agent for the Secured Parties with full and valid authority so to act
or refrain from acting, and the Subsidiaries shall be under no obligation,
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or entitlement, to make any inquiry respecting such authority.
12. Notices. All notices, requests and demands to or upon the
Administrative Agent or any Subsidiary hereunder shall be effected in the manner
provided for in the Guarantee.
13. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14. Amendments in Writing; No Waiver; Cumulative Remedies.
14.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except,
subject to subsection 13.1 of the Credit Agreement, by a written instrument
executed by the Parent Borrowers and the Administrative Agent.
14.2 No Waiver by Course of Conduct. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to subsection 14.1), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Administrative Agent or any Lender, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Administrative Agent or such Lender would otherwise have on any
future occasion.
14.3 Remedies Cumulative. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
15. Section Headings. The Section and subsection headings used in
this Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
16. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Subsidiaries and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns.
17. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
18. Integration. This Agreement represents the agreement of the
Subsidiaries and the Administrative Agent with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
19. Termination. (a) Subject to subsection 13.18 of the Credit
Agreement, this Agreement and the Liens created hereby shall terminate when all
the Guarantee Obligations shall have been fully and indefeasibly paid, when no
Letters of Credit shall remain outstanding and when the
266
15
Commitments shall have expired or terminated under the Credit Agreement, at
which time the Administrative Agent shall execute and deliver to the
Subsidiaries, or to such person or persons as the Subsidiaries shall reasonably
designate, all Uniform Commercial Code termination statements and similar
documents prepared by the Subsidiaries at their expense which the Subsidiaries
shall reasonably request to evidence such termination.
(b) Without limiting the foregoing, all Collateral permitted to be
sold, transferred or otherwise disposed of in accordance with the terms and
provisions of the Credit Agreement shall be sold, transferred or otherwise
disposed of free and clear of the Liens created hereby. In connection with the
foregoing, the Administrative Agent shall execute and deliver to the relevant
Subsidiaries, or to such Person or Persons as such Subsidiaries shall reasonably
designate, all Uniform Commercial Code termination statements and similar
documents prepared by such Subsidiaries at their expense which such Subsidiaries
shall reasonably request to evidence the release of the Liens created hereby
with respect to any such Collateral.
(c) Any execution and delivery of statements or documents pursuant
to this Section 19 shall be without recourse to or representation or warranty by
the Administrative Agent.
20. Designated Foreign Lenders. The Company may from time to time
designate certain banks or other financial institutions acceptable to the
Administrative Agent as "Designated Foreign Lenders" with respect to Qualified
Foreign Indebtedness by delivering a written notice to such effect to the
Administrative Agent in the form of Exhibit A hereto, executed by the Company
and the relevant Designated Foreign Lender and accepted by the Administrative
Agent. Each such bank or other financial institution shall thereafter be deemed
to be a Designated Foreign Lender for all purposes hereunder until such time as
the Administrative Agent shall have received written notice from the
Company and the relevant Designated Foreign Lender to such effect, at which time
such Designated Foreign Lender shall be deemed not to be a Secured Party for all
purposes hereunder and all right, title and interest of such Designated Foreign
Lender in the Collateral and the Security Documents shall terminate. No
Designated Foreign Lender shall have the right to exercise or seek to exercise
any rights or exercise any remedies with respect to any Collateral or institute
any action or proceeding with respect to such rights or remedies, including
without limitation, any action of foreclosure or contest, protest or object to
any foreclosure proceeding or action brought by the Administrative Agent or any
Lender or any other exercise by the Administrative Agent or any Lender of any
rights and remedies hereunder or under any Security Document.
267
16
IN WITNESS WHEREOF, the undersigned has caused this Security
Agreement to be duly executed and delivered as of the date first above written.
BLACK, KELLY, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ INC.
By:
--------------------------------
Title:
BM COMMUNICATIONS INC.
By:
--------------------------------
Title:
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL
INC.
By:
--------------------------------
Title:
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇/NIS, INC.
By:
--------------------------------
Title:
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ (PUERTO RICO) INC.
By:
--------------------------------
Title:
CYGNET HOLDINGS COMPANY INC.
By:
--------------------------------
Title:
268
17
LANDOR ASSOCIATES
By:
--------------------------------
Title:
LANDOR ASSOCIATES INTERNATIONAL
By:
--------------------------------
Title:
RSBC VESTIGES INC.
By:
--------------------------------
Title:
Y&R FAR EAST HOLDINGS, INC.
By:
--------------------------------
Title:
YOUNG & RUBICAM PUERTO RICO, INC.
By:
--------------------------------
Title:
Schedules:
Schedule 1 - Copyrights and Copyright Licenses
Schedule 2 - Trademarks and Trademark Licenses
Schedule 3 - Filing Jurisdictions
Schedule 4 - Locations of Inventory and Equipment
269
Schedule 2
TRADEMARKS AND TRADEMARK LICENSES
None.
270
Schedule 3
FILING JURISDICTIONS
(SUBSIDIARIES)
==========================================================================================================
DEBTOR NAME AND LOCATION OF FILING LOCATION
CHIEF EXECUTIVE OFFICE
==========================================================================================================
Black, Kelly, Scruggs, & ▇▇▇▇▇▇ Inc., Secretary of State, New York
Delaware corporation Recorder of Deeds, District of Columbia
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ County Clerk, New York County (NY)
Tax ID: ▇▇-▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------------------
BM Communications Inc., Secretary of State, New York
Delaware corporation Recorder of Deeds, District of Columbia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ County Clerk, New York County (NY)
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: Pending
----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ International Inc., Secretary of State, New York
Delaware corporation County Clerk, New York County (NY)
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇/NIS Inc., Secretary of State, New York
Delaware corporation Recorder of Deeds, District of Columbia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ County Clerk, New York County (NY)
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: Pending
----------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ (Puerto Rico), Inc., Secretary of State, New York
Delaware corporation County Clerk, New York County (NY)
▇▇▇▇▇ ▇▇▇▇▇ ▇▇. #▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------------------
Cygnet Holdings Inc., Secretary of State, New York
Delaware corporation County Clerk, New York County (NY)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
----------------------------------------------------------------------------------------------------------
Landor Associates Secretary of State, New York
California corporation Secretary of State, California
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Department of State, Florida
Tax ID: ▇▇-▇▇▇▇▇▇▇ Secretary of State, Illinois
Department of Licensing, Washington
County Clerk, New York County (NY)
==========================================================================================================
271
Schedule 3
================================================================================
DEBTOR NAME AND LOCATION OF FILING LOCATION
CHIEF EXECUTIVE OFFICE
================================================================================
Landor Associates International, Secretary of State, New York
California corporation Secretary of State, California
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ County Clerk, New York County (NY)
Tax ID: ▇▇-▇▇▇▇▇▇▇
(Japan)
Sogo Hirakawacho Building
1-4-12, Hirakawacho
------------------------------------------------------------------------------
RSBC Vestiges Inc., Secretary of State, New York
New York corporation County Clerk, New York County (NY)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
-------------------------------------------------------------------------------
Y&R Far East Holdings, Inc., Secretary of State, New York
Delaware corporation County Clerk, New York County (NY)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
-------------------------------------------------------------------------------
Young & Rubicam Puerto Rico, Inc., Secretary of State, New York
New York corporation County Clerk, New York County (NY)
▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tax ID: ▇▇-▇▇▇▇▇▇▇
================================================================================
272
Schedule 4
LOCATIONS OF INVENTORY AND EQUIPMENT
(SUBSIDIARIES)
BLACK, KELLY,
-------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇ INC.
--------------------
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(District of Columbia)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇
-----------------
INTERNATIONAL INC.
------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(New York County)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇
-----------------
(PUERTO RICO), INC.
-------------------
▇▇▇▇▇ ▇▇▇▇▇ ▇▇. #▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
CYGNET HOLDINGS INC.
--------------------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(New York County)
SUMMIT INSURANCE
----------------
COMPANY
-------
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Washington County)
BM COMMUNICATIONS
-----------------
INC.
----
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(New York County)
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(District of Columbia)
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇/
------------------
NIS INC.
--------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(New York County)
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(District of Columbia)
LANDOR ASSOCIATES
-----------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(San Francisco County)
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Dade County)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇▇ County)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(New York County)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(King County)
LANDOR ASSOCIATES
-----------------
INTERNATIONAL
-------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(San Francisco County)
RSBC VESTIGES INC.
------------------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(New York County)
Y&R FAR EAST
------------
HOLDINGS, INC.
--------------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(New York County)
YOUNG & RUBICAM
---------------
PUERTO RICO, INC.
-----------------
▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
273
EXHIBIT A
[FORM OF DESIGNATED FOREIGN LENDER NOTICE]
DESIGNATED FOREIGN LENDER NOTICE
Reference is made to (a) the Security Agreement, dated as of
____________ __, 1996 (the "Parent Borrower Security Agreement"), made by Young
& Rubicam Holdings Inc., a New York corporation ("Y&R Holdings"), Young &
Rubicam Inc., a New York corporation ("Y&R Inc. (New York)"), Young & Rubicam,
Inc., a Delaware corporation ("Y&R Inc. (Delaware)"), Young & Rubicam L.P., a
Delaware limited partnership ("Y&R LP"; collectively with Y&R Holdings, Y&R Inc.
(New York) and Y&R Inc. (Delaware), the "Parent Borrowers") in favor of Bank of
America National Trust and Savings Association, a national banking association,
as Administrative Agent (in such capacity, the "Administrative Agent") for the
several banks and other financial institutions (the "Lenders") from time to time
parties to the Credit and Guarantee Agreement, dated as of December __, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Parent Borrowers, the Subsidiary Borrowers (as defined in
the Credit Agreement) from time to time parties thereto, the Lenders, the
Administrative Agent and Bank of America International Limited, a bank organized
under the laws of England, as European Payment Agent, (b) the Pledge Agreement,
dated as of _________ __, 1996 (the "Parent Borrower Pledge Agreement"), made by
the Parent Borrowers in favor of the Administrative Agent, (c) the Security
Agreement, dated as of __________ __, 1996 (the "Subsidiaries Security
Agreement"), made by each of the subsidiaries of the Parent Borrowers which are
parties thereto in favor of the Administrative Agent, and (d) the Pledge
Agreement, dated as of _________ __, 1996 (the "Subsidiaries Pledge Agreement",
and together with the Parent Borrower Security Agreement, the Parent Borrower
Pledge Agreement and the Subsidiaries Security Agreement, the "Security
Documents"), made by each of the subsidiaries of the Parent Borrowers which are
parties thereto in favor of the Administrative Agent.
The Company hereby designates [Name of Designated Foreign Lender] as
a "Designated Foreign Lender" under the Security Documents with a Maximum
Qualified Foreign Indebtedness Amount of $___________. The Company hereby
represents and warrants that the "Qualified Foreign Indebtedness" is comprised
of [include description] and that all amount outstanding in respect thereof will
be permitted under subsection 9.2(d) of the Credit Agreement.
The undersigned, [Name of Designated Foreign Lender], hereby
acknowledges and agrees that the Maximum Qualified Foreign Indebtedness Amount
with respect to the Qualified Foreign Indebtedness described herein shall be
$___________. The undersigned in its capacity as a Designated Foreign Lender
further acknowledges and agrees that (a) it shall be bound by all of the terms
and conditions of the Security Documents, (b) it shall not have the right to
exercise or seek to exercise any rights or exercise any remedies with respect to
any collateral subject to the Security Documents or institute any action or
proceeding with respect to such rights or remedies, including without
limitation, any action of foreclosure or contest, protest or object to any
foreclosure proceeding or action brought by the Administrative Agent or any
Lender or any other exercise by the Administrative Agent or any Lender of any
rights and remedies hereunder or under any Security Document, (c) it shall not
have the right to consent to any amendment, waiver or modification of any
Security Document (other than, subject to clause (d) below, any amendment,
waiver or other modification to subsection 7.3 of the Parent Borrower Security
Agreement and the Subsidiaries Security Agreement and Section 8 (other than
paragraph (e) thereof) of the Parent Borrower Pledge Agreement and the
Subsidiaries Pledge Agreement which materially adversely affects such Designated
Foreign Lender in a manner which is different to the effect of such amendment,
waiver or modification on the other Secured Parties), (d) it shall not have the
right to consent to any release of all or any portion of the Collateral by the
Administrative Agent or the Lenders,
274
2
(e) it shall not have the right to request or direct that any payment be made
under subsection 7.3 of the Parent Borrower Security Agreement or the
Subsidiaries Security Agreement or Section 8 (other than paragraph (e) thereof)
of the Parent Borrower Pledge Agreement or the Subsidiaries Pledge Agreement,
(f) neither the Administrative Agent nor any Lender shall have any liability or
obligation to the undersigned (including, without limitation, with respect to
the perfection of any lien or security interest granted pursuant to the Security
Documents) except with respect to any payment (if and when made) under
subsection 7.3 of the Parent Borrower Security Agreement or the Subsidiaries
Security Agreement or Section 8 (other than paragraph (e) thereof) of the Parent
Borrower Pledge Agreement or the Subsidiaries Pledge Agreement and (g) it has
received copies of the Credit Agreement and each of the Security Documents. All
notices to the undersigned shall be sent to [insert notice information] or to
such other address as the undersigned shall designate in writing from time to
time to the Administrative Agent and all notices shall be given in accordance
with subsection 13.2 of the Credit Agreement.
THIS NOTICE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
The undersigned hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Notice or for recognition and enforcement of any
judgment in respect thereof,to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United State of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail, (or
any substantially similar form of mail), postage prepaid, to its address for
notices hereunder;
(d) agrees that nothing herein shall affect the right to effect
service or process in any other manner permitted by law or shall limit the right
to ▇▇▇ in any other jurisdiction; and
275
3
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
[NAME OF DESIGNATED FOREIGN
LENDER]
By:
--------------------------------
Name:
[THE COMPANY]
By:
--------------------------------
Title:
Accepted:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Administrative Agent
By:
------------------------------------
Title:
Date:
----------------------------------
276
EXHIBIT L TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF SWING LINE LOAN PARTICIPATION CERTIFICATE]
SWING LINE LOAN PARTICIPATION CERTIFICATE
[Name of Lender]
__________________________________
__________________________________
__________________________________
Dear Sirs:
Pursuant to subsection 3.12(d) of the Credit and Guarantee
Agreement, dated as of ______________, 1996 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among [Young &
Rubicam Holdings Inc., a New York corporation,] [Young & Rubicam Inc., a New
York corporation,] Young & Rubicam Inc., a Delaware corporation, Young & Rubicam
L.P., a Delaware limited partnership, the Subsidiary Borrowers (as defined
therein) from time to time parties thereto, the several banks and other
financial institutions from time to time parties thereto (the "Lenders"), Bank
of America National Trust and Savings Association, a national banking
association, as Administrative Agent for the Lenders and Bank of America
International Limited, a bank organized under the laws of England, as European
Payment Agent, the undersigned, as Swing Line Lender (as defined in the Credit
Agreement) under the Credit Agreement, hereby acknowledges receipt from you on
the date hereof of _______________ DOLLARS ($____________) as payment for the
purchase of a participating interest in the following Swing Line Loan (as
defined in the Credit Agreement):
Date of Swing Line Loan:
_____________________________________
Principal Amount of Swing Line
Loan Participating Interest:
$____________________________________
Very truly yours,
BANK OF AMERICA (ILLINOIS)
By:
--------------------------------
Title:
277
EXHIBIT M TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF REVOLVING NOTE]
REVOLVING NOTE
$_________________ New York, New York
_____________ __, 1996
FOR VALUE RECEIVED, the undersigned, YOUNG & RUBICAM HOLDINGS INC.,
a New York corporation ("Y&R Holdings"), YOUNG & RUBICAM INC., a New York
corporation ("Y&R Inc. (New York)"), YOUNG & RUBICAM INC., a Delaware
corporation ("Y&R Inc. (Delaware)"), and YOUNG & RUBICAM L.P., a Delaware
limited partnership ("Y&R LP"; collectively with Y&R Holdings , Y&R Inc. (New
York) and Y&R Inc. (Delaware), the "Parent Borrowers"), hereby, jointly and
severally, unconditionally promise to pay to the order of
___________________________ (the "Lender"), at the office of Bank of America
National Trust and Savings Association located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of America and
in immediately available funds on the Termination Date the principal amount of
________________ DOLLARS ($___________), or, if less, the aggregate unpaid
principal amount of all Revolving Loans of the Lender made to the Parent
Borrowers pursuant to subsection 3.1 of the Credit Agreement (as defined below).
The Parent Borrowers further, jointly and severally, agree to pay interest in
like money at such office on the unpaid principal amount hereof from time to
time outstanding at the rates and on the dates specified in subsections 5.8 and
5.11 of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type, currency and amount of
each Revolving Loan of the Lender and the date and amount of each payment or
prepayment of principal thereof, each continuation thereof as the same Type in
accordance with subsection 5.6 of the Credit Agreement, each conversion of all
or a portion thereof to another Type in accordance with subsection 5.6 of the
Credit Agreement and, in the case of Eurodollar Loans and Revolving Offshore
Loans, the length of each Interest Period with respect thereto. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement (or any error
therein) shall not affect the obligations of the Parent Borrowers in respect of
any Revolving Loan.
This Note (a) is one of the Revolving Notes referred to in the
Credit and Guarantee Agreement, dated as of December __, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Parent Borrowers, the Subsidiary Borrowers (as defined in the Credit
Agreement) from time to time parties thereto, the Lender, the several other
banks and financial institutions from time to time parties thereto (together
with the Lender, the "Lenders"), Bank of America National Trust and Savings
Association, a national banking association, as Administrative Agent (as defined
in the Credit Agreement) for the Lenders and Bank of America International
Limited, a bank organized under the laws of England, as European Payment Agent,
(b) is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as
278
2
provided in the Credit Agreement. This Note is secured and guaranteed as
provided in the Loan Documents. Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security interest has
been granted, the nature and extent of the security and the guarantees, the
terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
YOUNG & RUBICAM HOLDINGS INC.
By:
--------------------------------
Title:
YOUNG & RUBICAM INC., a New York corporation
By:
--------------------------------
Title:
YOUNG & RUBICAM INC., a Delaware corporation
By:
--------------------------------
Title:
YOUNG & RUBICAM L.P.
By: YOUNG & RUBICAM INC., its General Partner
By:
--------------------------------
Title:
279
Schedule A
to Revolving Note
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
------------------------------------------------------------------------------------------------------------------------------------
Amount of Base Rate
Date Amount of Base Amount Converted to Amount of Principal of Loans Converted to Unpaid Principal Balance Notation
Rate Loans Base Rate Loans Base Rate Loans Repaid Eurodollar Loans of Base Rate Loans Made By
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
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280
YOUNG & RUBICAM L.P.
By: YOUNG & RUBICAM INC., its General Partner
By
-------------------------------------------
Title:
281
Schedule B
to Revolving Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
------------------------------------------------------------------------------------------------------------------------------------
Interest Period and Amount of Principal Amount of Eurodollar Unpaid Principal
Date Amount of Amount Converted Eurodollar Rate with of Eurodollar Loans Converted to Balance of Notation
Eurodollar Loans to Eurodollar Loans Respect Thereto Loans Repaid Base Rate Loans Eurodollar Loans Made By
------------------------------------------------------------------------------------------------------------------------------------
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282
Schedule C
to Revolving Note
LOANS, CONTINUATIONS AND REPAYMENTS OF REVOLVING OFFSHORE LOANS
-----------------------------------------------------------------------------------------------------------------------------
Date Amount and Currency Interest Period and Amount of Principal
of Revolving Revolving Offshore Rate of Revolving Offshore Unpaid Principal Balance of Notation
Offshore Loans with Respect Thereto Loans Repaid Revolving Offshore Loans Made By
-----------------------------------------------------------------------------------------------------------------------------
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283
EXHIBIT N TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF TERM NOTE]
TERM NOTE
$______________________ New York, New York
___________ __, 1996
FOR VALUE RECEIVED, the undersigned, YOUNG & RUBICAM HOLDINGS INC.,
a New York corporation ("Y&R Holdings"), YOUNG & RUBICAM INC., a New York
corporation ("Y&R Inc. (New York)"), YOUNG & RUBICAM INC., a Delaware
corporation ("Y&R Inc. (Delaware)"), and YOUNG & RUBICAM L.P., a Delaware
limited partnership ("Y&R LP"; collectively with Y&R Holdings, Y&R Inc. (New
York) and Y&R Inc. (Delaware), the "Parent Borrowers"), hereby, jointly and
severally, unconditionally promise to pay to the order of
____________________________________ (the "Lender"), at the office of Bank of
America National Trust and Savings Association located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of America
and in immediately available funds, the principal amount of _____________
DOLLARS ($________), or, if less, the unpaid principal amount of the Term Loans
of the Lender made to the Parent Borrowers pursuant to subsection 2.1 of the
Credit Agreement (as hereinafter defined). The principal amount of this Note
shall be payable in the amounts and on the dates specified in subsection 5.3(a)
of the Credit Agreement. The Parent Borrowers, further, jointly and severally,
agree to pay interest in like money at such office on the unpaid principal
amount hereof from time to time outstanding at the rates and on the dates
specified in subsections 5.8 and 5.11 of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each Term
Loan of the Lender and the date and amount of each payment or prepayment of
principal with respect thereto, each conversion of all or a portion thereof to
another Type, each continuation of all or a portion thereof as the same Type
and, in the case of Eurodollar Loans, the length of each Interest Period with
respect thereto. Each such endorsement shall constitute prima facie evidence of
the accuracy of the information endorsed. The failure to make any such
endorsement (or any error therein) shall not affect the obligations of the
Parent Borrowers in respect of any Term Loan.
