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Exhibit 10.25
GUARANTEE AND COLLATERAL AGREEMENT
made by
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ CORPORATION
and certain of its Subsidiaries
in favor of
THE CHASE MANHATTAN BANK,
as Agent
Dated as of June ___, 1997
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TABLE OF CONTENTS
Page
SECTION 1. DEFINED TERMS.............................................................................. 1
1.1 Definitions.............................................................................. 1
1.2 Other Definitional Provisions............................................................ 3
SECTION 2. GUARANTEE.................................................................................. 4
2.1 Guarantee................................................................................ 4
2.2 Right of Contribution.................................................................... 5
2.3 No Subrogation........................................................................... 5
2.4 Amendments, etc. with respect to the Borrower Obligations................................ 5
2.5 Guarantee Absolute and Unconditional..................................................... 6
2.6 Reinstatement............................................................................ 6
2.7 Payments................................................................................. 7
SECTION 3. GRANT OF SECURITY INTEREST................................................................. 7
SECTION 4. REPRESENTATIONS AND WARRANTIES............................................................. 7
4.1 Representations in Credit Agreement...................................................... 7
4.2 Title; No Other Liens.................................................................... 8
4.3 Perfected First Priority Liens........................................................... 8
4.4 Chief Executive Office................................................................... 8
4.5 Farm Products............................................................................ 8
4.6 Receivables.............................................................................. 8
SECTION 5. COVENANTS.................................................................................. 9
5.1 Covenants in Credit Agreement............................................................ 9
5.2 Delivery of Instruments and Chattel Paper................................................ 9
5.3 Payment of Obligations................................................................... 9
5.4 Maintenance of Perfected Security Interest; Further Documentation........................ 9
5.5 Changes in Locations, Name, etc.......................................................... 10
5.6 Notices.................................................................................. 10
5.7 Receivables.............................................................................. 10
SECTION 6. REMEDIAL PROVISIONS........................................................................ 10
6.1 Certain Matters Relating to Receivables.................................................. 11
6.2 Communications with Obligors; Grantors Remain Liable..................................... 11
6.3 Proceeds to be Turned Over To Agent...................................................... 12
6.4 Application of Proceeds.................................................................. 12
6.5 Code and Other Remedies.................................................................. 12
6.6 Waiver; Deficiency....................................................................... 13
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Page
SECTION 7. THE AGENT.................................................................................. 13
7.1 Agent's Appointment as Attorney-in-Fact, etc............................................. 13
7.2 Duty of Agent............................................................................ 15
7.3 Execution of Financing Statements........................................................ 15
7.4 Authority of Agent....................................................................... 16
SECTION 8. MISCELLANEOUS.............................................................................. 16
8.1 Amendments in Writing.................................................................... 16
8.2 Notices.................................................................................. 16
8.3 No Waiver by Course of Conduct; Cumulative Remedies...................................... 16
8.4 Enforcement Expenses; Indemnification.................................................... 16
8.5 Successors and Assigns................................................................... 17
8.6 Set-Off.................................................................................. 17
8.7 Counterparts............................................................................. 18
8.8 Severability............................................................................. 18
8.9 Section Headings......................................................................... 18
8.10 Integration............................................................................. 18
8.11 GOVERNING LAW........................................................................... 18
8.12 Submission To Jurisdiction; Waivers..................................................... 18
8.13 Acknowledgements........................................................................ 19
8.14 WAIVER OF JURY TRIAL.................................................................... 19
8.15 Additional Guarantors; Additional Grantors.............................................. 19
8.16 Releases................................................................................ 20
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GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of June 9, 1997,
made by ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Corporation (the "Company") and each of the other
signatories hereto (together with any other entity that may become a party
hereto as provided herein but excluding the Company, the "Guarantors"), in favor
of THE CHASE MANHATTAN BANK, as agent (in such capacity, the "Agent") for the
banks and other financial institutions (the "Lenders") from time to time parties
to the Credit Agreement, dated as of June 9, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Company, the Lenders and the Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Company upon the terms and
subject to the conditions set forth therein;
WHEREAS, the Company is a member of an affiliated group of
companies that includes each Guarantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Company to make valuable
transfers to one or more of the other Guarantors in connection with the
operation of their respective businesses;
WHEREAS, the Company and the Guarantors are engaged in related
businesses, and the Company and each Guarantor will derive substantial direct
and indirect benefit from the making of the extensions of credit under the
Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Company under the
Credit Agreement that the Company and the Guarantors shall have executed and
delivered this Agreement to the Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Company thereunder,
the Company and each Guarantor hereby agrees with the Agent, for the ratable
benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined: Accounts, Chattel Paper, Farm Products,
Instruments and Proceeds.
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(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Borrower Obligations": the collective reference to the unpaid
principal of and interest on the Loans, the Acceptance Reimbursement
Obligations, the Letter of Credit Reimbursement Obligations and all
other obligations and liabilities of the Company (including, without
limitation, interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans, the Acceptance
Reimbursement Obligations, the Letter of Credit Reimbursement
Obligations and interest accruing at the then applicable rate provided
in the Credit Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to
the Agent or any Lender (or, in the case of any Hedge Agreement
referred to below, any Affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing
or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, this Agreement, the other Credit Documents,
any Letter of Credit, any Acceptance or any Hedge Agreement entered
into by the Company with any Lender (or any Affiliate of any Lender) or
any other document made, delivered or given in connection therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel
to the Agent or to the Lenders that are required to be paid by the
Company pursuant to the terms of any of the foregoing agreements).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by
the Agent as provided in Section 6.1 or 6.4.
"Fully Satisfied": shall mean, with respect to the Obligations
as of any date, that, on or before such date, (a) the principal of and
interest accrued to such date on such Obligations (other than Letters
of Credit and Acceptances that have been cash collateralized in
accordance with Section 6.20 of the Credit Agreement) shall have been
paid in full in cash, (b) all fees, expenses and other amounts then due
and payable which constituted Obligations (other than Letters of Credit
and Acceptances that have been cash collateralized in accordance with
Section 6.20 of the Credit Agreement) shall have been paid in full in
cash, (c) the Revolving Credit Obligations shall have expired or
irrevocably been terminated and (d) any Letters of Credit or Acceptance
outstanding on the Termination Date shall have been cash collateralized
in accordance with Section 6.20 of the Credit Agreement; provided,
however, that, on such date, none of the Agent or the Lenders shall
have made any claims in respect of
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Obligations against the Company or any Guarantor under any provision of
any of the Credit Documents that has not been cash collateralized by an
amount sufficient in the reasonable judgment of the Agent and such
Lender to secure such claim.
"Grantors": the collective reference to the Company and each
Guarantor that executes and delivers a Grantor Assumption Agreement in
the form of Annex 2 hereto.
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) the Borrower Obligations and (ii) all
obligations and liabilities of such Guarantor which may arise under or
in connection with this Agreement or any other Credit 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 Agent or to the Lenders that are
required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Credit Document).
"Hedge Agreements": as to any Person, all interest rate
protection agreements, interest rate futures, interest rate options,
interest rate swaps, caps or collar agreements or other interest rate
hedge arrangements or other similar agreements or arrangements entered
into by such Person providing for protection against fluctuations in
interest rates or currency exchange rates or the exchange of nominal
interest obligations, either generally or under specific contingencies.
"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 Company, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"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); provided that
"Receivables" shall exclude any right to payment for goods sold at
retail to individuals for personal use; provided, further, that
Receivables of any Grantor other than the Company shall be limited to
Receivables solely in respect of menswear distributed under the Polo by
▇▇▇▇▇ ▇▇▇▇▇▇, Polo Sport, ▇▇▇▇▇ Lauren/Purple Label Collection and Polo
Golf brands.
"Securities Act": the Securities Act of 1933, as amended.
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
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Agreement as a whole and not to any particular provision of this Agreement, and
Section and Schedule references are to this Agreement unless otherwise
specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Agent, for the
ratable benefit of the Lenders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Company when due (whether at the stated maturity, by acceleration or otherwise)
of the Borrower Obligations.
(b) Anything herein or in any other Credit Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Credit 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 Agent or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in
full force and effect until all the Guarantor Obligations shall have been Fully
Satisfied, notwithstanding that from time to time during the term of the Credit
Agreement the Company may be free from any Borrower Obligations.
(e) No payment made by the Company, any of the Guarantors, any
other guarantor or any other Person or received or collected by the Agent or any
Lender from the Company, 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, no Letter of Credit or Acceptance shall be
outstanding and the Revolving Credit Commitments are terminated.
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2.2 Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder which has
not paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of Section 2.3. The
provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of any Guarantor to the Agent and the Lenders, and each Guarantor
shall remain liable to the Agent and the Lenders 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 Agent or any Lender, no Guarantor shall be entitled to be subrogated to any
of the rights of the Agent or any Lender against the Company or any other
Guarantor or any collateral security or guarantee or right of offset held by the
Agent or any Lender for the payment of the Borrower Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from the
Company or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Agent and the Lenders by the Company
on account of the Borrower Obligations are paid in full, no Letter of Credit or
Acceptance shall be outstanding and the Revolving Credit Commitments are
terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Borrower Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in trust for
the Agent and the Lenders, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Agent, if required), to be applied against the Borrower Obligations, whether
matured or unmatured, in such order as the Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Agent or any Lender may be rescinded by the Agent or
such Lender and any of the Borrower Obligations continued, and the Borrower
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Agent or any Lender, and the Credit Agreement and the other Credit Documents
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the Agent
(or the Required Lenders or all Lenders, as the case may be) may deem advisable
from time to time, and any collateral security, guarantee or right of offset at
any time held by the Agent or any Lender for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Agent nor any Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time
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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 Agent or
any Lender upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Company and any of the
Guarantors, on the one hand, and the Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Company 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 Credit 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 Agent or any Lender, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by the Company or any other Person against the Agent or any Lender, or
(c) any other circumstance whatsoever (with or without notice to or knowledge of
the Company or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Company 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
Agent or any Lender may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
the Company, 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 Agent or any Lender to make any such
demand, to pursue such other rights or remedies or to collect any payments from
the Company, 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 Company, 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 Agent or any Lender against any Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by
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the Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Company 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 Company 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 Agent without set-off or counterclaim in Dollars
at the office of the Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Agent, and
hereby grants to the Agent, for the ratable benefit of the Lenders, a security
interest in, all of the following property now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest (collectively, the
"Collateral"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor's Obligations,:
(a) all Receivables;
(b) all books and records pertaining to the Collateral; and
(c) 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 Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Company thereunder, the Company and each Guarantor hereby
represents and warrants to the Agent and each Lender that:
4.1 Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in subsection 8 of the
Credit Agreement as they relate to such Guarantor or to the Credit Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Agent and each Lender shall be entitled
to rely on each of them as if they were fully set forth herein, provided that
each reference in each such representation and warranty to the Company's
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knowledge shall, for the purposes of this Section 4.1, be deemed to be a
reference to such Guarantor's knowledge.
4.2 Title; No Other Liens. Except for the security interest
granted to the Agent for the ratable benefit of the Lenders pursuant to this
Agreement and the other Liens permitted to exist on the Collateral by the Credit
Agreement, each 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 the Collateral is on file or of record in any
public office, except such as have been filed in favor of the Agent, for the
ratable benefit of the Lenders, pursuant to this Agreement or as are permitted
by the Credit Agreement.
4.3 Perfected First Priority Liens. In the case of each
Grantor, the security interests granted pursuant to this Agreement (a) upon
completion of the filings and other actions specified on Schedule 2 (which, in
the case of all filings and other documents referred to on said Schedule, have
been delivered to the Agent in completed and duly executed form) will constitute
valid perfected security interests in all of the Collateral in favor of the
Agent, for the ratable benefit of the Lenders, as collateral security for such
Grantor's Obligations, enforceable in accordance with the terms hereof against
all creditors of such Grantor and any Persons purporting to purchase any
Collateral from such Grantor (except as to the ability of the Agent, for the
ratable benefit of the Lenders, to have the U.S. federal government make
payments directly to the Agent, for the ratable benefit of the Lenders, in
respect of Receivables arising under contracts with the U.S. federal government
as to which no filing has been or will be made under the Federal Assignment of
Claims Act) and (b) are prior to all other Liens on the Collateral in existence
on the date hereof except for (i) unrecorded Liens permitted by the Credit
Agreement which have priority over the Liens on the Collateral created hereby by
operation of law and (ii) Liens permitted under subsection 10.5 of the Credit
Agreement which have priority over the Liens on the Collateral created hereby by
operation of law.
4.4 Chief Executive Office. In the case of each Grantor, 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 3.
4.5 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
4.6 Receivables. (a) In the case of each Grantor, 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 Agent.
(b) In the case of each Grantor, the amounts represented by
such Grantor to the Lenders from time to time as owing to such Grantor in
respect of the Receivables will at such times be accurate.
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SECTION 5. COVENANTS
The Company and each Guarantor covenants and agrees with the
Agent and the Lenders that, from and after the date of this Agreement until the
Obligations shall have been Fully Satisfied:
5.1 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument or Chattel Paper, such Instrument or Chattel Paper
shall be immediately delivered to the Agent, duly indorsed in a manner
satisfactory to the Agent, to be held as Collateral pursuant to this Agreement.
5.3 Payment of Obligations. In the case of each Grantor, such
Grantor will pay and discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all taxes, assessments and
governmental charges or levies imposed upon the Collateral or in respect of
income or profits therefrom, as well as all claims of any kind (including,
without limitation, claims for labor, materials and supplies) against or with
respect to the Collateral, except that no such charge need be paid if the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor and such proceedings could not reasonably
be expected to result in the sale, forfeiture or loss of any material portion of
the Collateral or any interest therein.
5.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) In the case of each Grantor, such Grantor shall maintain the
security interest created by this Agreement as a perfected security interest
having at least the priority described in Section 4.3 and shall defend such
security interest against the claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Agent and the Lenders
from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral as the
Agent may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written
request of the Agent, and at the sole expense of each 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 Agent may
reasonably request for the purpose of obtaining or preserving the
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full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby.
5.5 Changes in Locations, Name, etc. In the case of each
Grantor, such Grantor will not, except upon 15 days' prior written notice to the
Agent and delivery to the Agent of all additional executed financing statements
and other documents reasonably requested by the Agent to maintain the validity,
perfection and priority of the security interests provided for herein:
(i) change the location of its chief executive office or sole
place of business from that referred to in Section 4.4; or
(ii) change its name, identity or corporate structure to such
an extent that any financing statement filed by the Agent in connection
with this Agreement would become misleading.
5.6 Notices. In the case of each Grantor, such Grantor will
advise the Agent and the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Agent to exercise any of its remedies
hereunder; and
(b) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.
5.7 Receivables. (a) In the case of each Grantor, 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 Agent a copy of each
material demand, notice or document received by it that questions or calls into
doubt the validity or enforceability of more than 5% of the aggregate amount of
the then outstanding Receivables.
SECTION 6. REMEDIAL PROVISIONS
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6.1 Certain Matters Relating to Receivables. (a) The Agent
shall have the right to make test verifications of the Receivables in any manner
and through any medium that it reasonably considers advisable, and each Grantor
shall furnish all such assistance and information as the Agent may require in
connection with such test verifications. At any time and from time to time, upon
the Agent's request and at the expense of the relevant Grantor, such Grantor
shall cause independent public accountants or others satisfactory to the Agent
to furnish to the Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.
(b) The Agent hereby authorizes each Grantor to collect such
Grantor's Receivables, subject to the Agent's direction and control, and the
Agent may curtail or terminate said authority at any time after the occurrence
and during the continuance of an Event of Default. If required by the Agent at
any time after the occurrence and during the continuance of an Event of Default,
any payments of Receivables, when collected by any Grantor, (i) shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the Agent
if required, in a Collateral Account maintained under the sole dominion and
control of the Agent, subject to withdrawal by the Agent for the account of the
Lenders only as provided in Section 6.4, and (ii) until so turned over, shall be
held by such Grantor in trust for the Agent and the Lenders, segregated from
other funds of such Grantor. Each such deposit of Proceeds of Receivables shall
be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit.
(c) At the Agent's request, each Grantor shall deliver to the
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a)
The Agent in its own name or in the name of others may at any time after the
occurrence and during the continuance of an Event of Default communicate with
obligors under the Receivables to verify with them to the Agent's satisfaction
the existence, amount and terms of any Receivables.
(b) Upon the request of the Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables that the Receivables have been assigned to
the Agent for the ratable benefit of the Lenders and that payments in respect
thereof shall be made directly to the Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Agent nor any Lender shall have any obligation or liability
under any Receivable (or any agreement giving rise thereto) by reason of or
arising
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out of this Agreement or the receipt by the Agent or any Lender of any payment
relating thereto, nor shall the Agent or any 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 Proceeds to be Turned Over To Agent. In addition to the
rights of the Agent and the Lenders 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 Agent and the
Lenders, segregated from other funds of such Grantor, and shall, forthwith upon
receipt by such Guarantor, be turned over to the Agent in the exact form
received by such Guarantor (duly indorsed by such Grantor to the Agent, if
required). All Proceeds received by the Agent hereunder shall be held by the
Agent in a Collateral Account maintained under its sole dominion and control.
All Proceeds while held by the Agent in a Collateral Account (or by such Grantor
in trust for the Agent and the Lenders) shall continue to be held as collateral
security for all the Obligations and shall not constitute payment thereof until
applied as provided in Section 6.4.
6.4 Application of Proceeds. If an Event of Default shall have
occurred and be continuing, at any time at the Agent's election, the Agent may
apply all or any part of Proceeds held in any Collateral Account in payment of
the Obligations in such order as the Agent may elect, and any part of such funds
which the Agent 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 Agent
to the Company or to whomsoever may be lawfully entitled to receive the same.
Any balance of such Proceeds remaining after the Obligations shall have been
Fully Satisfied shall be paid over to the Company or to whomsoever may be
lawfully entitled to receive the same.
6.5 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New York UCC
or any other applicable law. Without limiting the generality of the foregoing,
the Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels
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at public or private sale or sales, at any exchange, broker's board or office of
the Agent or any Lender or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on credit or
for future delivery without assumption of any credit risk. The Agent or any
Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and released.
Each Grantor further agrees, at the Agent's request, to assemble the Collateral
and make it available to the Agent at places which the Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. The Agent shall apply
the net proceeds of any action taken by it pursuant to this Section 6.5, 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 Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as the Agent may elect, and only after such application and after the
payment by the Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the New York UCC, need the
Agent account for the surplus, if any, to any Grantor. To the extent permitted
by applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Agent or any Lender arising out of the exercise by them of
any rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.
6.6 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 Agent or any Lender to collect such deficiency.
SECTION 7. THE AGENT
7.1 Agent's Appointment as Attorney-in-Fact, etc. (a) Each
Grantor hereby irrevocably constitutes and appoints the Agent and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such 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
Agent the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any or all of the following:
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(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 Agent for the purpose of
collecting any and all such moneys due under any Receivable or with
respect to any other Collateral whenever payable;
(ii) upon such Grantor's failure to do so, 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;
(iii) execute, in connection with any sale provided for in
Section 6.5, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(iv) (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 Agent or as the Agent shall direct; (2)
ask or demand for, collect, and receive payment of and receipt for, any
and all moneys, claims and other amounts due or to become due at any
time in respect of or arising out of any Collateral; (3) sign and
indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of
the Collateral; (4) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction
to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral; (5) defend any suit, action
or proceeding brought against such Guarantor 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 Agent may deem appropriate; and (7) 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
Agent were the absolute owner thereof for all purposes, and do, at the
Agent's option and such Grantor's expense, at any time, or from time to
time, all acts and things which the Agent deems necessary to protect,
preserve or realize upon the Collateral and the Agent's and the
Lenders' security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Section 7.1(a) unless an Event of Default shall have
occurred and be continuing.
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(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement. The Agent shall use its best efforts to notify
each Grantor if the Agent shall itself perform or comply, or otherwise, cause
performance or compliance, with any of such Grantor's agreements hereunder, but
failure of the Agent to so notify such Grantor should not effect the obligations
of such Grantor.
(c) The expenses of the Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due ABR Loans under the Credit Agreement, from the date
of payment by the Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 Duty of Agent. The Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the New York UCC or otherwise, shall be to
deal with it in the same manner as the Agent deals with similar property for its
own account. Neither the Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Agent and the Lenders hereunder are solely to protect the
Agent's and the Lenders' interests in the Collateral and shall not impose any
duty upon the Agent or any Lender to exercise any such powers. The Agent and the
Lenders shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section
9-402 of the New York UCC and any other applicable law, each Grantor authorizes
the Agent to file or record financing statements and other filing or recording
documents or instruments with respect to the Collateral without the signature of
such Grantor in such form and in such offices as the Agent reasonably determines
appropriate to perfect the security interests of the Agent 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.
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7.4 Authority of Agent. The Company and each Guarantor
acknowledges that the rights and responsibilities of the Agent under this
Agreement with respect to any action taken by the Agent or the exercise or
non-exercise by the Agent of any option, voting right, request, judgment or
other right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the Agent and the Lenders, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Agent and the Company and the
Guarantors, the Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
neither the Company nor any Guarantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with subsection 13.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Agent or the Company or any Guarantor hereunder shall be effected in the manner
provided for in subsection 13.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Agent
or such Lender would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse each Lender and the Agent for all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Credit Documents to which such Guarantor is a
party, including, without limitation, the fees and disbursements of counsel to
each Lender and of counsel to the Agent.
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(b) The Company and each Guarantor agrees to pay, and to save
the Agent and the Lenders harmless from, any and all liabilities with respect
to, or resulting from any delay in paying, any and all stamp, excise, sales or
other taxes which may be payable or determined to be payable with respect to any
of the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) The Company and each Guarantor agrees to pay, and to save
the Agent and the Lenders harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement to the
extent the Company would be required to do so pursuant to subsection 13.5 of the
Credit Agreement.
(d) The agreements in this Section 8.4 shall survive repayment
of the Obligations and all other amounts payable under the Credit Agreement and
the other Credit Documents.
8.5 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of the Company and each Guarantor and shall
inure to the benefit of the Agent and the Lenders and their successors and
assigns; provided that neither the Company nor any Guarantor may assign,
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of the Agent.
8.6 Set-Off. The Company and each Guarantor hereby irrevocably
authorizes the Agent and each Lender at any time and from time to time following
the occurrence of and during the continuation of a Default or an Event of
Default, without notice to the Company or such Guarantor or any other Guarantor,
any such notice being expressly waived by the Company and each Guarantor, to
set-off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Agent or such Lender to or for the credit or the account of such
Person, or any part thereof in such amounts as the Agent or such Lender may
elect, against and on account of the obligations and liabilities of such Person
to the Agent or such Lender hereunder and claims of every nature and description
of the Agent or such Lender against such Person, in any currency, whether
arising hereunder, under the Credit Agreement, any other Credit Document or
otherwise, as the Agent or such Lender may elect, whether or not the Agent or
any Lender has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Agent and each Lender
shall notify such Person promptly of any such set-off and the application made
by the Agent or such Lender of the proceeds thereof, provided that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of the Agent and each Lender under this Section 8.6 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Agent or such Lender may have.
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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 Credit
Documents represent the agreement of the Company, the Guarantors, the Agent and
the Lenders with respect to the subject matter hereof and thereof, and there are
no promises, undertakings, representations or warranties by the Agent or any
Lender relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Credit Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. The Company and each
Guarantor hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Credit 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 the Company or such Guarantor, as the case
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may be, at its address referred to in Section 8.2 or at such other
address of which the Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
8.13 Acknowledgements. The Company and each Guarantor hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Credit Documents
to which it is a party;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Company or any Guarantor arising out
of or in connection with this Agreement or any of the other Credit
Documents, and the relationship between the Company and the Guarantors,
on the one hand, and the Agent and Lenders, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;
and
(c) no joint venture is created hereby or by the other Credit
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Company or the
Guarantors and the Lenders.
8.14 WAIVER OF JURY TRIAL. THE COMPANY AND EACH
GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS AND THE
AGENT, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
8.15 Additional Guarantors; Additional Grantors. (a) Each
Subsidiary of the Company that is required to become a party to this Agreement
pursuant to subsection 9.9, 10.8(c) or 10.11 of the Credit Agreement shall
become a Guarantor for all purposes of this Agreement upon execution and
delivery by such Subsidiary of a Guarantor Assumption Agreement in the form of
Annex 1 hereto.
(b) Each Domestic Subsidiary of the Company that is required
to become a Grantor pursuant to subsection 10.11 of the Credit Agreement shall
become a Grantor for all
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purposes of this Agreement upon execution and delivery by such Subsidiary of a
Grantor Assumption Agreement in the form of Annex 2 hereto.
8.16 Releases. (a) At such time as Obligations have been Fully
Satisfied, 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 Agent, the Company and each Guarantor 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
Agent shall deliver to such Grantor any Collateral held by the Agent hereunder,
and execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. At the request and sole expense of the Company, a Guarantor
shall be released from its obligations hereunder in the event that all the
Capital Stock of such Guarantor shall be sold, transferred or otherwise disposed
of in a transaction permitted by the Credit Agreement.
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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.
▇▇▇▇ ▇▇▇▇▇ LAUREN CORPORATION
By:
-----------------------------------
Title:
RL FRAGRANCES LLC
By: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
CORPORATION, its Managing
Member
By:
---------------------------
Title:
THE ▇▇▇▇▇ LAUREN WOMENSWEAR
COMPANY, L.P.
By: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
WOMENSWEAR, INC., its General
Partner
By:
----------------------------
Title:
POLO RETAIL CORPORATION
By:
-------------------------------
Title:
FASHIONS OUTLET OF AMERICA, INC.
By:
-------------------------------
Title:
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THE POLO/LAUREN COMPANY, L.P.
By: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
CORPORATION, its General
Partner
By:
-------------------------------
Title:
26
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
27
Schedule 2
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a financing statement is to be filed]
Other Actions
[Describe other actions to be taken]
28
Schedule 3
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Name Location
---- --------
29
Annex 1 to
Guarantee and Collateral Agreement
GUARANTOR ASSUMPTION AGREEMENT, dated as of ________________,
199_, made by ______________________________, a ______________ corporation (the
"Additional Guarantor"), in favor of THE CHASE MANHATTAN BANK, as agent (in such
capacity, the "Agent") for the banks and other financial institutions (the
"Lenders") parties to the Credit Agreement referred to below. All capitalized
terms not defined herein shall have the meaning ascribed to them in such Credit
Agreement.
W I T N E S S E T H :
WHEREAS, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Corporation, a Delaware corporation
(the "Company"), the Lenders and the Agent have entered into a Credit Agreement,
dated as of June ___, 1997 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Company
and certain of its Subsidiaries (other than the Additional Guarantor) have
entered into the Guarantee and Collateral Agreement, dated as of June ___, 1997
(as amended, supplemented or otherwise modified from time to time, the
"Guarantee and Collateral Agreement") in favor of the Agent for the benefit of
the Lenders;
WHEREAS, the Credit Agreement requires the Additional
Guarantor to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Guarantor 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 Guarantor, as provided in
Section 8.15(a) of the Guarantee and Collateral Agreement, hereby becomes a
party to the Guarantee and Collateral Agreement as a Guarantor thereunder with
the same force and effect as if originally named therein as a Guarantor and,
without limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Guarantor thereunder. The information set forth
in Annex 1-A hereto is hereby added to the information set forth in Schedules
____________* to the Guarantee and Collateral Agreement. The Additional
Guarantor hereby represents and warrants that each of the representations and
warranties contained in Section 4 of the
--------
* Refer to each Schedule which needs to be supplemented.
30
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.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GUARANTOR]
By:
--------------------------------
Name:
Title:
31
Annex 2 to
Guarantee and Collateral Agreement
GRANTOR ASSUMPTION AGREEMENT, dated as of ________________,
199_, made by ______________________________, a ______________ corporation (the
"Additional Grantor"), in favor of THE CHASE MANHATTAN BANK, as agent (in such
capacity, the "Agent") for the banks and other financial institutions (the
"Lenders") parties to the Credit Agreement referred to below. All capitalized
terms not defined herein shall have the meaning ascribed to them in such Credit
Agreement.
W I T N E S S E T H :
WHEREAS, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Corporation, a Delaware corporation
(the "Company"), the Lenders and the Agent have entered into a Credit Agreement,
dated as of June ___, 1997 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Company
and certain of its Subsidiaries have entered into the Guarantee and Collateral
Agreement, dated as of June ___, 1997 (as amended, supplemented or otherwise
modified from time to time, the "Guarantee and Collateral Agreement") in favor
of the Agent for the benefit of the Lenders;
WHEREAS, subsection 10.11 of the Credit Agreement requires the
Additional Grantor to become a "Grantor" under the Guarantee and Collateral
Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and
deliver this Assumption Agreement in order to become a "Grantor" under the
Guarantee and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 8.15(b) of the Guarantee and Collateral Agreement, hereby becomes a
Grantor under the Guarantee and Collateral Agreement 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 2-A
hereto is hereby added to the information set forth in Schedules ____________**
to the Guarantee and Collateral Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 4 of the Guarantee and
--------
** Refer to each Schedule which needs to be supplemented.
32
Collateral Agreement is true and correct on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
-------------------------------
Name:
Title:
