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Exhibit 10.2
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GUARANTEE AND COLLATERAL AGREEMENT
made by
CIRCUIT RESEARCH LABS, INC.,
as Parent
CRL SYSTEMS, INC.,
as Borrower
and certain of their Subsidiaries
in favor of
▇▇▇▇▇, INC.,
as Lender
Dated as of May 31, 2000
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TABLE OF CONTENTS
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SECTION 1. DEFINED TERMS .................................................. 1
1.1 Definitions ....................................................... 1
1.2 Other Definitional Provisions ..................................... 5
SECTION 2. GUARANTEE ...................................................... 6
2.1 Guarantee ......................................................... 6
2.2 Right of Contribution ............................................. 6
2.3 No Subrogation .................................................... 7
2.4 Amendments, etc. with respect to the Borrower Obligations ......... 7
2.5 Guarantee Absolute and Unconditional .............................. 7
2.6 Reinstatement ..................................................... 8
2.7 Payments .......................................................... 8
SECTION 3. GRANT OF SECURITY INTEREST ..................................... 8
SECTION 4. REPRESENTATIONS AND WARRANTIES ................................. 9
4.1 Title; No Other Liens ............................................. 9
4.2 Perfected First Priority Liens .................................... 10
4.3 Chief Executive Office ............................................ 10
4.4 Inventory and Equipment ........................................... 10
4.5 Farm Products ..................................................... 10
4.6 Investment Property ............................................... 10
4.7 Receivables ....................................................... 10
4.8 Intellectual Property ............................................. 11
4.9 Vehicles .......................................................... 11
4.10 Parent Representations ............................................ 11
SECTION 5. COVENANTS ...................................................... 13
5.1 Delivery of Instruments, Certificated Securities and Chattel Paper 13
5.2 Maintenance of Insurance .......................................... 13
5.3 Payment of Obligations ............................................ 13
5.4 Maintenance of Perfected Security Interest; Further Documentation . 14
5.5 Changes in Locations, Name, etc ................................... 14
5.6 Notices ........................................................... 15
5.7 Investment Property ............................................... 15
5.8 Receivables ....................................................... 16
5.9 Intellectual Property ............................................. 16
5.10 Vehicles .......................................................... 17
5.11 Notation of Security Interests on Books and Records ............... 18
5.12 Landlord and Warehouseman Waivers ................................. 18
5.13 Financial Statements .............................................. 18
5.14 Mandatory Prepayment .............................................. 19
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SECTION 6. REMEDIAL PROVISIONS ............................................ 19
6.1 Certain Matters Relating to Receivables ........................... 19
6.2 Communications with Obligors; Grantors Remain Liable .............. 20
6.3 Pledged Stock ..................................................... 20
6.4 Proceeds to be Turned Over To Lender .............................. 21
6.5 Application of Proceeds ........................................... 21
6.6 Code and Other Remedies ........................................... 21
6.7 Registration Rights ............................................... 22
6.8 Waiver; Deficiency ................................................ 23
SECTION 7. THE LENDER ..................................................... 23
7.1 Lender's Appointment as Attorney-in-Fact, etc ..................... 24
7.2 Duty of Lender .................................................... 25
7.3 Execution of Financing Statements ................................. 25
SECTION 8. MISCELLANEOUS .................................................. 26
8.1 Amendments in Writing ............................................. 26
8.2 Notices ........................................................... 26
8.3 No Waiver by Course of Conduct; Cumulative Remedies ............... 26
8.4 Enforcement Expenses; Indemnification ............................. 26
8.5 Successors and Assigns ............................................ 27
8.6 Set-Off ........................................................... 27
8.7 Counterparts ...................................................... 27
8.8 Severability ...................................................... 27
8.9 Section Headings .................................................. 27
8.10 INTEGRATION ....................................................... 27
8.11 GOVERNING LAW ..................................................... 28
8.12 Submission To Jurisdiction; Waivers ............................... 28
8.13 Acknowledgments ................................................... 28
8.14 Additional Grantors and Security .................................. 29
8.15 Releases .......................................................... 30
8.16 WAIVER OF JURY TRIAL .............................................. 30
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SCHEDULES
Schedule 1 Notice Addresses
Schedule 2 Investment Property
Schedule 3 Perfection Matters
Schedule 4 Jurisdictions of Organization and Chief Executive Offices
Schedule 5 Inventory and Equipment Locations
Schedule 6 Intellectual Property
Schedule 7 Vehicles
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GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 31, 2000, made
by CIRCUIT RESEARCH LABS, INC., an Arizona corporation (the "Parent"), and each
of the signatories hereto (together with the Parent and any other entity that
may become a party hereto as provided herein, the "Grantors"), in favor of
▇▇▇▇▇, INC., a Delaware corporation (the "Lender"), pursuant to the Credit
Agreement dated as of even date herewith (as amended, supplemented, restated or
otherwise modified from time to time, the "Credit Agreement"), between CRL
SYSTEMS, INC., a Nevada corporation (the "Borrower"), and the Lender.
PRELIMINARY STATEMENTS
A. The Borrower and the Lender have entered into that certain Asset Sale
Agreement, dated as of even date herewith (as amended or modified, the "Asset
Sale Agreement"), pursuant to which the Borrower will acquire certain of the
Lender's assets.
B. The Borrower and the Lender have entered into the Credit Agreement.
C. Pursuant to the Asset Sale Agreement and the Credit Agreement, the
Lender has agreed to accept the Notes as partial payment by the Borrower for the
Assets (as defined in the Asset Sale Agreement).
D. The Borrower is a member of an affiliated group of companies that
includes each other Grantor.
E. The Borrower and the other Grantors are engaged in related businesses,
and each Grantor will derive substantial direct and indirect benefit from the
making by the Lender of the extensions of credit under the Credit Agreement.
F. It is a condition precedent to the obligation of the Lender to extend
credit under the Credit Agreement that the Grantors shall have executed and
delivered to the Lender this Guarantee and Collateral Agreement.
NOW, THEREFORE, in consideration of the premises and to induce the
Lender to enter into the Credit Agreement and to induce the Lender to make the
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Lender as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms are used herein as defined in the
New York UCC: Accounts, Certificated Security, Chattel Paper, Documents,
Equipment, Farm Products, Goods, Instruments and Inventory.
(b) The following terms shall have the following meanings:
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"Agreement": this Guarantee and Collateral Agreement, as the same
may be amended, supplemented, restated or otherwise modified from time to
time.
"Borrower Obligations": the collective reference to the unpaid
principal of and interest on the Notes and all other obligations and
liabilities of the Borrower (including, without limitation, interest
accruing at the then applicable rate provided in the Credit Agreement
after the maturity of the Notes 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 the Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, this Agreement, the other Loan Documents or any other document
made, delivered or given in connection with any of the foregoing, 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 Lender that are
required to be paid by the Borrower pursuant to the terms of any of the
foregoing agreements).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by the
Lender as provided in Section 6.1 or 6.4. Collateral Accounts may be
established at any financial institution designated by the Lender.
"Copyrights": (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof,
whether registered or unregistered and whether published or unpublished
(including, without limitation, those listed in Schedule 6), all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings
and applications in the United States Copyright Office, and (ii) the right
to obtain all renewals and extensions thereof.
"Copyright Licenses": all written agreements naming any Grantor as
licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights in all derivative works based upon any
Copyright, and all renewals and extensions thereof.
"Deposit Account": as defined in the Uniform Commercial Code of any
applicable jurisdiction and, in any event, including, without limitation,
the Collateral Accounts, the Lockbox Account, and any demand, time,
savings, passbook or like account maintained with a depositary
institution.
"Excluded Real Property": the real property located at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
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"Fixtures": all items of Equipment, whether now owned or hereafter
acquired, of any Grantor that become so related to particular real estate
that an interest in them arises under any real estate law applicable
thereto.
"Foreign Subsidiary": any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of any
Foreign Subsidiary.
"General Intangibles": all "general intangibles" as such term is
defined in Section 9-106 of the New York UCC and, in any event, including,
without limitation, with respect to any Grantor, all contracts,
agreements, instruments and indentures in any form, and portions thereof,
to which such Grantor is a party or under which such Grantor has any
right, title or interest or to which such Grantor or any property of such
Grantor is subject, as the same may from time to time be amended,
supplemented, restated or otherwise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to
become due to it thereunder or in connection therewith, (ii) all rights of
such Grantor to damages arising thereunder and (iii) all rights of such
Grantor to perform and to exercise all remedies thereunder.
"Guarantor Obligations": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2)
or any other Loan Document to which such Guarantor is a party, in each
case whether on account of guarantee obligations, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the Lender
that are required to be paid by such Guarantor pursuant to the terms of
this Agreement or any other Loan Document).
"Guarantors": the collective reference to each Grantor other than
the Borrower.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks and the Trademark Licenses
and all products, royalties and Proceeds thereof or received in connection
therewith and all claims and rights to ▇▇▇ at law or in equity for past,
present or future (i) infringement, dilution or other impairment thereof,
or (ii) injury to the goodwill associated with any Trademark or Trademark
License, including the right to receive all proceeds and damages from the
foregoing.
"Intercompany Note": any promissory note evidencing loans made by
any Grantor to the Parent or any of its Subsidiaries.
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"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-115 of the New
York UCC (other than any Foreign Subsidiary Voting Stock excluded from the
definition of "Pledged Stock") and (ii) whether or not constituting
"investment property" as so defined, all Pledged Notes and all Pledged
Stock.
"Issuers": the collective reference to each issuer of any Investment
Property.
"Lockbox Account": account number 73880 at the Lockbox Bank.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patents": (i) all letters patent, including, without limitation,
utility patents, design patents, industrial designs and utility model
registrations, of the United States, any other country or any political
subdivision thereof and all reissues and extensions thereof, including,
without limitation, those listed in Schedule 6, (ii) all applications for
letters patent of the United States or any other country and all
divisions, continuations and continuations-in-part thereof, including,
without limitation, those listed in Schedule 6 and (iii) all rights to
obtain any reissues, reexaminations or extensions of the foregoing.
"Patent License": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to make, use, sell, offer
to sell or import any invention covered in whole or in part by a Patent,
including, without limitation, those listed in Schedule 6, and all
renewals and extensions thereof.
"Pledged Notes": all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than promissory
notes issued in connection with extensions of trade credit by any Grantor
in the ordinary course of business).
"Pledged Stock": the shares of Capital Stock listed on Schedule 2,
together with any other shares, stock certificates, options or rights of
any nature whatsoever in respect of the Capital Stock of any Person that
may be issued or granted to, or held by, any Grantor while this Agreement
is in effect; provided that in no event shall more than 65% of the total
outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be
required to be pledged hereunder.
"Prime Rate": the rate of interest established from time to time by
Bank of America, N.A. as its prime rate.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the New York UCC and, in any event, shall include, without
limitation, all dividends or other
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income from the Investment Property, collections thereon or distributions
or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Securities Act": the Securities Act of 1933, as amended.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries"
in this Agreement shall refer to a Subsidiary or Subsidiaries of the
Parent.
"Trademarks": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, service marks,
logos, words, terms, names, symbols and devices and all combinations
thereof, and other source or business identifiers, and all goodwill of the
business connected with the use thereof and symbolized thereby, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in
any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof, or otherwise, and
all common law rights related thereto, including, without limitation,
those listed in Schedule 6, and (ii) the right to obtain all renewals and
extensions thereof.
"Trademark License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, those listed in Schedule 6, and
all renewals and extensions thereof.
"Vehicles": all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title law
of any state and, in any event including, without limitation, the vehicles
listed on Schedule 7 and all tires and other appurtenances to any of the
foregoing.
1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
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(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Lender and its
successors, indorsees, transferees and assigns, the prompt and complete payment
and performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full.
(e) No payment made by the Borrower, any of the Guarantors, any
other guarantor or any other Person or received or collected by the Lender from
the Borrower, any of the Guarantors, any other guarantor or any other Person by
virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Borrower Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Guarantor hereunder which shall, notwithstanding any
such payment (other than any payment made by such Guarantor in respect of the
Borrower Obligations or any payment received or collected from such Guarantor in
respect of the Borrower Obligations), remain liable for the Borrower Obligations
up to the maximum liability of such Guarantor hereunder until the Borrower
Obligations are paid in full.
2.2 Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The
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provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of any Guarantor to the Lender, and each Guarantor shall remain
liable to the Lender for the full amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Lender, no Guarantor shall be entitled to be subrogated to any of the rights
of the Lender against the Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by the Lender for the payment of
the Borrower Obligations, nor shall any Guarantor seek or be entitled to seek
any contribution or reimbursement from the Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Lender by the Borrower on account of the Borrower Obligations are paid in
full. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Borrower Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in trust for
the Lender, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Lender in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the Lender, if
required), to be applied against the Borrower Obligations, whether matured or
unmatured, in such order as the Lender may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Lender may be rescinded by the Lender and any of the
Borrower Obligations continued, and the Borrower Obligations, or the liability
of any other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Lender, and the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented,
restated or terminated, in whole or in part, as the Lender may deem advisable
from time to time, and any collateral security, guarantee or right of offset at
any time held by the Lender for the payment of the Borrower Obligations may be
sold, exchanged, waived, surrendered or released. The Lender shall have no
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Borrower Obligations or for the guarantee contained in this
Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by the Lender upon the
guarantee contained in this Section 2 or acceptance of the guarantee contained
in this Section 2; the Borrower Obligations, and any of them, shall conclusively
be deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in this Section 2;
and all dealings between the Borrower and any of the Guarantors, on the one
hand, and the Lender, on the other hand, likewise shall be conclusively presumed
to have been had or consummated in reliance upon the guarantee contained in this
Section 2. Each Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the
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Borrower or any of the Guarantors with respect to the Borrower Obligations. Each
Guarantor understands and agrees that the guarantee contained in this Section 2
shall be construed as a continuing, absolute and unconditional guarantee of
payment without regard to (a) the validity or enforceability of the Credit
Agreement or any other Loan Document, any of the Borrower Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the 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 Borrower or any other
Person against the Lender, or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Borrower or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, the Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Guarantor or any other
Person or against any collateral security or guarantee for the Borrower
Obligations or any right of offset with respect thereto, and any failure by the
Lender to make any such demand, to pursue such other rights or remedies or to
collect any payments from the Borrower, any other Guarantor or any other Person
or to realize upon any such collateral security or guarantee or to exercise any
such right of offset, or any release of the Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Lender against any Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by the Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the 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, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Lender without set-off or counterclaim in Dollars
at the office of the Lender located at c/o Harman International Industries, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Lender, and hereby
grants to the Lender, a security interest in, all of the following property now
owned or at any time hereafter acquired by such Grantor or in which such Grantor
now has or at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations,:
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(a) all Accounts;
(b) all Chattel Paper;
(c) all Deposit Accounts;
(d) all Documents;
(e) all Equipment;
(f) all Fixtures;
(g) all General Intangibles;
(h) all Goods;
(i) all Instruments;
(j) all Intellectual Property;
(k) all Inventory;
(l) all Investment Property;
(m) all Vehicles;
(n) all books and records, including, without limitation, all
computer disks, computer tapes and other computer records, pertaining to
the Collateral;
(o) all other property of any kind or character, tangible or
intangible, not otherwise described above, except for the Excluded Real
Property; and
(p) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into the Credit Agreement and to
induce the Lender to make the extensions of credit to the Borrower thereunder,
each Grantor hereby represents and warrants to the Lender that:
4.1 Title; No Other Liens. Except for the security interest granted
to the Lender pursuant to this Agreement and the other Liens permitted to exist
on the Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others. No financing
statement or other public notice with respect to all or any part of
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the Collateral is on file or of record in any public office, except such as have
been filed in favor of the Lender pursuant to this Agreement or as are permitted
by the Credit Agreement.
4.2 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 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Lender in completed and
duly executed form) will constitute valid perfected security interests in all of
the Collateral in favor of the Lender as collateral security for such Grantor's
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for unrecorded Liens permitted by the Credit
Agreement which have priority over the Liens on the Collateral by operation of
law.
4.3 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 4.
4.4 Inventory and Equipment. On the date hereof, the Inventory and
the Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.
4.5 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.6 Investment Property. (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Investment Property pledged by it hereunder, free
of any and all Liens or options in favor of, or claims of, any other Person,
except the security interest created by this Agreement.
4.7 Receivables. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Lender.
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(b) None of the obligors on any Receivables is a Governmental
Authority.
(c) The amounts represented by such Grantor to the Lender from time
to time as owing to such Grantor in respect of the Receivables will at such
times be accurate.
4.8 Intellectual Property. (a) Schedule 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, all Intellectual Property is valid,
subsisting, unexpired and enforceable, has not been abandoned and does not
infringe the intellectual property rights of any other Person.
(c) Except as set forth in Schedule 6, on the date hereof, none of
the Intellectual Property is the subject of any licensing or franchise
agreement.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property.
(e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual Property or such Grantor's ownership interest
therein or (ii) which, if adversely determined, would have a material adverse
effect on the value of any Intellectual Property.
4.9 Vehicles. Schedule 7 is a complete and correct list of all
Vehicles owned by such Grantor on the date hereof.
4.10 Parent Representations. In the case of the Parent:
(a) The Parent (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (iii) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (iv) 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 on the
business, condition (financial or otherwise), operations, prospects or property
of the Parent and its Subsidiaries taken as a whole.
(b) The Parent has the corporate power and authority, and the legal
right, to make, deliver and perform the Loan Documents to which it is a party
and has taken all necessary corporate action 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 execution, delivery, performance, validity or enforceability
of the Loan Documents to which the
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Parent 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 the
Parent. 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 the Parent enforceable against the Parent in accordance with its
terms, subject to the effects of bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, and general equitable principles (whether considered in a proceeding
in equity or at law).
(c) The execution, delivery and performance of the Loan Documents to
which the Parent is a party will not violate any Requirement of Law or
Contractual Obligation of the Parent 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 (other than pursuant to this Agreement).
(d) No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of the
Parent, threatened by or against the Parent or any of its Subsidiaries or
against any of its or their respective properties or revenues with respect to
any of the Loan Documents or any of the transactions contemplated hereby or
thereby.
(e) The Parent has good record and marketable title in fee simple
to, or a valid leasehold interest in, all its real property, and good title to,
or a valid leasehold interest in, all its other property, and none of such
property is subject to any Lien of any nature whatsoever except the Excluded
Real Property.
(f) The Parent has filed or caused to be filed all tax returns
which, to the knowledge of the Parent, 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 the Parent); no tax Lien has been filed,
and, to the knowledge of the Parent, no claim is being asserted, with respect to
any such tax, fee or other charge.
(g) The balance sheets of the Parent as at December 31, 1998 and
December 31, 1999 and the related statements of income and of cash flows for the
fiscal years ended on each such date, reported on by Deloitte & Touche LLP,
copies of which have heretofore been furnished to the Lender, are complete and
correct and present fairly the financial condition of the Parent as at such
dates, and the results of its operations and its cash flow for the fiscal years
then ended. The unaudited balance sheet of the Parent as at March 31, 2000 and
the related unaudited statement of income and of cash flow for the three-month
period ended on such date, certified by the President or Chief Financial Officer
of Parent, copies of which have heretofore been furnished to the Lender, are
complete and correct and present fairly the financial condition of the Parent as
at such date, and the results of its operations and its cash flow for the
three-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
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applied consistently throughout the periods involved (except as approved by such
accountants, and as disclosed therein). At the date of the most recent balance
sheet referred to above, the Parent had no material 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 or other financial derivative, which is not
reflected in the foregoing statements or in the notes thereto. During the period
from December 31, 1999, to and including the date hereof there has been no sale,
transfer or other disposition by the Parent 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
financial condition of the Parent at December 31, 1999 (except as contemplated
by the Asset Sale Agreement).
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Lender that, from and
after the date of this Agreement until the Obligations shall have been paid in
full:
5.1 Delivery of Instruments, Certificated Securities and Chattel
Paper. If any amount payable under or in connection with any of the Collateral
shall be or become evidenced by any Instrument, Certificated Security or Chattel
Paper, such Instrument, Certificated Security or Chattel Paper shall be
immediately delivered to the Lender, duly indorsed in a manner satisfactory to
the Lender, to be held as Collateral pursuant to this Agreement.
5.2 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory, Equipment and Vehicles against loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the Lender and (ii)
insuring such Grantor and the Lender against liability for personal injury and
property damage relating to such Inventory, Equipment and Vehicles, such
policies to be in such form and amounts and having such coverage as may be
reasonably satisfactory to the Lender.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Lender of written notice
thereof, (ii) name the Lender as insured party or loss payee, (iii) if
reasonably requested by the Lender, include a breach of warranty clause and (iv)
be reasonably satisfactory in all other respects to the Lender.
(c) The Borrower shall deliver to the Lender a report of a reputable
insurance broker with respect to such insurance substantially concurrently with
each delivery of the Borrower's audited annual financial statements and such
supplemental reports with respect thereto as the Lender may from time to time
reasonably request.
5.3 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation,
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claims for labor, materials and supplies) against or with respect to the
Collateral, except that no such charge need be paid if the amount or validity
thereof is currently being contested in good faith by appropriate proceedings,
reserves in conformity with GAAP with respect thereto have been provided on the
books of such Grantor and such proceedings could not reasonably be expected to
result in the sale, forfeiture or loss of any material portion of the Collateral
or any interest therein.
5.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.2 and shall defend such security interest and the
priority thereof against the claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Lender from time to time
statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith as the
Lender may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written request of
the Lender, and at the sole expense of such Grantor, such Grantor will promptly
and duly execute and deliver, and have recorded, such further instruments and
documents and take such further actions as the Lender 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, (i)
filing any financing or continuation statements under the Uniform Commercial
Code (or other similar laws) in effect in any jurisdiction with respect to the
security interests created hereby and (ii) in the case of Investment Property,
Deposit Accounts and any other relevant Collateral, taking any actions necessary
to enable the Lender to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.
5.5 Changes in Locations, Name, etc. Such Grantor will not, except
upon 15 days' prior written notice to the Lender and delivery to the Lender of
(a) all additional executed financing statements and other documents reasonably
requested by the Lender to maintain the validity, perfection and priority of the
security interests provided for herein and (b) if applicable, a written
supplement to Schedule 5 showing any additional location at which Inventory or
Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a
location other than those listed on Schedule 5;
(ii) change its jurisdiction of organization or the location of its
chief executive office or sole place of business from that referred to in
Section 4.3; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Lender in connection with
this Agreement would become misleading.
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5.6 Notices. Such Grantor will advise the Lender promptly, in
reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Lender to exercise any of its remedies
hereunder;
(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; and
(c) the occurrence of any Default or Event of Default.
5.7 Investment Property. (a) If such Grantor shall become entitled
to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Lender, hold the same in trust for the Lender and
deliver the same forthwith to the Lender in the exact form received, duly
indorsed by such Grantor to the Lender, if required, together with an undated
stock power covering such certificate duly executed in blank by such Grantor and
with, if the Lender so requests, signature guaranteed, to be held by the Lender,
subject to the terms hereof, as additional collateral security for the
Obligations. Any sums paid upon or in respect of the Investment Property upon
the liquidation or dissolution of any Issuer shall be paid over to the Lender to
be held by it hereunder as additional collateral security for the Obligations,
and in case any distribution of capital shall be made on or in respect of the
Investment Property or any property shall be distributed upon or with respect to
the Investment Property pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Lender, be delivered to the Lender 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 Investment Property
shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Lender, hold such money or property in
trust for the Lender, segregated from other funds of such Grantor, as additional
collateral security for the Obligations.
(b) Without the prior written consent of the Lender, such Grantor
will not (i) vote to enable, or take any other action to permit, any Issuer to
issue any stock or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock or other equity securities of any nature of any Issuer, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Investment Property or Proceeds thereof (except pursuant to a
transaction expressly permitted by the Credit Agreement), (iii) create, incur or
permit to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Investment Property or Proceeds thereof, or any interest
therein, except for the security interests created by this Agreement or (iv)
enter into any
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agreement or undertaking restricting the right or ability of such Grantor or the
Lender to sell, assign or transfer any of the Investment Property or Proceeds
thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to the
Investment Property issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Lender promptly in writing
of the occurrence of any of the events described in Section 5.7(a) with respect
to the Investment Property issued by it and (iii) the terms of Sections 6.3(c)
and 6.7 shall apply to it, mutatis mutandis, with respect to all actions that
may be required of it pursuant to Section 6.3(c) or 6.7 with respect to the
Investment Property issued by it.
5.8 Receivables. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the Lender a copy of each material
demand, notice or document received by it that questions or calls into doubt the
validity or enforceability of more than 5% of the aggregate amount of the then
outstanding Receivables.
5.9 Intellectual Property. (a) Such Grantor (either itself or
through licensees approved by the Lender) will (i) continue to use each material
Trademark on each and every trademark class of goods applicable to its current
line as reflected in its current catalogs, brochures and price lists in order to
maintain such Trademark in full force free from any claim of abandonment for
non-use, (ii) maintain as in the past the quality of products and services
offered under such Trademark, (iii) use such Trademark with the appropriate
notice of registration and all other notices and legends required by applicable
Requirements of Law, (iv) not adopt or use any ▇▇▇▇ which is confusingly similar
or a colorable imitation of such Trademark unless the Lender shall obtain a
perfected security interest in such ▇▇▇▇ pursuant to this Agreement, and (v) not
(and not permit any licensee or sublicensee approved by the Lender thereof to)
do any act or knowingly omit to do any act whereby such Trademark may become
invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees approved by the
Lender) will not do any act, or omit to do any act, whereby any material Patent
may become forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees approved by the
Lender) (i) will employ each material Copyright and (ii) will not (and will not
permit any licensee or sublicensee thereof approved by the Lender to) do any act
or knowingly omit to do any act whereby any material portion of the Copyrights
may become invalidated or otherwise impaired. Such Grantor will not (either
itself or through licensees approved by the Lender) do any act whereby any
material portion of the Copyrights may fall into the public domain.
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(d) Such Grantor (either itself or through licensees approved by the
Lender) will not do any act that knowingly uses any material Intellectual
Property to infringe the intellectual property rights of any other Person.
(e) Such Grantor will notify the Lender immediately if it knows, or
has reason to know, that any application or registration relating to any
material Intellectual Property may become forfeited, abandoned or dedicated to
the public, or of any adverse determination or development (including, without
limitation, the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor's ownership of, or the validity of, any material Intellectual Property
or such Grantor's right to register the same or to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee approved by the Lender, or designee, shall file an
application for the registration of any Intellectual Property with the United
States Patent and Trademark Office, the United States Copyright Office or any
similar office or agency in any other country or any political subdivision
thereof, such Grantor shall report such filing to the Lender within five
Business Days after the last day of the fiscal quarter in which such filing
occurs. Upon request of the Lender, such Grantor shall execute and deliver, and
have recorded, any and all agreements, instruments, documents, and papers as the
Lender may request to evidence the Lender's security interest in any Copyright,
Patent or Trademark and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any 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 Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the Lender
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.
5.10 Vehicles. (a) No Vehicle shall be removed from the state which
has issued the certificate of title or ownership, as the case may be, therefor
for a period in excess of four (4) months.
(b) Within 30 days after the date hereof, and, with respect to any
Vehicles acquired by such Grantor subsequent to the date hereof, within 30 days
after the date of
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acquisition thereof, all applications for certificates of title or ownership, as
the case may be, indicating the Lender's first priority security interest in the
Vehicle covered by such certificate, and any other necessary documentation,
shall be filed in each office in each jurisdiction which the Lender shall deem
advisable to perfect its security interests in the Vehicles.
5.11 Notation of Security Interests on Books and Records. Each
Grantor shall cause the security interest granted by it hereunder to at all
times be noted on its books and records.
5.12 Landlord and Warehouseman Waivers. Upon the request of the
Lender, each Grantor shall deliver to the Lender waivers of contractual and
statutory landlord's, landlord's mortgagee's and warehouseman's Liens in form
and substance satisfactory to the Lender under each lease, warehouse agreement
or similar agreement to which such Grantor is a party. If any Collateral is at
any time in the possession or control of any warehouseman, bailee or any of the
agents or processors of any Grantor, such Grantor shall notify such
warehouseman, bailee, agent or processor of the security interests created
hereby and to hold all such Collateral for the Lender's account subject to the
Lender's instructions.
5.13 Financial Statements. The Parent shall furnish to the Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Parent, a copy of the audited consolidated
balance sheet of the Parent and its consolidated Subsidiaries as at the end of
such year and the related audited consolidated statements of income 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 Deloitte & Touche LLP or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal year
of the Parent, the unaudited consolidated balance sheet of the Parent and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows 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 the chief financial officer of the Parent as being fairly stated
in all material respects (subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 45 days
after the end of each month occurring during each fiscal year of the Parent
(other than the third, sixth, ninth and twelfth such month), the unaudited
consolidated balance sheets of the Parent and its Subsidiaries as at the end of
such month and the related unaudited consolidated statements of income and of
cash flows for such month and the portion of the fiscal year through the end of
such month, setting forth in each case in comparative form the figures for the
previous year, certified by the chief financial officer of the Parent as being
fairly stated in all material respects (subject to normal year-end audit
adjustments).
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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).
5.14 Mandatory Prepayment. If the Parent or any of its Subsidiaries
(other than the Borrower or any of its Subsidiaries as to which Section 3.3(b)
of the Credit Agreement is applicable) (i) receives Net Cash Proceeds from the
issuance or incurrence of any Indebtedness (other than Indebtedness not in
excess of $100,000 in the aggregate), (ii) receives Net Cash Proceeds from the
issuance of Capital Stock or from any capital contribution (other than capital
contributions by the Borrower to its Subsidiaries), (iii) sells, assigns,
transfers, leases or otherwise disposes of any of its assets (other assets
having a value not to exceed $100,000 in the aggregate), or (iv) has assets
other than the Excluded Real Property that become the subject of a Casualty
Event, then no later than two Business Days after receipt of the Net Cash
Proceeds therefrom, the Notes shall be prepaid by an amount equal to 100% of
such Net Cash Proceeds in accordance with Section 3.3(c) of the Credit
Agreement. Notwithstanding anything to the contrary contained in this Section
5.14, this Section shall not apply to the exercise by C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ of
options to purchase up to 671,500 shares of Common Stock, par value $0.10 of the
Parent, which options existed as of the date hereof.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The Lender shall
have the right to make test verifications of the Receivables in any manner and
through any medium that it reasonably considers advisable, and each Grantor
shall furnish all such assistance and information as the Lender may require in
connection with such test verifications. At any time and from time to time, upon
the Lender's request and at the expense of the relevant Grantor, such Grantor
shall cause independent public accountants or others satisfactory to the Lender
to furnish to the Lender reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.
(b) The Lender hereby authorizes each Grantor to collect such
Grantor's Receivables, subject to the Lender's direction and control, and the
Lender may curtail or terminate said authority at any time after the occurrence
and during the continuance of an Event of Default, provided that all times after
the date hereof all Receivables of the Borrower shall be deposited by the
Borrower, immediately upon receipt, into the Lockbox Account on the terms and
conditions contained in the Lockbox Agreement. If required by the Lender at any
time after the occurrence and during the continuance of an Event of Default, any
payments of Receivables, when collected by any Grantor, (i) shall be forthwith
(and, in any event, within two Business Days) deposited by such Grantor in the
exact form received, duly indorsed by such Grantor to the Lender if required, in
a Collateral Account maintained under the sole dominion and control of the
Lender, subject to withdrawal by the Lender only as provided in Section 6.5, and
(ii) until so turned over, shall be held by such Grantor in trust for the
Lender, segregated from other funds of such Grantor. Each such deposit of
Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.
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(c) At the Lender's request, each Grantor shall deliver to the
Lender all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
Lender in its own name or in the name of others may at any time after the
occurrence and during the continuance of an Event of Default communicate with
obligors under the Receivables to verify with them to the Lender's satisfaction
the existence, amount and terms of any Receivables.
(b) Upon the request of the Lender at any time after the occurrence
and during the continuance of an Event of Default, each Grantor shall notify
obligors on the Receivables that the Receivables have been assigned to the
Lender and that payments in respect thereof shall be made directly to the
Lender.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. The Lender shall
have no 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 Lender of any payment relating thereto, nor shall the Lender be obligated in
any manner to perform any of the obligations of any Grantor under or pursuant to
any Receivable (or any agreement giving rise thereto), to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment received by
it or as to the sufficiency of any performance by any party thereunder, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Lender shall have given notice to the
relevant Grantor of the Lender's intent to exercise its corresponding rights
pursuant to Section 6.3(b), each Grantor shall be permitted to receive all cash
dividends paid in respect of the Pledged Stock and all payments made in respect
of the Pledged Notes, in each case paid in the normal course of business of the
relevant Issuer and consistent with past practice, to the extent permitted in
the Credit Agreement, and to exercise all voting and corporate rights with
respect to the Investment Property; provided, however, that no vote shall be
cast or corporate right exercised or other action taken which, in the Lender's
reasonable judgment, would impair the Collateral or which would be inconsistent
with or result in any violation of any provision of the Credit Agreement, this
Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Lender shall give notice of its intent to exercise such rights to the relevant
Grantor or Grantors, (i) the Lender shall have the right to receive any and all
cash dividends, payments or other Proceeds paid in respect of the Investment
Property and make application thereof to the Obligations in such order as the
Lender may determine, and (ii) any or all of the Investment Property shall be
registered in the name of the Lender or its nominee, and the Lender or its
nominee may thereafter exercise (x) all
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voting, corporate and other rights pertaining to such Investment Property at any
meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y)
any and all rights of conversion, exchange and subscription and any other
rights, privileges or options pertaining to such Investment Property as if it
were the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Investment Property upon the
merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of any Issuer, or upon the exercise by any
Grantor or the Lender of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Lender may determine), all without liability except to account
for property actually received by it, but the Lender shall have no duty to any
Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Lender in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Lender.
6.4 Proceeds to be Turned Over To Lender. In addition to the rights
of the Lender specified in Section 6.1 with respect to payments of Receivables,
if an Event of Default shall occur and be continuing, all Proceeds received by
any Grantor consisting of cash, checks and other near-cash items shall be held
by such Grantor in trust for the Lender, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Lender in the exact form received by such Grantor (duly indorsed by such
Grantor to the Lender, if required). All Proceeds received by the Lender
hereunder shall be held by the Lender in a Collateral Account maintained under
its sole dominion and control. All Proceeds while held by the Lender in a
Collateral Account (or by such Grantor in trust for the Lender) shall continue
to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be agreed upon
by the Borrower and the Lender, or, if an Event of Default shall have occurred
and be continuing, at any time at the Lender's election, the Lender may apply
all or any part of Proceeds held in any Collateral Account in payment of the
Obligations in such order as the Lender may elect, and any part of such funds
which the Lender elects not so to apply and deems not required as collateral
security for the Obligations shall be paid over from time to time by the Lender
to the Borrower or to whomsoever may be lawfully entitled to receive the same.
Any balance of such Proceeds remaining after the Obligations shall have been
paid in full shall be paid over to the Borrower or to whomsoever may be lawfully
entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur and
be continuing, the Lender may exercise, in addition to all other rights and
remedies granted to it in
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this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing, the Lender, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the 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 Lender shall have the right upon any such public sale or sales, and,
to the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and released.
Each Grantor further agrees, at the Lender's request, to assemble the Collateral
and make it available to the Lender at places which the Lender shall reasonably
select, whether at such Grantor's premises or elsewhere. The Lender shall apply
the net proceeds of any action taken by it pursuant to this Section 6.6, after
deducting all reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any of the Collateral or
in any way relating to the Collateral or the rights of the Lender 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 Lender
may elect, and only after such application and after the payment by the Lender
of any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the New York UCC, need the Lender account for
the surplus, if any, to any Grantor. To the extent permitted by applicable law,
each Grantor waives all claims, damages and demands it may acquire against the
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. The Lender shall have the right to
enter the real property leased or owned by each Grantor for the purpose of
exercising any of the foregoing rights or remedies. Each Grantor waives all
rights of marshaling, valuation and appraisal with respect to the Collateral or
any part thereof. For the purpose of enabling the Lender, during the existence
of an Event of Default, to exercise rights and remedies hereunder at such time
as the Lender will be lawfully entitled to exercise such rights and remedies,
and for no other purpose, each Grantor hereby grants to the Lender an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to such Grantor), until the Obligations are paid in full, to
use, assign, license or sublicense any of the Intellectual Property now owned or
hereafter acquired by such Grantor, wherever the same may be located, including
in such license reasonable access to all media in which any of the licensed
items may be recorded or stored and to all computer programs used for the
compilation or printout thereof.
6.7 Registration Rights. (a) If the Lender shall determine to
exercise its right to sell any or all of the Pledged Stock pursuant to Section
6.6, and if in the opinion of the Lender 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 Grantor will cause the Issuer
thereof to
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(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 Lender, necessary or
advisable to register the Pledged Stock, or that portion thereof to be sold,
under the provisions of the Securities Act, (ii) use its best efforts 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) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Lender, 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. Each Grantor agrees to cause such Issuer to
comply with the provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Lender 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) Each Grantor recognizes that the Lender may be unable to effect
a public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Lender 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 Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Lender, that the Lender
has no adequate remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this Section 6.7 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and agrees not to assert
any rights or privileges which it may acquire under Section 9-112 of the New
York UCC. Each Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
Lender to collect such deficiency.
SECTION 7. THE LENDER
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7.1 Lender's Appointment as Attorney-in-Fact, etc. (a) Each Grantor
hereby irrevocably constitutes and appoints the Lender 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 Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Lender the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or with respect to any other Collateral and file any claim or
take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Lender for the purpose of collecting
any and all such moneys due under any Receivable or with respect to any
other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Lender may request to evidence the Lender's security
interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section
6.6 or 6.7, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Lender or as the Lender shall direct; (2) ask
or demand for, collect, and receive payment of and receipt for, any and
all moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (3) sign and indorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and
other documents in connection with any of the Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (5)
defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Lender may deem appropriate; (7) assign any Copyright,
Patent or Trademark (along with the goodwill of the business to which any
such Copyright, Patent or Trademark pertains), throughout the world for
such
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term or terms, on such conditions, and in such manner, as the Lender shall
in its sole discretion determine; and (8) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though the Lender were the
absolute owner thereof for all purposes, and do, at the Lender's option
and such Grantor's expense, at any time, or from time to time, all acts
and things which the Lender deems necessary to protect, preserve or
realize upon the Collateral and the Lender's security interests therein
and to effect the intent of this Agreement, all as fully and effectively
as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Lender agrees that it will not exercise any rights under the power of attorney
provided for in this Section 7.1(a) unless an Event of Default shall have
occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Lender, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
(c) The expenses of the Lender incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon at a
rate per annum equal to the Prime Rate in effect from time to time plus three
percent (3%), from the date of payment by the Lender to the date reimbursed by
the relevant Grantor, shall be payable by such Grantor to the Lender on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 Duty of Lender. The Lender's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the New York UCC or otherwise, shall be to
deal with it in the same manner as the Lender deals with similar property for
its own account. Neither the Lender nor any of its officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. The powers conferred on the Lender
hereunder are solely to protect the Lender's interests in the Collateral and
shall not impose any duty upon the Lender to exercise any such powers. The
Lender shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither it nor any of its officers,
directors, employees or agents shall be responsible to any Grantor for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.
7.3 Execution of Financing Statements. Pursuant to Section 9-402 of
the New York UCC and any other applicable law, each Grantor authorizes the
Lender to file or record financing statements and other filing or recording
documents or instruments with respect to the Collateral without the signature of
such Grantor in such form and in such offices as the Lender
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determines appropriate to perfect the security interests of the Lender under
this Agreement. A photographic or other reproduction of this Agreement shall be
sufficient as a financing statement or other filing or recording document or
instrument for filing or recording in any jurisdiction.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented, restated or otherwise modified
except pursuant to a written agreement executed by the affected Grantor and the
Lender; provided, however, that any provision of this Agreement imposing
obligations on any Grantor may be waived by the Lender in a written instrument
executed by the Lender.
8.2 Notices. All notices, requests and demands to or upon the Lender
or any Grantor hereunder shall be effected in the manner provided for in
subsection 9.2 of the Credit Agreement; provided, however, that any such notice,
request or demand to or upon any Guarantor shall be addressed to such Guarantor
at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. The Lender
shall not by any act (except by a written instrument pursuant to Section 8.1),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of the 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 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 Lender
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees
to pay or reimburse the Lender for all its costs and expenses incurred in
collecting against such Guarantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents to which such Guarantor is a party, including, without
limitation, the fees and disbursements of counsel (including the allocated fees
and expenses of in-house counsel) to each Lender.
(b) Each Guarantor agrees to pay, and to save the Lender harmless
from, any and all liabilities with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the Lender harmless
from, any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement to the extent the Borrower would be required to
do so pursuant to subsection 9.5 of the Credit Agreement.
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(d) The agreements in this Section 8.4 shall survive repayment of
the Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Lender and its successors and assigns; provided, however, that no Grantor may
assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Lender.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the Lender
at any time and from time to time while an Event of Default pursuant to Section
8.1 of the Credit Agreement shall have occurred and be continuing, without
notice to such Grantor or any other Grantor, any such notice being expressly
waived by each Grantor, to set-off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Lender to or for the credit or the
account of such Grantor, or any part thereof in such amounts as the Lender may
elect, against and on account of the obligations and liabilities of such Grantor
to the Lender hereunder and claims of every nature and description of the Lender
against such Grantor, in any currency, whether arising hereunder, under the
Credit Agreement, any other Loan Document or otherwise, as the Lender may elect,
whether or not the Lender has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. The Lender
shall notify such Grantor promptly of any such set-off and the application made
by the Lender of the proceeds thereof; provided, however, that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of the Lender under this Section 8.6 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which the
Lender may have.
8.7 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.10 INTEGRATION. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT OF THE GRANTORS AND THE LENDER WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR
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SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS OF THE PARTIES.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the Lender
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 Section any special, exemplary, punitive or consequential damages.
8.13 Acknowledgments. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;
(b) the Lender does not have any fiduciary relationship with or duty
to any Grantor arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between the Grantors, on the one
hand, and the Lender, 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 Grantors and the Lender.
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8.14 Additional Grantors and Security. (a) Each Subsidiary of the
Borrower that is required to become a party to this Agreement pursuant to
subsection 6.10(b) of the Credit Agreement shall become a Grantor for all
purposes of this Agreement upon execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex 1 hereto.
(b) With respect to any Person that, subsequent to the Closing Date,
becomes a Subsidiary of the Parent (other than the Borrower and its Subsidiaries
which are governed by Section 6.10 of the Credit Agreement or an Excluded
Foreign Subsidiary), the Parent shall cause such Subsidiary to promptly (and in
any event within twenty days after such Person becomes such a Subsidiary of the
Parent): (i) execute and deliver to and for the benefit of the Lender an
Assumption Agreement in the form of Annex 1 hereto, upon execution and delivery
of which Assumption Agreement such Subsidiary shall become a Grantor for all
purposes of this Agreement; (ii) deliver to the Lender the certificates
representing the Capital Stock of such Subsidiary which is owned by the Parent
or other Subsidiary of the Parent (other than the Borrower or any Subsidiary of
Borrower), together with undated stock powers executed and delivered in blank by
a duly authorized officer of the Parent or such Subsidiary, as the case may be;
(iii) execute and deliver to the Lender such Security Documents (including
Mortgages and financing statements) as may be required by the Lender to create
and perfect Liens in favor of the Lender on all present and future property of
such Subsidiary; (iv) execute and deliver such documents and certificates as the
Lender or its counsel may request relating to the organization, existence and
good standing of such Subsidiary, the authorization of the transactions
contemplated hereby and by the other Loan Documents relating to such Subsidiary,
and any other legal matters relating to such Subsidiary and the Loan Documents
to which it is or is to become a party (including, if requested by the Lender,
satisfactory environmental reports or assessments with respect to each parcel of
real property covered by a Mortgage), all in form and substance satisfactory to
the Lender and its counsel; (v) in the case of a Mortgage, deliver to the Lender
such surveys, title insurance policies, environmental assessments, and other
documents as the Lender may request, all in form and substance satisfactory to
the Lender; and (vi) if requested by the Lender, deliver to the Lender legal
opinions relating to the matters described in clauses (i), (ii), (iii) and (iv)
immediately preceding, which opinions shall be in form and substance, and from
counsel, satisfactory to the Lender.
(c) With respect to any assets acquired after the Closing Date by
the Parent or any of its Subsidiaries (other than (w) any such assets of the
Borrower or any of its Subsidiaries which are governed by Section 6.10 of the
Credit Agreement, (x) leased real property, (y) any property described in
paragraph (b) above, or (z) property acquired by an Excluded Foreign
Subsidiary), the Parent shall or shall cause such Subsidiary of Parent, as the
case may be, to promptly (and in any event within twenty days after the
acquisition thereof): (i) execute and deliver to the Lender such amendments to
the relevant Security Documents or such other documents (including Mortgages) as
the Lender shall deem necessary or advisable to grant to and for the benefit of
the Lender 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 as contemplated by such Security Documents, including the
filing of financing statements in such jurisdictions as may be requested by the
Lender; (iii) in the case of a Mortgage, deliver to the Lender such surveys,
policies and other documents as the Lender may request, all in form and
substance satisfactory to the Lender; and (iv) if requested by the Lender,
deliver to the Lender
29
34
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, satisfactory to the Lender.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Parent or any of its Subsidiaries (other
than any such assets of the Borrower and its Subsidiaries which are governed by
Section 6.10 of the Credit Agreement), the Parent shall, and shall cause its
Subsidiaries to, promptly (i) execute and deliver to the Lender such amendments
to the Guarantee and Collateral Agreement as the Lender deems necessary or
advisable to grant to the Lender, a perfected first priority security interest
in the Capital Stock of such new Subsidiary that is owned by the Parent or any
of its Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Lender the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the Parent or such Subsidiary, as the case may be,
and take such other action as may be necessary or, in the opinion of the Lender,
desirable to perfect the Lender's security interest therein, and (iii) if
requested by the Lender, deliver to the Lender legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Lender.
8.15 Releases. At such time as the Notes and the other Obligations
shall have been paid in full, the Collateral shall be released from the Liens
created hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Lender and each Grantor
hereunder shall terminate, all without delivery of any instrument or performance
of any act by any party, and all rights to the Collateral shall revert to the
Grantors. At the request and sole expense of any Grantor following any such
termination, the Lender shall deliver to such Grantor any Collateral held by the
Lender hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.
8.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
30
35
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
CRL SYSTEMS, INC.,
a Nevada corporation
____________________________________________
C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, President and
Chairman of the Board
CIRCUIT RESEARCH LABS, INC.,
an Arizona corporation
____________________________________________
C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, President and
Chairman of the Board
31
36
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
if to Circuit Research Labs, Inc.:
Circuit Research Labs, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
if to CRL Systems, Inc.:
CRL Systems, Inc.
c/o Circuit Research Labs, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
Attention: C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
37
Schedule 2
DESCRIPTION OF INVESTMENT PROPERTY
PLEDGED STOCK:*
Issuer Class of Stock Stock Certificate No. No. of Shares
------ -------------- --------------------- -------------
CRL Systems, Inc. Common 1 2,500
PLEDGED NOTES:
Issuer Payee Principal Amount
------------------------ ------------- -------------------
NONE N/A N/A
------------------------
* Stock is assumed to be common stock unless otherwise indicated.
38
Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
CRL SYSTEMS, INC.
Secretary of State, Arizona
Secretary of State, California
Secretary of State, Nevada
County Clerk, ▇▇▇▇▇ County, Nevada
CIRCUIT RESEARCH LABS, INC.
Secretary of State, California
Secretary of State, Arizona
County Clerk, Maricopa County, Arizona
Patent, Trademark and Copyright Filings
PATENTS: CRL SYSTEMS, INC.
United States
PATENTS: CIRCUIT RESEARCH LABS, INC.
United States
TRADEMARKS: CRL SYSTEMS, INC.
United States
Canada
Chile
European Community
Australia
Brazil
France
Germany
Hong Kong
Japan
India
Singapore
Taiwan
Thailand
United Kingdom
▇▇
▇▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇
COPYRIGHTS: CRL SYSTEMS, INC.
United States
COPYRIGHTS: CIRCUIT RESEARCH LABS, INC.
United States
Actions with respect to Pledged Stock and Pledged Notes
1. Delivery of original Certificates representing Pledged Stock and stock
powers signed in blank to the Lender.
Other Actions
1. Delivery by CRL Systems, Inc., of executed originals of each of the (i)
Patent Security Agreement, (ii) Copyright Security Agreement and (iii)
Trademark Security Agreement, each between CRL Systems, Inc. and Lender
and dated as of even date herewith.
2. Delivery by Circuit Research Labs, Inc., of executed originals of each of
the (i) Patent Security Agreement, (ii) Copyright Security Agreement and
(iii) Trademark Security Agreement, each between Circuit Research Labs,
Inc. and Lender and dated as of even date herewith.
35
40
Schedule 4
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Grantor Location
------- --------
Circuit Research Labs, Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇
CRL Systems, Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇
41
Schedule 5
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Location
------- --------
Circuit Research Labs, Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇
CRL Systems, Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
42
Schedule 6
COPYRIGHTS AND COPYRIGHT LICENSES
CRL SYSTEMS, INC.
--------------------------------------------------------------------------------
TITLE REGISTRATION NUMBER EFFECTIVE DATE
--------------------------------------------------------------------------------
Optimod - FM 8200 TX 4199358 May 8, 1996
Digital 1996 Brochure
--------------------------------------------------------------------------------
Optimod - FM 8200 TX 4199359 May 8, 1996
Digital 1992 Brochure
--------------------------------------------------------------------------------
CIRCUIT RESEARCH LABS, INC.
--------------------------------------------------------------------------------
TITLE REGISTRATION NUMBER EFFECTIVE DATE
--------------------------------------------------------------------------------
AM4 Stereo Matrix System TX 145685 June 14, 1983
SMP 900 Instructions
--------------------------------------------------------------------------------
SSM Dynafex Noise MW 1361 July 28, 1986
Reduction System
--------------------------------------------------------------------------------
PATENTS AND PATENT LICENSES
CRL SYSTEMS, INC.
--------------------------------------------------------------------------------
PATENT NO./ COUNTRY TITLE ISSUED/FILED
SERIAL NO.
--------------------------------------------------------------------------------
4,412,100 United States Multiband Signal October 25, 1983
Processor
--------------------------------------------------------------------------------
4,460,871 United States Multiband Cross- July 17, 1984
Coupled Compressor
with Overshoot
Protection Circuit
--------------------------------------------------------------------------------
4,495,643 United States Audio Peak Limiter January 22, 1985
Using ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
4,525,857 United States Crossover Network June 25, 1985
--------------------------------------------------------------------------------
4,674,122 United States Encoding for the June 16, 1987
FMX Compounding
System
--------------------------------------------------------------------------------
43
--------------------------------------------------------------------------------
4,837,824 United States Stereophonic Image June 6, 1989
Widening Circuit
--------------------------------------------------------------------------------
4,888,789 United States Adjustable Equalizer December 19, 1989
for Compensation for
High Frequency
Rollout - Typical AM
Receivers
--------------------------------------------------------------------------------
5,050,217 United States Dynamic Noise September 17, 1991
Reduction and
Spectal Restoration
System
--------------------------------------------------------------------------------
5,168,526 United States Distortion December 1, 1992
Cancellation Circuit
Fee Audio Peak
Limiting
--------------------------------------------------------------------------------
5,282,252 United States Audio Equalizer January 25, 1994
Providing Reciprocal
Equalization Plus
Indefinite Depth
Notch
--------------------------------------------------------------------------------
5,444,788 United States Audio Compressor August 22, 1995
Combining Feedback
and Feedforwarding
Sidechain Processing
--------------------------------------------------------------------------------
5,574,791 United States Combined DeEsser November 12, 1996
and High Frequency
Enhancer Using
Single Pair of Level
Detectors
--------------------------------------------------------------------------------
5,737, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Multi-Band Audio April 7, 1998
Compressor with
Look Ahead Clipper
--------------------------------------------------------------------------------
D398,289 United States Control Board September 15, 1998
--------------------------------------------------------------------------------
D401,774 United States Stand September 1, 1998
--------------------------------------------------------------------------------
D414,770 United States Processor October 5, 1999
--------------------------------------------------------------------------------
08/984,448 United States (application)
--------------------------------------------------------------------------------
29/069,255 United States (application)
--------------------------------------------------------------------------------
39
44
CIRCUIT RESEARCH LABS, INC.
-----------------------------------------------------------------------------------
PATENT NO./SERIAL COUNTRY TITLE ISSUED/FILED
NO.
-----------------------------------------------------------------------------------
4,398,158 United States Dynamic Range August 9, 1983;
Expander Assigned to Circuit
Research Labs, Inc.
September 27, 1985
-----------------------------------------------------------------------------------
4,350,845 United States Reverberation September 21, 1982;
Apparatus Assigned to Circuit
Research Labs, Inc.
September 27, 1985
-----------------------------------------------------------------------------------
TRADEMARKS AND TRADEMARK LICENSES
CRL SYSTEMS, INC.
--------------------------------------------------------------------------------
COUNTRY ▇▇▇▇ REGISTRATION/SERIAL REGISTERED/FILED
NO.
--------------------------------------------------------------------------------
United States ▇▇▇▇▇ 1,791,387 December 31, 1969
--------------------------------------------------------------------------------
Canada ▇▇▇▇▇ 441364 ▇▇▇▇▇ ▇▇, ▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ 541674 June 4, 1999
--------------------------------------------------------------------------------
European ▇▇▇▇▇ 166504 October 8, ▇▇▇▇
▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ OPTIMOD 1,253,703 April 5, 1975
--------------------------------------------------------------------------------
Australia OPTIMOD 8506607 March 4, 1989
--------------------------------------------------------------------------------
Brazil OPTIMOD 814882846
--------------------------------------------------------------------------------
Canada OPTIMOD TMA 368016 ▇▇▇▇▇ ▇▇, ▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ OPTIMOD 541675 June 4, 1999
--------------------------------------------------------------------------------
European OPTIMOD 166504 October 8, 1998
Community
--------------------------------------------------------------------------------
France OPTIMOD 1520234 March 21, 1989
--------------------------------------------------------------------------------
Germany OPTIMOD 1190774
--------------------------------------------------------------------------------
Hong Kong OPTIMOD 3037/97 May 1, 1997
--------------------------------------------------------------------------------
India OPTIMOD 696613 January 1996
--------------------------------------------------------------------------------
Japan OPTIMOD 2429825 June 30, 1992
--------------------------------------------------------------------------------
40
45
--------------------------------------------------------------------------------
Singapore OPTIMOD 1084/96 January 30, 1996
--------------------------------------------------------------------------------
Taiwan OPTIMOD 85008503 January 1996
--------------------------------------------------------------------------------
Thailand OPTIMOD 333792/Khor 66414 January 1997
--------------------------------------------------------------------------------
United Kingdom OPTIMOD 1377339 March 14, 1989
--------------------------------------------------------------------------------
United States AUDICY 2,168,571 June 23, 1998
--------------------------------------------------------------------------------
Australia AUDICY 740988 February 19, 1998
--------------------------------------------------------------------------------
European AUDICY 594804
Community
--------------------------------------------------------------------------------
Japan AUDICY Unknown
--------------------------------------------------------------------------------
United States TIME FIT 2,000,400 September 10, 1996
--------------------------------------------------------------------------------
United States DSE 1,994,960 August 20, 1996
--------------------------------------------------------------------------------
CIRCUIT RESEARCH LABS, INC.
COUNTRY/FILING ▇▇▇▇ REGISTRATION/ REGISTERED/FILED
SERIAL NO.
--------------------------------------------------------------------------------
United States MILLENNIUM 75-754856 Pending
--------------------------------------------------------------------------------
United States DYNAFEX 1,670,137 July 1, 1982
--------------------------------------------------------------------------------
United States CRL Systems 1,342,151 August 5, 1977
--------------------------------------------------------------------------------
United States CRL 1,300,233 August 5, 1977
--------------------------------------------------------------------------------
41
46
Schedule 7
VEHICLES
None.
47
ACKNOWLEDGMENT AND CONSENT*
The undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of _______, 2000 (the "Agreement"), made by the
Grantors parties thereto for the benefit of ▇▇▇▇▇, Inc., as Lender. The
undersigned agrees for the benefit of the Lender as follows:
1. The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.
2. The undersigned will notify the Lender hereunder promptly in writing of
the occurrence of any of the events described in Section 5.7(a) of the
Agreement.
3. The terms of Sections 6.3(c) and 6.7 of the Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(c) or 6.7 of the Agreement.
[NAME OF ISSUER]
By _______________________________________
Name:
Title:
Address for Notices:
_________________________________________
_________________________________________
_________________________________________
Fax:
--------
* This consent is necessary only with respect to any Issuer which is not also a
Grantor. This consent may be modified or eliminated with respect to any Issuer
that is not controlled by a Grantor.
48
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 2000, made by
______________________________, a ______________ (the "Additional Grantor"), in
favor of ▇▇▇▇▇, INC., a Delaware corporation, a party to the Credit Agreement
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Credit Agreement.
PRELIMINARY STATEMENTS
A. CRL Systems, Inc., a Nevada corporation (the "Borrower"), and the
Lender have entered into a Credit Agreement, dated as of _______, 2000 (as
amended, supplemented, restated or otherwise modified from time to time, the
"Credit Agreement").
B. In connection with the Credit Agreement, the Borrower and certain of
its Affiliates (other than the Additional Grantor) have entered into the
Guarantee and Collateral Agreement, dated as of _______, 2000 (as amended,
supplemented, restated or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Lender.
C. Section 6.10 of the Credit Agreement (in the case of Subsidiaries of
the Borrower) or Section 8.14(b) of the Guarantee and Collateral Agreement (in
the case of Subsidiaries of the Parent other than the Borrower and its
Subsidiaries), as the case may be, requires the Additional Grantor to become a
party to the Guarantee and Collateral Agreement.
The Additional Grantor has agreed to execute and deliver this Assumption
Agreement in order to become a party to the Guarantee and Collateral Agreement.
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the
Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and
Collateral Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in the Schedules to the Guarantee and
Collateral Agreement. The Additional Grantor hereby represents and warrants that
each of the representations and warranties contained in Section 4 of the
Guarantee and Collateral Agreement is true and correct on and as the date hereof
(after giving effect to this Assumption Agreement) as if made on and as of such
date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
1
49
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement
to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By _______________________________________
Name:__________________________________
Title:_________________________________
2
50
Annex 1-A to
Assumption Agreement
Supplement to Schedule 1
Supplement to Schedule 2
Supplement to Schedule 3
Supplement to Schedule 4
Supplement to Schedule 5
Supplement to Schedule 6
Supplement to Schedule 7