This Note (a) is one of the Term Notes referred to in the Credit and
Guarantee Agreement, dated as of December __, 1996 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the Parent
Borrowers, the Subsidiary Borrowers (as defined in the Credit Agreement) from
time to time parties to thereto, the Lender, the several other banks and
financial institutions from time to time parties thereto (together with the
Lender, the "Lenders"), Bank of America National Trust and Savings Association,
a national banking association, as Administrative Agent (as defined in the
Credit Agreement) for the Lenders and Bank of America International Limited, a
bank organized under the laws of England, as European Payment Agent, (b) is
284
2
subject to the provisions of the Credit Agreement and (c) is subject to optional
and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
YOUNG & RUBICAM HOLDINGS INC.
By:
--------------------------------
Title:
YOUNG & RUBICAM INC., a New York corporation
By:
--------------------------------
Title:
YOUNG & RUBICAM INC., a Delaware corporation
By:
--------------------------------
Title:
YOUNG & RUBICAM L.P.
285
3
By: YOUNG & RUBICAM INC., its General Partner
By:
--------------------------------
Title:
286
Schedule A
to Term Note
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
------------------------------------------------------------------------------------------------------------------------------------
Amount of Base Rate
Date Amount of Base Amount Converted to Amount of Principal of Loans Converted to Unpaid Principal Balance Notation
Rate Loans Base Rate Loans Base Rate Loans Repaid Eurodollar Loans of Base Rate Loans Made By
------------------------------------------------------------------------------------------------------------------------------------
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287
Schedule B
to Term Loan Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
------------------------------------------------------------------------------------------------------------------------------------
Interest Period and Amount of Principal Amount of Eurodollar Unpaid Principal
Date Amount of Amount Converted Eurodollar Rate with of Eurodollar Loans Converted to Balance of Notation
Eurodollar Loans to Eurodollar Loans Respect Thereto Loans Repaid Base Rate Loans Eurodollar Loans Made By
------------------------------------------------------------------------------------------------------------------------------------
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288
EXHIBIT O TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF SWING LINE NOTE]
SWING LINE NOTE
New York, New York
$20,000,000.00 __________ __, 1996
FOR VALUE RECEIVED, the undersigned, YOUNG & RUBICAM HOLDINGS INC.,
a New York corporation ("Y&R Holdings"), YOUNG & RUBICAM INC., a New York
corporation ("Y&R Inc. (New York)"), YOUNG & RUBICAM INC., a Delaware
corporation ("Y&R Inc. (Delaware)"), and YOUNG & RUBICAM L.P., a Delaware
limited partnership ("Y&R LP"; collectively with Y&R Holdings, Y&R Inc. (New
York) and Y&R Inc. (Delaware), the "Parent Borrowers"), hereby, jointly and
severally, unconditionally promise to pay to the order of
____________________________________ (the "Swing Line Lender"), at the office of
Bank of America National Trust and Savings Association located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of
America and in immediately available funds on the Termination Date the principal
amount of TWENTY MILLION DOLLARS ($20,000,000.00) or, if less, the aggregate
unpaid principal amount of the Swing Line Loans of the Swing Line Lender made to
the Parent Borrowers pursuant to subsection 3.11 of the Credit Agreement (as
hereinafter defined). The Parent Borrowers further, jointly and severally, agree
to pay interest in like money at said office on the unpaid principal amount of
Swing Line Loans from time to time outstanding at the rates and on the dates
specified in subsections 5.8 and 5.11 of the Credit Agreement. Unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement.
The holder of this Note is authorized to endorse on the schedule
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date and amount of each Swing Line
Loan of the Swing Line Lender and the date and amount of each payment or
prepayment of principal thereof. Each such endorsement shall constitute prima
facie evidence of the accuracy of the information endorsed. The failure to make
any such endorsement (or any error therein) shall not affect the obligations of
the Parent Borrowers in respect of any Swing Line Loan.
This Note (a) is the Swing Line Note referred to in the Credit and
Guarantee Agreement, dated as of December ___, 1996 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Parent Borrowers, the Subsidiary Borrowers (as defined in the Credit
Agreement) from time to time parties thereto, the Swing Line Lender, the several
other banks and financial institutions from time to time parties thereto
(together with the Swing Line Lender, the "Lenders"), Bank of America National
Trust and Savings Association, a national banking association, as Administrative
Agent (as defined in the Credit Agreement) for the Lenders, Bank of America
International Limited, a bank organized under the laws of England, as European
Payment Agent, (b) is subject to the provisions of the Credit Agreement and (c)
is subject to optional and mandatory prepayment in whole or in part as provided
in the Credit Agreement. This Note is secured and guaranteed as provided in the
Loan Documents. Reference is hereby made to the Loan Documents for a description
of the properties and assets in which a security interest has been granted, the
nature and
289
2
extent of the security and the guarantees, the terms and conditions upon which
the security interests and each guarantee were granted and the rights of the
holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
YOUNG & RUBICAM HOLDINGS INC.
By:
-----------------------------------
Title:
YOUNG & RUBICAM INC., a New York corporation
By:
-----------------------------------
Title:
YOUNG & RUBICAM INC., a Delaware corporation
By:
-----------------------------------
Title:
290
3
YOUNG & RUBICAM L.P.
By: YOUNG & RUBICAM INC., its General Partner
By:
-----------------------------------
Title:
291
Schedule to
Swing Line Note
LOANS AND REPAYMENTS
===============================================================================================
Date Amount of Swing Line Amount of Swing Line Unpaid Principal Balance of Notation Made By
Loans Made Loans Repaid Swing Line Loans
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
===============================================================================================
292
EXHIBIT P TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF FRONTED LOAN NOTE]
FRONTED LOAN NOTE
[Commitment Amount in
Applicable Foreign Currency] __________ __, ____
FOR VALUE RECEIVED, the undersigned, [NAME OF SUBSIDIARY BORROWER],
a _______________ organized under the laws of ________________ (the "Subsidiary
Borrower"), unconditionally promises to pay to the order of
_____________________________ (the "Fronting Lender"), at the Fronting Lender's
Payment Office located at ________________________, in lawful money of the
[Jurisdiction of Applicable Foreign Currency] and in immediately available funds
on the ________________________________, the principal amount of [Commitment
Amount in Applicable Foreign Currency] (_________________.__) or, if less, the
aggregate unpaid principal amount of the Fronted Offshore Loans of the Fronting
Lender made to the Subsidiary Borrower pursuant to subsection 4.1 of the Credit
Agreement (as hereinafter defined). The Subsidiary Borrower further agrees to
pay interest in like money at said Fronting Lender's Payment Office on the
unpaid principal amount of each Fronted Offshore Loan from time to time
outstanding at the rates and on the dates specified in subsections 5.8 and 5.11
of the Credit Agreement. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
The holder of this Note is authorized to endorse on the schedule
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, currency and amount of each
Fronted Offshore Loan of the Fronting Lender and the date and amount of each
payment or prepayment of principal thereof, each continuation thereof as the
same Type in accordance with subsection 5.6 of the Credit Agreement, and the
Cost of Funds and the length of each Interest Period (if any) with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
(or any error therein) shall not affect the obligations of the Subsidiary
Borrower in respect of any Fronted Offshore Loan.
This Note (a) is one of the Fronted Loan Notes referred to in the
Credit and Guarantee Agreement, dated as of December __, 1996 (as the same may
be amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Young & Rubicam Holdings Inc., a New York corporation ("Y&R
Holdings"), Young & Rubicam Inc., a New York corporation ("Y&R Inc. (New
York)"), Young & Rubicam Inc., a Delaware corporation ("Y&R Inc. (Delaware)")
and Young & Rubicam L.P., a Delaware limited partnership ("Y&R LP"; collectively
with Y&R Holdings, Y&R Inc. (New York) and Y&R Inc. (Delaware), the "Parent
Borrowers"), the Subsidiary Borrowers (as defined in the Credit Agreement) from
time to time parties thereto, the Fronting Lender, the several other banks and
financial institutions from time to time parties thereto (together with the
Fronting Lender, the "Lenders"), Bank of America National Trust and Savings
Association, a national banking association, as Administrative Agent (as defined
in the Credit Agreement) for the Lenders, and Bank of America International
Limited, a bank organized under the laws of England, as European Payment Agent,
(b) is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and
293
2
guaranteed as provided in the Loan Documents. Reference is hereby made to the
Loan Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
the guarantees, the terms and conditions upon which the security interests and
each guarantee were granted and the rights of the holder of this Note in respect
thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[NAME OF SUBSIDIARY BORROWER]
By:
----------------------------------
Title:
294
Schedule To
Fronted Loan Note
LOANS, CONTINUATIONS AND REPAYMENTS OF FRONTED OFFSHORE LOANS
-----------------------------------------------------------------------------------------------------------------------------------
Date Amount and Currency of Interest Period (if any) and Cost Amount of Principal of Unpaid Principal Balance of Notation
Fronted Offshore Loans of Funds with Respect Thereto Fronted Offshore Loans Repaid Fronted Offshore Loans Made By
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
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295
EXHIBIT Q TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF BORROWER CLOSING CERTIFICATE]
BORROWER CLOSING CERTIFICATE
Pursuant to subsections 7.1(g), 7.1(h), 7.1(i) and 7.1(l) of the
Credit and Guarantee Agreement, dated as of _____________, 1996 (the "Credit
Agreement"), among Young & Rubicam Holdings Inc., a New York corporation [(the
"Parent Borrower")], Young & Rubicam Inc., a New York corporation [(the "Parent
Borrower")], Young & Rubicam Inc., a Delaware corporation [(the "Parent
Borrower")], and Young & Rubicam L.P., a Delaware limited partnership [(the
"Parent Borrower")], the Subsidiary Borrowers (as defined in the Credit
Agreement) from time to time parties thereto, the several banks and other
financial institutions from time to time parties thereto (the "Lenders"), Bank
of America National Trust and Savings Association, a national banking
association, as Administrative Agent (as defined in the Credit Agreement) for
the Lenders, and Bank of America International Limited, a bank organized under
the laws of England, as European Payment Agent, the undersigned,
____________________ of [the General Partner of] the Parent Borrower, hereby
certifies as follows:
1. The representations and warranties of the Parent Borrower set
forth in the Credit Agreement and each of the other Loan Documents to
which it is a party or which are contained in any certificate, document or
financial or other statement furnished pursuant to or in connection with
the Credit Agreement or any Loan Document are true and correct on and as
of the date hereof with the same effect as if made on the date hereof,
except for representations and warranties expressly stated to relate to a
specific earlier date, in which case such representations and warranties
are true and correct as of such earlier date;
2. No Default or Event of Default has occurred and is continuing as
of the date hereof or will occur after giving effect to the making of the
Loans and the issuance of the Letters of Credit requested to be made
and/or issued on the date hereof or the consummation of each of the
transactions contemplated by the Loan Documents; and
3. _________________ is and at all times since ________________,
1996, has been the duly elected and qualified [Assistant] Secretary of
[the General Partner of] the Parent Borrower and the signature set forth
on the signature line for such officer below is such officer's true and
genuine signature;
and the undersigned [Assistant] Secretary of [the General Partner of] the Parent
Borrower hereby certifies as follows:
4. There are no liquidation or dissolution proceedings pending or to
the knowledge of the [Assistant] Secretary of [the General Partner of] the
Parent Borrower threatened against the Parent Borrower or any of its
Subsidiaries, nor has any other event occurred affecting or threatening
the corporate existence of the Parent Borrower or any of its Subsidiaries;
5. The Parent Borrower is a _________________ duly organized,
validly existing and in good standing under the laws of _______________;
296
2
6. (a) Attached hereto as Exhibit A is a true and complete copy of
resolutions duly adopted by the Board of Directors of [the General Partner
of] the Parent Borrower on __________ __, 1996; such resolutions have not
in any way been amended, modified, revoked or rescinded and have been in
full force and effect since their adoption to and including the date
hereof and are now in full force and effect; such resolutions are the only
corporate proceedings of [the General Partner of] the Parent Borrower now
in force relating to or affecting the matters referred to therein;
(b) attached hereto as Exhibit B is a true and complete copy of the
Bylaws of [the General Partner of] the Parent Borrower as in effect at all
times since __________ __, 19__, to and including the date hereof; and
(c) attached hereto as Exhibit C is a true and complete copy of the
Certificate of Incorporation of [the General Partner of] the Parent
Borrower as in effect at all times since __________ __, 19__, to and
including the date hereof; and
[(d) attached hereto as Exhibit D is a true and complete copy of
[the Certificate of Limited Partnership and the Partnership Agreement] of
the Parent Borrower, together with all amendments, supplements and other
modifications thereto; and]
7. The following persons are now duly elected and qualified officers
of [the General Partner of] the Parent Borrower, holding the offices
indicated next to their respective names below, and such officers have
held such offices with [the General Partner of] the Parent Borrower at all
times since __________ __, 19__, to and including the date hereof, and the
signatures appearing opposite their respective names below are the true
and genuine signatures of such officers, and each of such officers is duly
authorized to execute and deliver on behalf of the Parent Borrower, the
Credit Agreement and the other Loan Documents to which it is a party and
any certificate or other document to be delivered by the Parent Borrower
pursuant to the Credit Agreement or any such Loan Document:
Name Office Signature
[ ] [ ] ---------------
[ ] [ ] ---------------
Unless otherwise defined herein, capitalized terms which are defined
in the Credit Agreement and used herein are so used as so defined.
297
3
IN WITNESS WHEREOF, the undersigned have hereunto set our names.
[NAME OF PARENT BORROWER] [NAME OF PARENT BORROWER]
By: By:
----------------------------- -----------------------------
Name: Name:
Title: Title:
Date: _____________, 1996
298
EXHIBIT S TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF COMPLIANCE CERTIFICATE]
Pursuant to subsection 8.2(b) of the Credit and Guarantee Agreement,
dated as of December ___________, 1996, among [Young & Rubicam Holdings Inc., a
New York corporation ("Y&R Holdings"),] [Young & Rubicam Inc., a New York
corporation ("Y&R Inc. (New York)"),] Young & Rubicam Inc., a Delaware
corporation ("Y&R Inc. (Delaware)"), Young & Rubicam L.P., a Delaware limited
partnership ("Y&R LP"; collectively with [Y&R Holdings,] [Y&R Inc. (New York)]
and Y&R (Delaware), the "Parent Borrowers"), the Subsidiary Borrowers (as
defined therein; collectively with the Parent Borrowers, the "Borrowers") from
time to time parties to the Credit Agreement, the several banks and other
financial institutions from time to time parties to the Credit Agreement
(collectively, the "Lenders"; individually, a "Lender"), Bank of America
National Trust and Savings Association, a national banking association, as
Administrative Agent (as hereinafter defined) for the Lenders, and Bank of
America International Limited, a bank organized under the laws of England, as
European Payment Agent (in such capacity, the "European Payment Agent"), the
undersigned, ____________, the [Title] of the Company, as defined in the Credit
Agreement, does hereby certify on behalf of the Company that
(i) to the best of the undersigned's knowledge, during the period from
[________________] to [______________]:
(A) no Subsidiary has been formed or acquired (or, if any such
Subsidiary has been formed or acquired, the Borrowers have
complied with the requirements of subsection 8.10 of the
Credit Agreement with respect thereto),
(B) no Borrower nor any of their Domestic Subsidiaries has changed
its name, its principal place of business, its chief executive
office or the location of any material item of tangible
Collateral without complying with the requirements of the
Credit Agreement and the Security Documents with respect
thereto,
(C) each Borrower has observed or performed all of its covenants
and other agreements, and satisfied every condition, contained
in the Credit Agreement and the other Loan Documents to be
observed, performed or satisfied by it, and
(D) no Default or Event of Default has occurred [except
___________]; and
(ii) as of the date of the financial statements being delivered in
connection herewith, the Company was in compliance with the
covenants set forth in subsection 9.1 and subsection 9.7(ii) of the
Credit Agreement and the calculations of such covenant compliance
set forth on Annex A hereto are based upon such financial statements
and are true and correct [; and]
299
2
[(iii) the Excess Cash Flow for the fiscal year ending [______] was
$_________ and the calculations to support the determination of the
amount of such Excess Cash Flow for such period set forth on Annex A
hereto are based upon such financial statements and are true and
correct;
(iv) the aggregate Restricted Payments made pursuant to subsection
9.7(ii) during the fiscal year ending [_________] were $____________
and the calculations to support the determination of the amount of
such Restricted Payments for such period set forth on Annex A hereto
are true and correct; and
(v) the Capital Expenditures of the Borrowers and their respective
Subsidiaries for the fiscal year ending [__________] were
$__________ and the calculations to support the determination of the
amount of such Capital Expenditures set forth on Annex A hereto are
true and correct.]
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate as of the day and year set forth below.
[COMPANY]
By:
Title:
Date:
300
ANNEX A TO
COMPLIANCE CERTIFICATE
I. Subsection 9.1 - Financial Covenants
A. Maintenance of Net Worth
1. Consolidated Net Worth as of [________] ("Compliance Date Net Worth"),
calculated as follows:
Shareholders' Equity calculated in conformity with
GAAP: ___________
Adjustment to remove effect of non-cash compensation
charges after the Closing Date (specify whether
adjustment is negative or positive): ___________
Adjustment to remove effect of any charges or losses
relating to the sale of the New York Real Property
(specify whether adjustment is negative or positive): ___________
Adjustment to remove effect of any foreign currency
translation adjustments (specify whether adjustment
is negative or positive): ___________
Adjustment to remove effect of pension plan
liabilities (specify whether adjustment is negative
or positive): ___________
Compliance Date Consolidated Net Worth: ___________
2. Covenant level for Consolidated Net Worth ("Covenant Level Net
Worth"), calculated as follows:
Initial Consolidated Net Worth (as of 3/31/1997)
[Note: Insert 85% of such Consolidated Net Worth, if
such Consolidated Net Worth is positive and 115% of
such Consolidated Net Worth, if such Net Worth is
negative]: ___________
PLUS 50% of Consolidated Net Income for each complete
fiscal quarter of the Company (commencing with the
fiscal quarter ending June 30, 1997) for which
Consolidated Net Income is positive as set forth
below: ___________
[Insert details regarding Consolidated Net Income for
each such quarter]
______
______
Covenant Level Net Worth: ___________
--------------------------------------------------------------------------------
Covenant: Compliance Date Net Worth must be greater than Covenant Level Net
Worth. [The Company is in compliance with the covenant.]
--------------------------------------------------------------------------------
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B. Interest Coverage
1. EBITDA for four quarters ending [________] (the "Compliance Period"):
Consolidated Net Income for the Compliance Period: ___________
Adjustments in respect of Non-Operating Gains or
Losses (specify whether adjustment is positive or
negative): ___________
PLUS Consolidated Interest Expense for Compliance
Period to the extent deducted in determining
Consolidated Net Income: ___________
PLUS Consolidated provision for income taxes for
Compliance Period to the extent deducted in
determining Consolidated Net Income: ___________
PLUS Consolidated depreciation and amortization
expense for Compliance Period to the extent deducted
in determining Consolidated Net Income: ___________
PLUS foreign exchange non-cash losses associated with
hyperinflationary countries to the extent deducted in
determining Consolidated Net Income: ___________
PLUS Consolidated non-cash compensation expenses
attributable to stock, stock options, restricted
stock, and Related Equity Securities to the extent
deducted in determining Consolidated Net Income: ___________
PLUS Consolidated cash compensation expenses
attributable to repurchases of stock, stock options,
restricted stock and Related Equity Securities to the
extent deducted in determining Consolidated Net
Income: ___________
PLUS Consolidated expenses or reserves directly
associated with the Recapitalization to the extent
deducted in determining Consolidated Net Income: ___________
PLUS any amounts in respect of the minority interest
of any other Person in such Person for Compliance
Period to the extent deducted in determining
Consolidated Net Income: ___________
PLUS expenses or reserves associated with (1) the
sale of the New York Real Property, including the
relocation or consolidation of individuals and
offices located in New York City in connection with,
or in anticipation of, such sale, or (2) the New York
Real Estate Consolidation including in each case all
expenses of renovating office space) to the extent
deducted in determining Consolidated Net Income: ___________
PLUS EBITDA for the Compliance Period of any other
Person which is not wholly-owned by such Person, but
which such Person reports on a consolidated basis
calculated in conformity with accordance with GAAP to
the extent deducted in determining Consolidated Net
Income: ___________
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PLUS equity losses from any other Person which is
partially but not wholly-owned by such Person and
which is not consolidated for the Compliance Period
to the extent deducted in determining Consolidated
Net Income: ___________
LESS foreign exchange non-cash gains associated
with hyperinflationary countries to the extent
added in determining Consolidated Net Income: ___________
LESS any amounts in respect of the minority
interest of any other Person in such Person for
the Compliance Period to the extent added in
determining Consolidated Net Income: ___________
LESS EBITDA for the Compliance Period of any other
Person which is not wholly-owned by such Person,
but which such Person reports on a consolidated
basis in accordance with GAAP to the extent added
in determining Consolidated Net Income: ___________
LESS equity gains from any other Person which is
partially but not wholly-owned by such Person and
which is not consolidated for the Compliance
Period in each case to the extent added in
determining Consolidated Net Income of such Person
for the Compliance Period: ___________
EBITDA:
[Note: To the extent Acquisitions or Divestitures are consummated
during the Compliance Period, EBITDA is to be adjusted to reflect such
events as if they occurred at the beginning of such period and a
detailed schedule should be attached describing such events and the
adjustments made.]
2. Proportionate EBITDA for the Compliance Period: ___________
EBITDA (see above):
PLUS the sum across all Persons which are partially
but not wholly-owned by the Company (or by any other
Person which is partially but not wholly owned by the
Company) of such Person's EBITDA, for the Compliance
Period, multiplied by the effective primary ownership
percentage held in such Person by the Company as of
[__________________] (calculated as set forth on
Schedule 1 hereto): ___________
Proportionate EBITDA: ___________
3. Consolidated Interest Expense for the Compliance Period: ___________
[Note: The Credit Agreement provides for the annualization of Interest
Expense for the first three Compliance Periods after the Closing Date]
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--------------------------------------------------------------------------------
Interest Coverage Ratio for the Compliance Period:
Proportionate EBITDA = ____________ = ____________
--------------------
Consolidated Interest Expense
Covenant: Interest Coverage Ratio for the Compliance Period must not be
less than __________ [insert the relevant ratio set forth in
subsection 9.1 of the Credit Agreement]. [The Company is in
compliance with the covenant.]
--------------------------------------------------------------------------------
[Note: To the extent Acquisitions or Divestitures are consummated during
the Compliance Period, Interest Expense is to be adjusted to reflect such
events as if they occurred at the beginning of such period and a detailed
schedule should be attached describing such events and the adjustments
made.]
C. Fixed Charge Coverage
1. Proportionate EBITDAR for the Compliance Period,
calculated as follows:
_. Proportionate EBITDA for the Compliance Period: _______________
PLUS the portion of Consolidated Rental Expense
which is the aggregate amount of fixed and
contingent rental expense of such Person for
the Compliance Period determined in accordance
with GAAP with respect to leases of real and
personal property, net of rental income from
any sublease arrangements: _______________
Proportionate EBITDAR: _______________
2. Fixed Charges for the Compliance Period,
calculated as follows:
Consolidated Interest Expense for the
Compliance Period: _______________
Consolidated Rental Expense for the Compliance
Period:
Aggregate amount of fixed and contingent
rental expense of such Person for the
Compliance Period determined in
accordance with GAAP with respect to
leases of real and personal property, net
of rental income from any sublease
arrangements: _______________
PLUS any cash payments resulting in a
reduction in the lease loss reserve in
respect of the New York Real Property: _______________
Consolidated Rental Expense: _______________
Scheduled Amortization of Term Loans for the
Compliance Period: _______________
Scheduled Amortization of Consolidated
Indebtedness for the Compliance Period, as
follows: _______________
[Insert details of amortization, describing in
each case the
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relevant Indebtedness] _______________
Fixed Charges: _______________
--------------------------------------------------------------------------------
Fixed Charge Coverage Ratio for the Compliance Period:
Proportionate EBITDAR = ____________ = ____________________
---------------------
Fixed Charges
Covenant: Fixed Charge Coverage Ratio for the Compliance Period must not
be less than __________ [insert the relevant ratio set forth
in subsection 9.1 of the Credit Agreement]. [The Company is in
compliance with the covenant.]
--------------------------------------------------------------------------------
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6
D. Debt Coverage
1. Consolidated Debt as of [________________]:
All indebtedness of such Person for borrowed
money or for the deferred purchase price of
property or services (other than current trade
liabilities incurred in the ordinary course of
business and payable in accordance with
customary practices, deferred rent and deferred
employee compensation incurred in the ordinary
course of business and Indebtedness permitted
under subsection 9.2(j) of the Credit
Agreement): _______________
PLUS any other indebtedness of such Person
which is evidenced by a note, bond, debenture
or similar instrument: _______________
PLUS all obligations of such Person under
Financing Leases: _______________
PLUS all obligations of such Person in respect
of letters of credit and acceptances issued or
created for the account of such Person: _______________
PLUS all liabilities of the types described
secured by any Lien on any property owned by
such Person even though such Person has not
assumed or otherwise become liable for the
payment thereof: _______________
PLUS all Guarantee Obligations of such Person
in respect of liabilities of the types
described above of any Person: _______________
Consolidated Debt: _______________
--------------------------------------------------------------------------------
Debt Coverage Ratio:
Consolidated Debt = ____________ = ____________________
--------------------
Proportionate EBITDA
Covenant: Debt Coverage Ratio for the Compliance Period must not be
greater than _____ [insert the relevant ratio set forth in
subsection 9.1 of the Credit Agreement]. [The Company is in
compliance with the covenant.]
--------------------------------------------------------------------------------
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[II. Subsection 5.4(f) - Excess Cash Flow
A. Excess Cash Flow for the fiscal year ending [_______________]:
EBITDA of the Company for such fiscal year (See above): ___________
PLUS the amount of any refund received by the Company
and its Subsidiaries during such fiscal year on
income taxes paid by the Company and its Subsidiaries
to the extent not included in EBITDA of the Company
for such fiscal year: ___________
PLUS cash dividends, cash interest and other similar
cash payments received by the Company during such
fiscal year in respect of investments to the extent
not included in EBITDA of the Company for such fiscal
year (including from all Persons which are partially
owned by the Company, but are not Subsidiaries): ___________
PLUS the sum across all Persons which are
Subsidiaries but are not wholly-owned by the Company,
or by any Subsidiary of the Company, of such Persons'
EBITDA for such fiscal year, multiplied by the
effective primary ownership percentage held in such
Person by the Company as of the end of such fiscal
year (See Schedule 1 attached hereto): ___________
PLUS extraordinary cash gains to the extent
subtracted or otherwise not included in EBITDA of the
Company for such fiscal year and only to the extent
not otherwise requiring a prepayment under subsection
5.4(e): ___________
PLUS pension expense deducted in calculating EBITDA
of the Company for such fiscal year: ___________
LESS the aggregate amount of capital expenditures
made by the Company and its Subsidiaries during
such fiscal year and not financed: ___________
LESS the aggregate amount of all reductions of the
Revolving Commitments (to the extent such
reductions are required by the terms of this
Agreement to be accompanied by prepayment of
Revolving Loans) or payments or prepayments of the
Term Loans during such fiscal year other than
pursuant to subsection 5.4(f): ___________
LESS the aggregate amount of payments of principal
in respect of any Indebtedness (other than under
this Agreement) permitted hereunder during such
fiscal year: ___________
LESS Consolidated Interest Expense of the Company
paid or payable in cash during such fiscal year: ___________
LESS the aggregate amount of cash used during such
fiscal year to pay fees described in subsection
5.1 and the fees and expenses incurred in
connection with the Recapitalization and the
financing thereof: ___________
LESS Consolidated provision for current income
taxes for such fiscal year: ___________
LESS extraordinary cash payments or losses by the
Company or any
307
8
of its Subsidiaries to the extent not subtracted
in the determination of EBITDA of the Company
for such fiscal year: ___________
LESS cash expenses of the Company or any of the
Subsidiaries during such fiscal year associated
with the New York Real Estate Consolidation: ___________
LESS the aggregate amount of cash used by the
Company or any of its Subsidiaries for Investments
which are permitted under Section 9.9(c), (d), (f)
and (g) made by the Company or any of its
Subsidiaries during such fiscal year: ___________
LESS the aggregate amount of cash used to make
Restricted Payments by the Company and its
Subsidiaries during such fiscal year which are
permitted pursuant to subsection 9.8: ___________
LESS cash pension contributions during such fiscal
year: ___________
LESS the amount of cash used to fund any payment
in respect of the matter described on Schedule
6.13 during such fiscal year (amounts deducted
pursuant to this clause (xii) shall not exceed
$25,000,000 in the aggregate for all fiscal
years): ___________
Excess Cash Flow: ___________
Mandatory Prepayment (50% of Excess Cash Flow): ___________]
[III. Subsection 9.7(ii) - Restricted Payments
The Restricted Payments made pursuant to subsection 9.7(ii)
during the fiscal year ending [_______] were as follows:
[insert details].]
[IV. Subsection 9.8 - Capital Expenditures
The Capital Expenditures of the Borrower and its Restricted
Subsidiaries pursuant to subsection 9.8 for the fiscal year
ending [__________] were as follows: [insert details].]
308
EXHIBIT T TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF ASSIGNMENT AND ACCEPTANCE]
Reference is made to the Credit and Guarantee Agreement, dated as of
___________ __, 1996 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among Young & Rubicam Holdings Inc., a New
York corporation ("Y&R Holdings"), Young & Rubicam Inc., a New York corporation
("Y&R Inc. (New York)"), Young & Rubicam Inc., a Delaware corporation ("Y&R Inc.
(Delaware)") and Young & Rubicam L.P., a Delaware limited partnership ("Y&R LP";
collectively with Y&R Holdings, Y&R Inc. (New York) and Y&R Inc. (Delaware), the
"Parent Borrowers"), the Subsidiary Borrowers (as defined in the Credit
Agreement) from time to time parties thereto, the several banks and other
financial institutions from time to time parties thereto (the "Lenders"), Bank
of America National Trust and Savings Association, a national banking
association, as Administrative Agent (as defined in the Credit Agreement) for
the Lenders, and Bank of America International Limited, a bank organized under
the laws of England, as European Payment Agent. Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement.
The Assignor identified on Schedule l hereto (the "Assignor") and
the Assignee identified on Schedule l hereto (the "Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the interest described in Schedule 1 hereto
(the "Assigned Interest") in and to the Assignor's rights and obligations under
the Credit Agreement with respect to those credit facilities contained in the
Credit Agreement as are set forth on Schedule 1 hereto (individually, an
"Assigned Facility"; collectively, the "Assigned Facilities"), in a principal
amount for each Assigned Facility as set forth on Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim, (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Parent Borrowers, any of their Subsidiaries or any
other obligor or the performance or observance by the Parent Borrower, any of
their Subsidiaries or any other obligor of any of their respective obligations
under the Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto, and (c) attaches any Notes held
by it evidencing the Assigned Facilities and (i) requests that the
Administrative Agent, upon request by the Assignee, exchange the attached Notes
for a new Note or Notes payable to the Assignee and (ii) if the Assignor has
retained any interest in the Assigned Facility, requests that the Administrative
Agent exchange the attached Notes for a new Note or Notes payable to the
Assignor, in each case in amounts which reflect the assignment being made hereby
(and after giving effect to any other assignments which have become effective on
the Effective Date).
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2
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance, (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to subsections 6.1 and 8.1 thereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance,
(c) agrees that it will, independently and without reliance upon the Assignor,
the Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto, (d) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
incidental thereto, and (e) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to subsection
5.14 of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be the
Effective Date of Assignment described in Schedule 1 hereto (the "Effective
Date"). Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance by it and recording by the
Administrative Agent pursuant to the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) [to the Assignor for amounts which have accrued to the Effective Date
and to the Assignee for amounts which have accrued subsequent to the Effective
Date] [to the Assignee whether such amounts have accrued prior to the Effective
Date or accrue subsequent to the Effective Date]. The Assignor and the Assignee
shall make all appropriate adjustments in payments by the Administrative Agent
for periods prior to the Effective Date or with respect to the making of this
assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
7. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
310
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
Name of Assignor: ______________________________________________
Name of Assignee: ______________________________________________
Effective Date of Assignment: __________________________________
Credit Principal Commitment Percentage
Facility Assigned Amount Assigned Assigned
--------------------- ------------------ ---------------------------------
$______ __.______%
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: By:
---------------------------------- ----------------------------------
Title: Title:
Accepted and Consented to: Consented to:
BANK OF AMERICA NATIONAL TRUST [NAME OF COMPANY]
AND SAVINGS ASSOCIATION, as
Administrative Agent
By: By:
---------------------------------- ----------------------------------
Title: Title:
[Consented to: [Consented to:
[NAME OF ISSUING BANK] [NAME OF FRONTING LENDER]
By: By:
---------------------------------- ----------------------------------
Title: Title: