EXHIBIT A
FORM OF INTERCOMPANY NOTE
New York, New York
October 31, 1996
FOR VALUE RECEIVED, [Name of Payor], a ____________ corporation (the
"Borrower"), hereby promises to pay on demand to the order of [Name of
Payee] or its assigns (the "Payee"), in lawful money of the United States
of America in immediately available funds, at such location in the United
States of America as the Payee shall from time to time designate, the
unpaid principal amount of all loans and advances made by the Payee to the
Borrower.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid
at such rate per annum as shall be agreed upon from time to time by the
Borrower and Payee. [, which in no event shall exceed the Prime Rate (as
defined in the Credit Agreement referred to below). Notwithstanding
anything to the contrary herein, no payment or prepayment of principal of
or interest on this Note may be made, directly or indirectly, if a Default
or Event of Default (each as defined in the Credit Agreement referred to
below) shall have occurred and be continuing or would result
therefrom.]*/
Upon the commencement of any bankruptcy, reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar proceeding of any jurisdiction
relating to the Borrower, the unpaid principal amount hereof shall become
immediately due and payable without presentment, demand, protest or notice
of any kind in connection with this Note.
This Note is one of the Intercompany Notes referred to in the Credit
Agreement, dated as of October 31, 1996, among BCP/Essex Holdings Inc.,
Essex Group, Inc., the Lenders from time to time parties thereto and The
Chase Manhattan Bank, as Administrative Agent (as amended, modified or
supplemented from time to time, the "Credit Agreement") and is subject to
the terms thereof, and shall be pledged by the Payee pursuant to the
[Holdings] [Company] [Subsidiary] Pledge Agreement (as defined in the
Credit Agreement). The Borrower hereby acknowledges and agrees that said
Administrative Agent pursuant to and as defined in the [Holdings]
[Company] [Subsidiary] Pledge Agreement may exercise all rights provided
therein with respect to this Note.
The Payee is hereby authorized to record all loans and advances made
by it to the Borrower (all of which shall be evidenced by this Note), and
all repayments or prepayments thereof, in its books and records, such
books and records constituting prima facie evidence of the accuracy of the
information contained therein.
All payments under this Note shall be made without offset,
counterclaim or deduction of any kind.
*/ Insert in Intercompany Notes as to which Essex Group Inc. is the
Borrower.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[NAME OF ▇▇▇▇▇]
By_______________________________
Title:
Pay to the order of
_______________________
[NAME OF ▇▇▇▇▇]
By______________________
Title:
EXHIBIT B-1
Form of Borrowing Base Certificate
Date:
---------
(000's)
TO: The Chase Manhattan Bank
Asset Based Lending Operations
Ten South LaSalle Street
Chicago, IL 60603-1097
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: Essex Group, Inc.
Borrowing Base Certificate#:
---------
-----------------------------------------------------------------------
We hereby certify the following information:
(1) Accounts Receivable as of the date of last
submitted certificate:
+ SALES
- COLLECTIONS
- CREDITS
- WRITEOFFS
- ADJUSTMENTS/OTHER
- Change in Reserve for Doubtful Accounts ____
Accounts Receivable as of / / : $_____
--------
- Notes Receivable
- Miscellaneous Accounts Receivable
- Unbilled
+ Reserved for Doubtful Accounts
+ Reserve for Sales Allowances ____
(2) Accounts Receivable Aging as of / / : ____
--------
Division:
[CAPTION]
1-30 31-60 61-90 91 or more
FUTURE CURRENT Past Due Past Due Past Due Past Due TOTAL
------ ------- ---- ----- ----- ---- -----
Magnet Wire and
Insulation
Automotive
Communications
Interstate
2
Industrial
Building Wire
Other
Total $ $ $ $ $ $
(3) Computation of the Borrowing Base:
3
Borrowing Base Certificate
Date:________
(000's)
ELIGIBLE RECEIVABLES:
(+/- Adjustments)
(A) Total Accounts Receivable
determined in accordance with GAAP $___
Additions:
Reserve for Doubtful Accounts $___
Deductions:
Miscellaneous A/R for MWI, Automotive,
Communications, Interstate, Industrial,
Building Wire and Other $___
Competitive Price Accrual
Revised Total Accounts Receivable $___
---
Less the following Deductions:
($____)
Total Deductions $___
Total Eligible Receivables (before 85%) $___
(B) Eligible Receivables Borrowing Base Value
(i.e., 85% of Eligible Receivables) $___
---
ELIGIBLE INVENTORY:
(C) Total Inventory - as of / / BY DIVISION
--------
(determined in accordance with GAAP; does not consider
LIFO reserve)
Magnet Wire and Insulation
Automotive
Communications
Interstate
Industrial
Building Wire
Other ____
Total Inventory $____
Plus or Minus Purchase Price Variances:
- Current Month
- Prior Month ____
Revised Total Inventory $___
Less the following Deductions: ($____)
Total Deductions $___
Net Eligible Inventory before Eligible Consigned
Inventory and Raw Materials $___
4
Less:
Eligible Consigned Inventory ($____)
Raw Materials ($____)
Net Eligible Inventory before 65% $_____
-----
(D) 65% of Eligible Inventory ---
5
Borrowing Base Certificate
Date:_______
(000's)
Eligible Consigned Inventory
(E) 50% of Eligible Consigned Inventory ___
Raw Material
(F) 30% of Raw Materials ___
---
(G) Total Eligible Inventory $____
----
Note: Total Eligible Inventory Borrowing Base Value cannot exceed
Eligible Receivables Borrowing Base Value
(H) Grand Total Borrowing Base $____
(Sum of (B) and (G) above) ----
Effective Date
_______,
199__
Aggregate Outstanding Revolving Extension of Credit:
(a) (i) Aggregate Principal Amount of Loans ____
(ii) Aggregate L/C ____
(iii) Aggregate Canadian Loan Facility ____
(iv) Aggregate Principal Amount of all
Specified Basket Debt Outstanding ____
(b) Sum of (a)(i) through (a)(iv) above $____
Modified Aggregate Outstanding Extensions of Credit:
(a) Aggregate Outstanding Extensions of Credit
(b) Minus the Lesser of:
(i) Letter of Credit Commitment and
(ii) Aggregate Amount of all Letter of Credit
Obligations outstanding $____
+/- any loans to reimburse L/C drawings $____
(c) Sum of (a) and (b) $____
----
Loans Available under Borrowing Base (Based on maximum
allowable $370 million) $____
The undersigned hereby represents and warrants that this is a correct
statement regarding the status of accounts receivable and inventory
assigned to The Chase Manhattan Bank, as administrative agent (the
"Administrative agent") for the lenders (the "Lenders") parties to the
Credit Agreement dated as of October 31, 1996 (the "Credit Agreement"),
among BCP/Essex Holdings Inc., the Company, the Administrative Agent and
6
the Lenders, that the figures set forth herein are accurage in all
material respects and have been computed in accordance with the Credit
Agreement and that no Tolled Inventory (as defined in the Company Security
Agreement or the Subsidiary Security Agreement, as the case may be),
referred to in the Credit Agreement is included in any of the computations
including inventory herein. The undersigned further warrants and
represents that the Company is in complete compliance with all the terms
and conditions contained in the agreements between us. The undersigned
further understands that the Lenders' extensions of credit to the Company
will be based upon the reliance on the information contained herein.
Terms used herein which are defined in the Credit Agreement shall have
such defined meanings when otherwise defined herein.
ATTEST:
ESSEX GROUP, INC.
By:___________________
Name:
Title:
EXHIBIT B-2
FORM OF SENIOR NOTE INDENTURE
REVOLVING CREDIT INCURRENCE LIMIT CERTIFICATE
TO: THE CHASE MANHATTAN BANK DATE:____________
c/o Chase Securities Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: Essex Group, Inc.
Senior Note Indenture Revolving Credit Incurrence Limit Certificate
#:____________________
______________________________________________________________
We hereby certify the following information:
COMPUTATION OF SENIOR NOTE INDENTURE REVOLVING CREDIT INCURRENCE LIMIT:
(a) Total Accounts Receivable: $__________
(b) Receivables availability (80% advance): $__________
(c) Total Inventory: $__________
(d) Inventory availability (50% advance): $__________
(e) Total availability on A/R and Inventory
(sum of clause (b) and (d) above): $__________
(f) Indebtedness outstanding pursuant to Section 4.04(b)(i) of Senior
Note Indenture (other than L/C Obligations and Specified Basket
Debt):
$__________
$__________
$__________
Total: $__________
(g) Excess of clause (e) over clause (f): $__________
(h) (i) Indebtedness outstanding pursuant to Section 4.04(b)(x) of
Senior Note Indenture (other than L/C Obligations and
Specified Basket Debt):
$__________
$__________
$__________
2
Total: $__________
(ii) $25,000,000 less aggregate amount described in clause
(h)(i): $__________
(i) Sum of clauses (g) and (h)(ii) above: $__________
(j) (i) L/C Obligations presently outstanding: $__________
(ii) Specified Basket Debt presently outstanding: $______
(iii) Sum of clauses (j)(i) and (j)(ii): $______
(k) Amount of clause (j)(iii) cannot exceed amount of clause (i).
COMMENTS OR OTHER INFORMATION:
The undersigned hereby represents and warrants to The Chase Manhattan
Bank, as administrative agent (the "Administrative Agent") for the lenders
(the "Lenders") parties to the Credit Agreement, dated as of October 31,
1996 (the "Credit Agreement"), among BCP/Essex Holdings Inc., the Company,
the Administrative Agent and the Lenders, that the figures set forth
herein are accurate in all material respects and have been computed in
accordance with the Credit Agreement and the Senior Note Indenture. The
undersigned further warrants and represents that, to the best knowledge of
the undersigned, the Company is in complete compliance with all the terms
and conditions contained in the agreements between us. The undersigned
further understands that the Lenders' extensions of credit to the Company
will be based upon the reliance on the information contained herein.
Terms used herein which are defined in the Credit Agreement shall have
such defined meanings when otherwise defined herein.
ESSEX GROUP, INC.
By:_____________________________
Name:
Title:
EXHIBIT C-1
[FORM OF COMPETITIVE ADVANCE ACCEPT/REJECT LETTER]
__________, 199__
The Chase Manhattan Bank,
as Administrative Agent
c/o Chase Agent Bank Services Group
Grand Central Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Reference is made to the Credit Agreement, dated as of October
31, 1996, among BCP/Essex Holdings Inc., the undersigned, the Lenders
named therein and The Chase Manhattan Bank, as Administrative Agent (as
the same may be amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"). Terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
In accordance with Section 2.3(f) of the Credit Agreement, the
undersigned [rejects] [accepts and confirms] the offers by the Lender(s)
to make Competitive Loans to the undersigned on ________, 199__ under
Section 2.3 in the (respective) amount(s) set forth on the attached list
of Competitive Loans offered.
Very truly yours,
ESSEX GROUP, INC.
By:
----------------------------
Name:
Title:
[NOTE: The Company must attach the Competitive Loan offer list prepared
by the Administrative Agent with the [rejected] [accepted] amount entered
by the Company to the right of each Competitive Loan offer].
EXHIBIT C-2
[FORM OF COMPETITIVE ADVANCE INVITATION]
--------------, 199___
The Lenders of Essex Group, Inc.
(the "Lenders")
Reference is made to the Credit Agreement, dated as of
October 31, 1996, among BCP/Essex Holdings Inc., the Company, the Lenders
named therein and The Chase Manhattan Bank, as Administrative Agent (as
the same may be amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") and the Competitive Advance Request by the
Company, dated as of _______________, 199__. Terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
This is an invitation by the Company to each of the Lenders to
make a Competitive Advance Offer to the Company which pursuant to Section
2.3 of the Credit Agreement has requested offers for the following
Competitive Loans:
Loan 1 Loan 2 Loan 3
Aggregate Principal Amount $______ $______ $______
Date of Competitive Borrowing
Competitive Loan Maturity Date
Very truly yours,
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:
--------------------------
Name:
Title:
ESSEX GROUP, INC.
By:
--------------------------
Name:
Title:
EXHIBIT C-3
COMPETITIVE ADVANCE OFFER
, 199
The Chase Manhattan Bank, as Administrative Agent
c/o Chase Agent Bank Services Group
Grand Central Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Reference is made to the Credit Agreement, dated as of October
31, 1996, among BCP/Essex Holdings, Inc., the Company, the Lenders named
therein and The Chase Manhattan Bank, as Administrative Agent (as the same
may be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.
In accordance with Section 2.3 of the Credit Agreement, the
undersigned Lender offers**/ to make Competitive Loans thereunder in the
following amounts with the following maturity dates:
Date of Competitive Borrowing: Aggregate Principal Amount: $_______
_________, 199__
Competitive Loan Maturity Date 1: Maximum Amount: $________
_________, 199__ $________ offered at _______*
$________ offered at _______*
Competitive Loan Maturity Date 2: Maximum Amount: $________
_________, 199__ $________ offered at _______*
$________ offered at _______*
Competitive Loan Maturity Date 3: Maximum Amount: $________
_________, 199__ $________ offered at _______*
$________ offered at _______*
[NOTE: Insert the interest rate offered for the specified Competitive
Loan where indicated by an asterisk (*). In the case of Eurodollar
Competitive Loans, insert a Margin bid. In the case of Fixed Rate
Competitive Loans, insert a fixed rate bid.]
Very truly yours,
The Chase Manhattan Bank,
as Administrative Agent
By: ____________________________
Name:
Title:
Telephone No.:
Telecopy No.:
6
---------------
**/ Each Lender may make up to five separate offers with respect to each
Competitive Loaan requested in the related Competitive Advance Invitation.
EXHIBIT C-4
COMPETITIVE ADVANCE REQUEST
----------, 199_
The Chase Manhattan Bank, as Administrative Agent
c/o Chase Agent Bank Services Group
Grand Central Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Reference is made to the Credit Agreement, dated as of
October 31, 1996, among BCP/Essex Holdings, Inc., the Company, the Lenders
named therein and The Chase Manhattan Bank, as Administrative Agent (as
the same may be amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"). Terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
This is a [Fixed Rate] [Eurodollar] Competitive Loan Request
pursuant to Section 2.3 of the Credit Agreement requesting offers for the
following Competitive Loans:
Loan 1 Loan 2 Loan 3
Aggregate Principal Amount $______ $______ $______
Date of Competitive Borrowing
Competitive Loan Maturity Date
[NOTE: Pursuant to the Credit Agreement, a Competitive Advance
Request may be transmitted in writing, by telecopy, or by telephone,
immediately confirmed by telecopy. In any case, a Competitive
Advance Request shall contain the information specified in the
second paragraph of this form.]
Very truly yours,
[BORROWER]
By:
------------------------
Name:
Title:
EXHIBIT D-1
FORM OF COMPANY PLEDGE AGREEMENT
COMPANY PLEDGE AGREEMENT, dated as of October 31, 1996, made
by ESSEX GROUP, INC., a Michigan corporation (the "Pledgor"), in favor of
THE CHASE MANHATTAN BANK, as administrative agent (in such capacity, the
"Administrative Agent") for the lenders (the "Lenders") parties to the
Credit Agreement, dated as of October 31, 1996 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), among
the Pledgor, BCP/Essex Holdings Inc., the Lenders and the Administrative
Agent.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans to the Pledgor upon the terms and subject
to the conditions set forth therein;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to issue, or to participate in, Letters of Credit for the
account of the Pledgor upon the terms and subject to the conditions set
forth therein;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to, and to issue or participate in
Letters of Credit for the account of, the Pledgor under the Credit
Agreement that the Pledgor shall have executed and delivered this Pledge
Agreement to the Administrative Agent for the ratable benefit of the
Lenders; and
WHEREAS, each Issuer (as defined below) is a wholly owned
direct subsidiary of the Pledgor;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective Loans and
issue or participate in Letters of Credit under the Credit Agreement, the
Pledgor hereby agrees with the Administrative Agent, for the ratable
benefit of the Lenders, as follows:
1. Defined Terms. Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so used as
so defined, and the following terms shall have the following meanings:
"Code" means the Uniform Commercial Code from time to time in
effect in the State of New York.
"Collateral" means the Pledged Securities and all Proceeds
thereof.
"Issuers" means each Subsidiary of the Pledgor listed on
Schedule I hereto.
2
"Obligations" means the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity
of the Loans and Reimbursement Obligations and interest accruing
after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, relating to
the Pledgor whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Pledgor to the Administrative
Agent and the Lenders (or, in the case of any Interest Rate
Protection Agreement, 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, any Revolving Credit Notes,
any other Loan Document, the Letters of Credit or this Pledge
Agreement and any other document made, delivered or given in
connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, charges, indemnities,
costs, expenses (including, without limitation, all reasonable fees
and disbursements of counsel to the Administrative Agent and the
Lenders that are required to be paid by the Pledgor pursuant to the
terms of the Credit Agreement) or otherwise.
"Pledge Agreement" means this Pledge Agreement, as amended,
supplemented or otherwise modified from time to time.
"Pledged Notes" means all Intercompany Notes at any time
issued to the Pledgor and all other promissory notes issued to or
held by the Pledgor (other than promissory notes issued in
connection with extensions of trade credit by the Pledgor in the
ordinary course of business).
"Pledged Securities" means all of the Pledged Stock and
Pledged Notes.
"Pledged Stock" means the shares of capital stock listed on
Schedule I hereto, together with all stock certificates, options or
rights of any nature whatsoever that may be issued or granted by
such Issuer to the Pledgor in respect of the Pledged Stock while
this Pledge Agreement is in effect.
"Proceeds" means all "proceeds" as such term is defined in
Section 9-306(1) of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in any event, shall
include, without limitation, all dividends or other income from the
Pledged Securities, collections thereon or distributions with
respect thereto.
2. Pledge; Grant of Security Interest. The Pledgor hereby
delivers to the Administrative Agent, for the ratable benefit of the
Lenders, all the Pledged Securities and hereby grants to the
Administrative Agent, for the ratable benefit of the Lenders, a first
priority security interest in the Collateral, as collateral security for
the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations.
3
3. Stock Powers and Endorsements. Concurrently with the
delivery to the Administrative Agent of each certificate representing one
or more shares of Pledged Stock to the Administrative Agent, the Pledgor
shall deliver an undated stock power covering such certificate, duly
executed in blank by the Pledgor with, if the Administrative Agent so
requests, signature guaranteed. All Pledged Notes, when delivered, shall
be duly endorsed in blank.
4. Representations and Warranties. The Pledgor represents
and warrants that:
(a) the shares of Pledged Stock of each Issuer listed on
Schedule I constitute 100% (or, in the case of any Issuer which is a
Foreign Subsidiary, 65%) of the issued and outstanding shares of all
classes of the Capital Stock of such 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, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws generally affecting creditors' rights and by
general principles of equity (regardless of whether enforcement is
sought in equity or at law);
(d) the Pledgor is the record and beneficial owner of, and
has good and marketable title to, the Pledged Securities, free of
any and all Liens or options in favor of, or claims of, any other
Person, except the Lien created by this Pledge Agreement; and
(e) upon delivery to the Administrative Agent of the stock
certificates and instruments evidencing the Pledged Securities, the
Lien granted pursuant to this Pledge Agreement will constitute a
valid, perfected first priority Lien on the Collateral, enforceable
as such against all creditors of the Pledgor and any Persons
purporting to purchase any Collateral from the Pledgor (subject, in
the case of Proceeds, to Section 9-306 of the Code).
5. Covenants. The Pledgor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Pledge Agreement until the Obligations are paid in full and the Revolving
Credit Commitments are terminated:
(a) If the Pledgor shall, as a result of its ownership of the
Pledged Stock, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with
any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or
rights, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, the Pledgor shall accept the same as
the agent of the Administrative Agent and the Lenders, hold the same
4
in trust for the Administrative Agent and the Lenders and deliver
the same forthwith to the Administrative Agent in the exact form
received, duly endorsed by the Pledgor to the Administrative Agent,
if required, together with an undated stock power covering such
certificate duly executed in blank by the Pledgor and with, if the
Administrative Agent so requests, signature guaranteed, to be held
by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations. If an Event of
Default shall have occurred and be continuing, any sums paid upon or
in respect of the Pledged Securities upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative
Agent to be held by it hereunder as additional collateral security
for the Obligations, and in case any distribution of capital shall
be made on or in respect of the Pledged Securities or any property
shall be distributed upon or with respect to the Pledged Securities
pursuant to the recapitalization or reclassification of the capital
of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall be delivered to the Administrative
Agent to be held by it hereunder as additional collateral security
for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received
by the Pledgor while an Event of Default shall have occurred and be
continuing, the Pledgor shall, until such money or property is paid
or delivered to the Administrative Agent, hold such money or
property in trust for the Lenders, segregated from other funds of
the Pledgor, as additional collateral security for the Obligations.
(b) Without the prior written consent of the Administrative
Agent, the Pledgor will not (i) vote to enable, or take any other
action to permit, any Issuer to issue (other than to existing
stockholders on a proportionate basis) any stock or other equity
securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for
any stock or other equity securities of any nature of such Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Collateral other than pursuant
to a transaction permitted by the Credit Agreement, or (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 Collateral, or any
interest therein, except for the Lien provided for by this Pledge
Agreement. The Pledgor will defend the right, title and interest of
the Administrative Agent and the Lenders in and to the Collateral
against the claims and demands of all Persons whomsoever.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as
the Administrative Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement
and of the rights and powers herein granted. If any amount payable
under or in connection with any of the Collateral shall be or become
evidenced by any promissory note, other instrument or chattel paper,
such promissory note, other instrument or chattel paper shall be
immediately delivered to the Administrative Agent, duly endorsed in
5
a manner satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Pledge Agreement.
(d) The Pledgor agrees to pay, and to save the Administrative
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 Pledge
Agreement.
6. Cash Dividends and Other Distributions; Voting Rights.
Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to the Pledgor of the
Administrative Agent's intent to exercise its corresponding rights
pursuant to paragraph 7 below, the Pledgor shall be permitted to receive
all cash dividends in respect of the Pledged Stock and all payments in
respect of the Pledged Notes, in each case paid in the normal course of
business of each Issuer and consistent with past practice, to the extent
permitted in the Credit Agreement, and to exercise all voting and/or
corporate rights with respect to the Pledged Securities, provided,
however, that no vote shall be cast or corporate right exercised or other
action taken which, in the Administrative Agent's reasonable judgment,
would impair the Collateral or which would be inconsistent with or result
in any violation of any provision of the Credit Agreement, this Pledge
Agreement or the other Loan Documents. At the expense of the Pledgor, the
Administrative Agent shall execute and deliver to the Pledgor, or cause to
be executed and delivered to the Pledgor, all such proxies, powers of
attorney and other instruments as the Pledgor may reasonably request for
the purpose of enabling it to exercise the voting and/or corporate rights
and powers which it is entitled to exercise pursuant to this paragraph 6.
7. Rights of the Lenders and the Administrative Agent. (a)
If an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice of its intent to exercise
such rights to the Pledgor, (i) the Administrative Agent shall have the
right to receive any and all cash dividends and amounts payable in respect
of the Pledged Securities and make application thereof to the Obligations
in such order as the Administrative Agent may determine, and (ii) all
shares of the Pledged Securities shall be registered in or transferred to
the name of the Administrative Agent or its nominee, and the
Administrative Agent or its nominee may thereafter exercise (A) all
voting, corporate and other rights pertaining to the Pledged Securities at
any meeting of shareholders of each Issuer or otherwise and (B) any and
all rights of conversion, exchange, subscription and any other rights,
privileges or options pertaining to the Pledged Securities as if it were
the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Pledged Stock upon the
merger, consolidation, reorganization, recapitalization or other
fundamental change in the corporate structure of any Issuer, or upon the
exercise by the Pledgor or the Administrative Agent of any right,
privilege or option pertaining to such shares of the Pledged Stock, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Stock with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as it may
determine), all without liability except to account for property actually
6
received by it, but the Administrative Agent shall have no duty to the
Pledgor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
(b) The rights of the Administrative Agent and the Lenders
hereunder shall not be conditioned or contingent upon the pursuit by the
Administrative Agent or any Lender of any right or remedy against any
Issuer or against any other Person which may be or become liable in
respect of all or any part of the Obligations or against any collateral
security therefor, guarantee therefor or right of offset with respect
thereto. Neither the Administrative Agent nor any Lender shall be liable
for any failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so, nor shall the Administrative
Agent be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or any other Person or to take
any other action whatsoever with regard to the Collateral or any part
thereof.
8. Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted in this
Pledge Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a
secured party under the Code. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by law referred to below) to or upon the
Pledgor, any Issuer 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, assign, give
option or options to purchase or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing),
in one or more parcels at public or private sale or sales, in the over-
the-counter market, at any exchange, broker's board or office of the
Administrative Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of
any credit risk. The Administrative Agent or any 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 the Pledgor, which right or equity is hereby waived and released. The
Administrative Agent shall apply any Proceeds from time to time held by it
and the proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of
every kind incurred in respect thereof or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements of counsel to the Administrative Agent, to the payment in
whole or in part of the Obligations, in such order as the Administrative
Agent may elect, and only after such application and after the payment by
the Administrative Agent of any other amount required by any provision of
law, including, without limitation, Section 9-504(1)(c) of the Code, need
the Administrative Agent account for the surplus, if any, to the Pledgor.
7
To the extent permitted by applicable law, the Pledgor waives all claims,
damages and demands it may acquire against the Administrative Agent or any
Lender arising out of the exercise by them of any rights hereunder. If
any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition. The Pledgor
shall remain liable for any deficiency if the proceeds of any sale or
other disposition of the Collateral are insufficient to pay the
Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any Lender to collect such deficiency.
9. Registration Rights; Private Sales. (a) If the
Administrative Agent shall determine to exercise its right to sell any or
all of the Pledged Stock pursuant to paragraph 8 hereof, and if in the
opinion of the Administrative Agent it is necessary or advisable to have
the Pledged Stock, or that portion thereof to be sold, registered under
the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), the Pledgor will cause each Issuer to (i) execute and deliver, and
cause the directors and officers of such Issuer to execute and deliver,
all such instruments and documents, and do or cause to be done all such
other acts as may be, in the opinion of the Administrative Agent,
necessary or advisable to register the Pledged Stock, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii) to
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) to make all amendments thereto
and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with
the requirements of the Securities Act and the rules and regulations of
the Securities and Exchange Commission applicable thereto. The Pledgor
agrees to cause each Issuer to use its best efforts to comply with the
provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.
(b) The Pledgor recognizes that the Administrative Agent may
be unable to effect a public sale of any or all the Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and
applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of
purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view
to the distribution or resale thereof. The Pledgor 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 (even if the
Administrative Agent accepts the first offer received or offers the
Collateral or any portion thereof to only one offeree). The
Administrative Agent shall be under no obligation to delay a sale of any
of the Pledged Stock for the period of time necessary to permit such
Issuer to register such securities for public sale under the Securities
8
Act, or under applicable state securities laws, even if such Issuer would
agree to do so.
(c) The Pledgor further 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
paragraph 9 valid and binding and in compliance with any and all other
applicable Requirements of Law. The Pledgor further agrees that a breach
of any of the covenants contained in this paragraph 9 will cause
irreparable injury to the Administrative Agent and the Lenders, that the
Administrative Agent and the Lenders have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this paragraph 9 shall be specifically enforceable against
the Pledgor, and, to the extent permitted by applicable law, the Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event
of Default has occurred under the Credit Agreement.
10. Limitation on Duties Regarding Collateral. The
Administrative Agent's sole duty with respect to the custody, safekeeping
and physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it in the
same manner as the Administrative Agent deals with similar securities and
property for its own account. Except for the duty of the Administrative
Agent described in this paragraph 10, and the accounting by the
Administrative Agent for moneys actually received by it hereunder, neither
the Administrative Agent nor any Lender shall have any duties hereunder as
to any Collateral (including, without limitation, as to ascertaining any
matters or taking any action with respect to any Collateral or as to
taking any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral). Neither the Administrative
Agent, any Lender nor any of their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall
be under any obligation to sell or otherwise dispose of any Collateral
upon the request of the Pledgor or otherwise.
11. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable
and powers coupled with an interest.
12. Severability. Any provision of this Pledge Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
13. Paragraph Headings. The paragraph headings used in this
Pledge Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.
14. No Waiver; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
9
instrument pursuant to paragraph 15 hereof) be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default or in any breach of any of the terms and conditions hereof. No
failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right,
power or privilege. A waiver by the Administrative Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be construed
as a bar to any right or remedy which the Administrative Agent or such
Lender would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies
provided by law.
15. Waivers and Amendments; Successors and Assigns; Governing
Law. None of the terms or provisions of this Pledge Agreement may be
amended, supplemented or otherwise modified except in accordance with
Section 11.1 of the Credit Agreement. All references herein to Schedule I
hereto shall be deemed to be references to Schedule I hereto as the same
shall be supplemented from time to time as agreed in writing by the
Pledgor and the Administrative Agent. This Pledge Agreement shall be
binding upon the successors and assigns of the Pledgor and shall inure to
the benefit of the Administrative Agent and the Lenders and their
respective successors and assigns. This Pledge Agreement shall be
governed by, and construed and interpreted in accordance with, the laws of
the State of New York.
16. Notices. All notices, requests and demands hereunder
shall be given in accordance with Section 11.2 of the Credit Agreement.
17. Irrevocable Authorization and Instruction to Pledgor.
The Pledgor hereby authorizes and instructs each Issuer to comply with any
instruction received by it from the Administrative Agent in writing that
(a) states that an Event of Default has occurred and (b) is otherwise in
accordance with the terms of this Pledge Agreement, without any other or
further instructions from the Pledgor, and the Pledgor agrees that such
Issuer shall be fully protected in so complying.
18. Authority of Administrative Agent. The Pledgor
acknowledges that the rights and responsibilities of the Administrative
Agent under this Pledge Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or
remedy provided for herein or resulting or arising out of this Pledge
Agreement shall, as between the Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Pledgor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and
valid authority so to act or refrain from acting, and neither the Pledgor
nor any Issuer shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.
10
19. Termination. This Agreement and the security interest
created hereby shall terminate when all the Obligations shall have been
paid in full, the Revolving Credit Commitments shall have been terminated
and no Letters of Credit shall be outstanding, at which time the
Administrative Agent shall, at the request and expense of the Pledgor,
reassign and deliver (without recourse and without any representation or
warranty) to the Pledgor, or such person or persons as the Pledgor shall
designate, against receipt, such portion of the Collateral as shall not
have been sold or otherwise applied by the Administrative Agent pursuant
to the terms hereof and shall still be held by it hereunder, together with
appropriate instruments of reassignment and release; provided, that any
indemnity set forth herein shall survive any such termination. Upon any
sale or other disposition of the Collateral by the Pledgor expressly
permitted by the Credit Agreement, the Administrative Agent, at the
request and expense of the Pledgor, shall release the Collateral being
sold and shall reassign and deliver such Collateral to the Pledgor
(without recourse and without any representation or warranty), together
with appropriate instruments of reassignment and release; provided that
(i) at the time of such request and such release no Event of Default shall
have occurred and be continuing and (ii) the Pledgor shall have delivered
to the Administrative Agent, at least ten Business Days prior to the date
of the proposed release, a written request for release describing the item
of Collateral and the terms of the sale or other disposition in reasonable
detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Pledgor stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.
IN WITNESS WHEREOF, the undersigned has caused this Pledge Agreement
to be duly executed and delivered as of the date first above written.
ESSEX GROUP, INC.
By:_______________________________________________
Title:
ACKNOWLEDGEMENT AND CONSENT
Each Issuer referred to in the foregoing Pledge Agreement
hereby acknowledges receipt of a copy thereof, agrees to be bound thereby
and to comply with the terms thereof insofar as such terms are applicable
to it. Each Issuer agrees to notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in paragraph 5(a)
of the Pledge Agreement. Each Issuer further agrees that the terms of
paragraphs 9(a) and 9(c) of the Pledge Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
under or pursuant to or arising out of paragraph 9 of the Pledge
Agreement.
DIAMOND WIRE & CABLE CO.
By:______________________________
Name:
Title:
ESSEX GROUP EXPORT INC.
By:______________________________
Name:
Title:
ESSEX INTERNATIONAL, INC.
By:_____________________________
Name:
Title:
ESSEX INTERNATIONAL, INC.
By:_____________________________
Name:
Title:
US SAMICA CORPORATION
By:____________________________
Name:
Title:
Address for Notices for each of
the above Issuers:
c/o Essex Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
SCHEDULE 1
To Pledge
Agreement
DESCRIPTION OF PLEDGED STOCK
Stock
Class of Certificate No. of State of
Issuer Stock No. Shares Incorporation
------ -------- ----------- ------ ------------
Essex Common 1 100 Delaware
International,
Inc.
US Samica Common 3 43,200 Vermont
Corporation
Diamond Wire & Common 1 25 Illinois
Cable Co.
Essex Export Common 1 650 U.S. Virgin
Company, Inc. Islands
(predecessor
to Essex Group
Export Inc.)
Interstate Common B-2 42.656 Delaware
Industries
Holdings Inc.
EXHIBIT D-2
FORM OF HOLDINGS PLEDGE AGREEMENT
HOLDINGS PLEDGE AGREEMENT, dated as of October 31, 1996, made
by BCP/ESSEX HOLDINGS INC., a Delaware corporation (the "Pledgor"), in
favor of THE CHASE MANHATTAN BANK, as administrative agent (in such
capacity, the "Administrative Agent") for the lenders (the "Lenders")
parties to the Credit Agreement, dated as of October 31, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Pledgor, Essex Group, Inc., a Michigan corporation
(the "Issuer"), the Lenders and the Administrative Agent.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans to the Issuer upon the terms and subject to
the conditions set forth therein;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to issue, or to participate in, Letters of Credit for the
account of the Issuer upon the terms and subject to the conditions set
forth therein;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to, and to issue or participate in
Letters of Credit for the account of, the Issuer under the Credit
Agreement that the Pledgor shall have executed and delivered this Pledge
Agreement to the Administrative Agent for the ratable benefit of the
Lenders; and
WHEREAS, the Issuer is a wholly owned direct subsidiary of the
Pledgor;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective Loans and
issue or participate in Letters of Credit under the Credit Agreement, the
Pledgor hereby agrees with the Administrative Agent, for the ratable
benefit of the Lenders, as follows:
1. Defined Terms. Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so used as
so defined, and the following terms shall have the following meanings:
"Code" means the Uniform Commercial Code from time to time in
effect in the State of New York.
"Collateral" means the Pledged Securities and all Proceeds
thereof.
"Obligations" means obligations, liabilities and indebtedness
of the Pledgor under the guarantee contained in Section 10 of the
Credit Agreement.
2
"Pledge Agreement" means this Pledge Agreement, as amended,
supplemented or otherwise modified from time to time.
"Pledged Notes" means all Intercompany Notes at any time
issued to the Pledgor and all other promissory notes issued to or
held by the Pledgor.
"Pledged Securities" means all of the Pledged Stock and
Pledged Notes.
"Pledged Stock" means the shares of capital stock listed on
Schedule I hereto, together with all stock certificates, options or
rights of any nature whatsoever that may be issued or granted by the
Issuer to the Pledgor in respect of the Pledged Stock while this
Pledge Agreement is in effect.
"Proceeds" means all "proceeds" as such term is defined in
Section 9-306(1) of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in any event, shall
include, without limitation, all dividends or other income from the
Pledged Securities, collections thereon or distributions with
respect thereto.
2. Pledge; Grant of Security Interest. The Pledgor hereby
delivers to the Administrative Agent, for the ratable benefit of the
Lenders, all the Pledged Securities and hereby grants to the
Administrative Agent, for the ratable benefit of the Lenders, a first
priority security interest in the Collateral, as collateral security for
the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations.
3. Stock Powers and Endorsements. Concurrently with the
delivery to the Administrative Agent of each certificate representing one
or more shares of Pledged Stock to the Administrative Agent, the Pledgor
shall deliver an undated stock power covering such certificate, duly
executed in blank by the Pledgor with, if the Administrative Agent so
requests, signature guaranteed. All Pledged Notes, when delivered, shall
be duly endorsed in blank.
4. Representations and Warranties. The Pledgor represents
and warrants that:
(a) the shares of Pledged Stock listed on Schedule I
constitute 100% of the issued and outstanding shares of all classes
of the Capital Stock of the 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, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws generally affecting creditors' rights and by
3
general principles of equity (regardless of whether enforcement is
sought in equity or at law);
(d) the Pledgor is the record and beneficial owner of, and
has good and marketable title to, the Pledged Securities, free of
any and all Liens or options in favor of, or claims of, any other
Person, except the Lien created by this Pledge Agreement; and
(e) upon delivery to the Administrative Agent of the stock
certificates and instruments evidencing the Pledged Securities, the
Lien granted pursuant to this Pledge Agreement will constitute a
valid, perfected first priority Lien on the Collateral, enforceable
as such against all creditors of the Pledgor and any Persons
purporting to purchase any Collateral from the Pledgor (subject, in
the case of Proceeds, to Section 9-306 of the Code).
5. Covenants. The Pledgor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Pledge Agreement until the Obligations are paid in full and the Revolving
Credit Commitments are terminated:
(a) If the Pledgor shall, as a result of its ownership of the
Pledged Stock, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with
any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or
rights, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, the Pledgor shall accept the same as
the agent of the Administrative Agent and the Lenders, hold the same
in trust for the Administrative Agent and the Lenders and deliver
the same forthwith to the Administrative Agent in the exact form
received, duly endorsed by the Pledgor to the Administrative Agent,
if required, together with an undated stock power covering such
certificate duly executed in blank by the Pledgor and with, if the
Administrative Agent so requests, signature guaranteed, to be held
by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations. If an Event of
Default shall have occurred and be continuing, any sums paid upon or
in respect of the Pledged Securities upon the liquidation or
dissolution of the Issuer shall be paid over to the Administrative
Agent 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 Pledged Securities or any property
shall be distributed upon or with respect to the Pledged Securities
pursuant to the recapitalization or reclassification of the capital
of the Issuer or pursuant to the reorganization thereof, the
property so distributed shall be delivered to the Administrative
Agent to be held by it hereunder as additional collateral security
for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received
by the Pledgor while an Event of Default shall have occurred and be
continuing, the Pledgor shall, until such money or property is paid
or delivered to the Administrative Agent, hold such money or
4
property in trust for the Lenders, segregated from other funds of
the Pledgor, as additional collateral security for the Obligations.
(b) Without the prior written consent of the Administrative
Agent, the Pledgor will not (i) vote to enable, or take any other
action to permit, the 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 the Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Collateral, or (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 Collateral, or any
interest therein, except for the Lien provided for by this Pledge
Agreement. The Pledgor will defend the right, title and interest of
the Administrative Agent and the Lenders in and to the Collateral
against the claims and demands of all Persons whomsoever.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as
the Administrative Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement
and of the rights and powers herein granted. If any amount payable
under or in connection with any of the Collateral shall be or become
evidenced by any promissory note, other instrument or chattel paper,
such promissory note, other instrument or chattel paper shall be
immediately delivered to the Administrative Agent, duly endorsed in
a manner satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Pledge Agreement.
(d) The Pledgor agrees to pay, and to save the Administrative
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 Pledge
Agreement.
6. Cash Dividends and Other Distributions; Voting Rights.
Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to the Pledgor of the
Administrative Agent's intent to exercise its corresponding rights
pursuant to paragraph 7 below, the Pledgor shall be permitted to receive
all cash dividends in respect of the Pledged Stock and all payments in
respect of the Pledged Notes, in each case paid in the normal course of
business of the Issuer or obligor and consistent with past practice, to
the extent permitted in the Credit Agreement, and to exercise all voting
and/or corporate rights with respect to the Pledged Securities, provided,
however, that no vote shall be cast or corporate right exercised or other
action taken which, in the Administrative Agent's reasonable judgment,
would impair the Collateral or which would be inconsistent with or result
in any violation of any provision of the Credit Agreement, this Pledge
Agreement or the other Loan Documents. At the expense of the Pledgor, the
Administrative Agent shall execute and deliver to the Pledgor, or cause to
5
be executed and delivered to the Pledgor, all such proxies, powers of
attorney and other instruments as the Pledgor may reasonably request for
the purpose of enabling it to exercise the voting and/or corporate rights
and powers which it is entitled to exercise pursuant to this paragraph 6.
7. Rights of the Lenders and the Administrative Agent. (a)
If an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice of its intent to exercise
such rights to the Pledgor, (i) the Administrative Agent shall have the
right to receive any and all cash dividends (other than dividends
expressly permitted by Section 7.8(a) of the Credit Agreement and
dividends to be used for the purpose referred to in the parenthetical
contained in Section 7.8(b) of the Credit Agreement) and amounts payable
in respect of the Pledged Securities and make application thereof to the
Obligations in such order as the Administrative Agent may determine, and
(ii) all shares of the Pledged Securities shall be registered in or
transferred to the name of the Administrative Agent or its nominee, and
the Administrative Agent or its nominee may thereafter exercise (A) all
voting, corporate and other rights pertaining to the Pledged Securities at
any meeting of shareholders of the Issuer or otherwise and (B) any and all
rights of conversion, exchange, subscription and any other rights,
privileges or options pertaining to the Pledged Securities as if it were
the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Pledged Stock upon the
merger, consolidation, reorganization, recapitalization or other
fundamental change in the corporate structure of the Issuer, or upon the
exercise by the Pledgor or the Administrative Agent of any right,
privilege or option pertaining to such shares of such Pledged Stock, and
in connection therewith, the right to deposit and deliver any and all of
such Pledged Stock with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as it
may determine), all without liability except to account for property
actually received by it, but the Administrative Agent shall have no duty
to the Pledgor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
(b) The rights of the Administrative Agent and the Lenders
hereunder shall not be conditioned or contingent upon the pursuit by the
Administrative Agent or any Lender of any right or remedy against the
Issuer or against any other Person which may be or become liable in
respect of all or any part of the Obligations or against any collateral
security therefor, guarantee therefor or right of offset with respect
thereto. Neither the Administrative Agent nor any Lender shall be liable
for any failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so, nor shall the Administrative
Agent be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or any other Person or to take
any other action whatsoever with regard to the Collateral or any part
thereof.
8. Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted in this
Pledge Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a
secured party under the Code. Without limiting the generality of the
6
foregoing, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by law referred to below) to or upon the
Pledgor, the Issuer 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, assign, give
option or options to purchase or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing),
in one or more parcels at public or private sale or sales, in the over-
the-counter market, at any exchange, broker's board or office of the
Administrative Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of
any credit risk. The Administrative Agent or any 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 the Pledgor, which right or equity is hereby waived and released. The
Administrative Agent shall apply any Proceeds from time to time held by it
and the proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of
every kind incurred in respect thereof or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements of counsel to the Administrative Agent, to the payment in
whole or in part of the Obligations, in such order as the Administrative
Agent may elect, and only after such application and after the payment by
the Administrative Agent of any other amount required by any provision of
law, including, without limitation, Section 9-504(1)(c) of the Code, need
the Administrative Agent account for the surplus, if any, to the Pledgor.
To the extent permitted by applicable law, the Pledgor waives all claims,
damages and demands it may acquire against the Administrative Agent or any
Lender arising out of the exercise by them of any rights hereunder. If
any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition. The Pledgor
shall remain liable for any deficiency if the proceeds of any sale or
other disposition of the Collateral are insufficient to pay the
Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any Lender to collect such deficiency. The
Pledgor further waives and agrees not to assert any rights or privileges
which it may acquire under Section 9-112 of the Code.
9. Registration Rights; Private Sales. (a) If the
Administrative Agent shall determine to exercise its right to sell any or
all of the Pledged Stock pursuant to paragraph 8 hereof, and if in the
opinion of the Administrative Agent it is necessary or advisable to have
the Pledged Stock, or that portion thereof to be sold, registered under
the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), the Pledgor will cause the Issuer to (i) execute and deliver, and
cause the directors and officers of the Issuer to execute and deliver, all
such instruments and documents, and do or cause to be done all such other
acts as may be, in the opinion of the Administrative Agent, necessary or
advisable to register the Pledged Stock, or that portion thereof to be
7
sold, under the provisions of the Securities Act, (ii) to 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) to make all amendments thereto and/or to the related
prospectus which, in the opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto. The Pledgor agrees to cause the
Issuer to use its best efforts to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the
Securities Act.
(b) The Pledgor recognizes that the Administrative Agent may
be unable to effect a public sale of any or all the Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and
applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of
purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view
to the distribution or resale thereof. The Pledgor 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 (even if the
Administrative Agent accepts the first offer received or offers the
Collateral or any portion thereof to only one offeree). The
Administrative Agent shall be under no obligation to delay a sale of any
of the Pledged Stock for the period of time necessary to permit the Issuer
to register such securities for public sale under the Securities Act, or
under applicable state securities laws, even if the Issuer would agree to
do so.
(c) The Pledgor further 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
paragraph 9 valid and binding and in compliance with any and all other
applicable Requirements of Law. The Pledgor further agrees that a breach
of any of the covenants contained in this paragraph 9 will cause
irreparable injury to the Administrative Agent and the Lenders, that the
Administrative Agent and the Lenders have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this paragraph 9 shall be specifically enforceable against
the Pledgor, and, to the extent permitted by applicable law, the Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event
of Default has occurred under the Credit Agreement.
10. Limitation on Duties Regarding Collateral. The
Administrative Agent's sole duty with respect to the custody, safekeeping
and physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it in the
same manner as the Administrative Agent deals with similar securities and
8
property for its own account. Except for the duty of the Administrative
Agent described in this paragraph 10, and the accounting by the
Administrative Agent for moneys actually received by it hereunder, neither
the Administrative Agent nor any Lender shall have any duties hereunder as
to any Collateral (including, without limitation, as to ascertaining any
matters or taking any action with respect to any Collateral or as to
taking any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral). Neither the Administrative
Agent, any Lender nor any of their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall
be under any obligation to sell or otherwise dispose of any Collateral
upon the request of the Pledgor or otherwise.
11. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable
and powers coupled with an interest.
12. Severability. Any provision of this Pledge Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
13. Paragraph Headings. The paragraph headings used in this
Pledge Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.
14. No Waiver; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to paragraph 15 hereof) be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default or in any breach of any of the terms and conditions hereof. No
failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right,
power or privilege. A waiver by the Administrative Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be construed
as a bar to any right or remedy which the Administrative Agent or such
Lender would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies
provided by law.
15. Waivers and Amendments; Successors and Assigns; Governing
Law. None of the terms or provisions of this Pledge Agreement may be
amended, supplemented or otherwise modified except in accordance with
Section 11.1 of the Credit Agreement. All references herein to Schedule I
hereto shall be deemed to be references to Schedule I hereto as the same
shall be supplemented from time to time as agreed in writing by the
Pledgor and the Administrative Agent. This Pledge Agreement shall be
9
binding upon the successors and assigns of the Pledgor and shall inure to
the benefit of the Administrative Agent and the Lenders and their
respective successors and assigns. This Pledge Agreement shall be
governed by, and construed and interpreted in accordance with, the laws of
the State of New York.
16. Notices. All notices, requests and demands given
hereunder shall be given in accordance with Section 11.2 of the Credit
Agreement.
17. Irrevocable Authorization and Instruction to Issuer. The
Pledgor hereby authorizes and instructs the Issuer to comply with any
instruction received by it from the Administrative Agent in writing that
(a) states that an Event of Default has occurred and (b) is otherwise in
accordance with the terms of this Pledge Agreement, without any other or
further instructions from the Pledgor, and the Pledgor agrees that the
Issuer shall be fully protected in so complying.
18. Authority of Administrative Agent. The Pledgor
acknowledges that the rights and responsibilities of the Administrative
Agent under this Pledge Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or
remedy provided for herein or resulting or arising out of this Pledge
Agreement shall, as between the Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Pledgor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and
valid authority so to act or refrain from acting, and neither the Pledgor
nor the Issuer shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.
19. Termination. This Agreement and the security interest
created hereby shall terminate when all the Obligations shall have been
paid in full, the Revolving Credit Commitments shall have been terminated
and no Letters of Credit shall be outstanding, at which time the
Administrative Agent shall, at the request and expense of the Pledgor,
reassign and deliver (without recourse and without any representation or
warranty) to the Pledgor, or such person or persons as the Pledgor shall
designate, against receipt, such portion of the Collateral as shall not
have been sold or otherwise applied by the Administrative Agent pursuant
to the terms hereof and shall still be held by it hereunder, together with
appropriate instruments of reassignment and release; provided, that any
indemnity set forth herein shall survive any such termination.
IN WITNESS WHEREOF, the undersigned has caused this Pledge
Agreement to be duly executed and delivered as of the date first above
written.
BCP/ESSEX HOLDINGS INC.
By:__________________________
Name:
10
Title:
ACKNOWLEDGEMENT AND CONSENT
The Issuer referred to in the foregoing Pledge Agreement
hereby acknowledges receipt of a copy thereof, agrees to be bound thereby
and to comply with the terms thereof insofar as such terms are applicable
to it. The Issuer agrees to notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in paragraph 5(a)
of the Pledge Agreement. The Issuer further agrees that the terms of
paragraphs 9(a) and 9(c) of the Pledge Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
under or pursuant to or arising out of paragraph 9 of the Pledge
Agreement.
ESSEX GROUP, INC.
By_____________________________
Name:
Title:
Address for Notices:
_______________________________
_______________________________
_______________________________
Telex: _______________________
Rapifax: _____________________
SCHEDULE 1
To Pledge
Agreement
DESCRIPTION OF PLEDGED STOCK
Stock
Class of Certificate No. of State of
Issuer Stock No. Shares Incorporation
------ -------- ----------- ------ -------------
Essex Group, Common 4 100 Michigan
Inc.
EXHIBIT D-3
FORM OF SUBSIDIARY PLEDGE AGREEMENT
SUBSIDIARY PLEDGE AGREEMENT, dated as of October 31, 1996,
made by the parties signatories hereto (each, a "Pledgor"; collectively,
the "Pledgors"), in favor of THE CHASE MANHATTAN BANK, as administrative
agent (in such capacity, the "Administrative Agent") for the lenders (the
"Lenders") parties to the Credit Agreement, dated as of October 31, 1996
(as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among BCP/Essex Holdings Inc., Essex Group, Inc. (the
"Company"), a Michigan corporation, the Lenders and the Administrative
Agent.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans to the Company upon the terms and subject
to the conditions set forth therein;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to issue, or to participate in, Letters of Credit for the
account of the Company upon the terms and subject to the conditions set
forth therein;
WHEREAS, the Pledgors are parties to the Subsidiary Guarantee,
dated as of April __, 1995 (as the same may be from time to time amended,
supplemented or modified, the "Subsidiary Guarantee");
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to, and to issue or participate in
Letters of Credit for the account of, the Company under the Credit
Agreement that the Pledgors shall have executed and delivered this Pledge
Agreement to the Administrative Agent for the ratable benefit of the
Lenders; and
WHEREAS, each Issuer (as defined below) is a [wholly owned]
direct subsidiary of the Pledgor listed immediately above such Issuer's
name on Schedule I hereto;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective Loans and
issue or participate in Letters of Credit under the Credit Agreement, each
Pledgor hereby agrees with the Administrative Agent, for the ratable
benefit of the Lenders, as follows:
1. Defined Terms. Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so used as
so defined, and the following terms shall have the following meanings:
"Code" means the Uniform Commercial Code from time to time in
effect in the State of New York.
2
"Collateral" means the Pledged Securities and all Proceeds
thereof; with respect to the representations, warranties and
covenants made by each Pledgor in Paragraphs 4 and 5 hereof, each
reference to "Collateral" shall be deemed to refer to the Collateral
in which such Pledgor has granted or hereby grants or purports to
grant a security interest under this Pledge Agreement.
"Issuers" means the collective reference to each issuer listed
on Schedule I hereto, immediately beneath the name of the Pledgor of
which it is a Subsidiary.
"Obligations" means, with respect to any Pledgor, all
obligations, liabilities and indebtedness of such Pledgor under the
Subsidiary Guarantee.
"Pledge Agreement" means this Pledge Agreement, as amended,
supplemented or otherwise modified from time to time.
"Pledged Notes" means all Intercompany Notes at any time
issued to any Pledgor and all other promissory notes issued to or
held by any Pledgor (other than promissory notes issued in
connection with extensions of trade credit by any Pledgor in the
ordinary course of business).
"Pledged Securities" means all of the Pledged Stock and
Pledged Notes.
"Pledged Stock" means the shares of capital stock of each
Issuer listed on Schedule I hereto, together with all stock
certificates, options or rights of any nature whatsoever that may be
issued or granted by such Issuer to any Pledgor in respect of the
Pledged Stock while this Pledge Agreement is in effect.
"Proceeds" means all "proceeds" as such term is defined in
Section 9-306(1) of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in any event, shall
include, without limitation, all dividends or other income from the
Pledged Securities, collections thereon or distributions with
respect thereto.
2. Pledge; Grant of Security Interest. Each Pledgor hereby
delivers to the Administrative Agent, for the ratable benefit of the
Lenders, all the Pledged Securities and hereby grants to the
Administrative Agent, for the ratable benefit of the Lenders, a first
priority security interest in the Collateral owned by such Pledgor, as
collateral security for the prompt and complete payment and performance
when due (whether at the stated maturity, by acceleration or otherwise) of
the Obligations.
3. Stock Powers and Endorsements. Concurrently with the
delivery to the Administrative Agent of each certificate representing one
or more shares of Pledged Stock to the Administrative Agent, the relevant
Pledgor shall deliver an undated stock power covering such certificate,
duly executed in blank by such Pledgor with, if the Administrative Agent
so requests, signature guaranteed. All Pledged Notes, when delivered,
shall be duly endorsed in blank.
3
4. Representations and Warranties. Each Pledgor represents
and warrants that:
(a) the shares of Pledged Stock pledged by such Pledgor
hereunder constitute 100% (or, in the case of any Issuer which is a
Foreign Subsidiary, 65%) of all the issued and outstanding shares of
all classes of the Capital Stock of each of the Issuers;
(b) all the shares of the Pledged Stock pledged by such
Pledgor hereunder have been duly and validly issued and are fully
paid and nonassessable;
(c) each of the Pledged Notes pledged by such Pledgor
hereunder constitutes the legal, valid and binding obligation of the
obligor with respect thereto, enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws generally
affecting creditors' rights and by general principles of equity
(regardless of whether enforcement is sought in equity or at law);
(d) such Pledgor is the record and beneficial owner of, and
has good and marketable title to, the Pledged Securities pledged by
such Pledgor hereunder, free of any and all Liens or options in
favor of, or claims of, any other Person, except the Lien created by
this Pledge Agreement; and
(e) upon delivery to the Administrative Agent of the stock
certificates and instruments evidencing the Pledged Securities
pledged by such Pledgor hereunder, the Lien granted pursuant to this
Pledge Agreement will constitute a valid, perfected first priority
Lien on such Pledged Securities and the proceeds thereof,
enforceable as such against all creditors of such Pledgor and any
Persons purporting to purchase such Collateral from such Pledgor
(subject, in the case of Proceeds, to Section 9-306 of the Code).
5. Covenants. Each Pledgor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Pledge Agreement until the Obligations are paid in full and the Revolving
Credit Commitments are terminated:
(a) If such Pledgor shall, as a result of its ownership of
the Pledged Stock, become entitled to receive or shall receive any
stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with
any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or
rights, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Pledgor shall accept the same as
the agent of the Administrative Agent and the Lenders, hold the same
in trust for the Administrative Agent and the Lenders and deliver
the same forthwith to the Administrative Agent in the exact form
received, duly endorsed by such Pledgor to the Administrative Agent,
if required, together with an undated stock power covering such
certificate duly executed in blank by such Pledgor and with, if the
4
Administrative Agent so requests, signature guaranteed, to be held
by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations. If an Event of
Default shall have occurred and be continuing, any sums paid upon or
in respect of the Pledged Securities upon the liquidation or
dissolution of any Issuer shall be paid over to the Administration
Agent 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 Pledged Securities or any property
shall be distributed upon or with respect to the Pledged Securities
pursuant to the recapitalization or reclassification of the capital
of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall be delivered to the Administrative
Agent to be held by it hereunder as additional collateral security
for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received
by such Pledgor while an Event of Default shall have occurred and be
continuing, such Pledgor shall, until such money or property is paid
or delivered to the Administrative Agent, hold such money or
property in trust for the Lenders, segregated from other funds of
such Pledgor, as additional collateral security for the Obligations.
(b) Without the prior written consent of the Administrative
Agent, such Pledgor will not (i) vote to enable, or take any other
action to permit, any Issuer to issue (other than existing
stockholders on a proportionate basis) any stock or other equity
securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for
any stock or other equity securities of any nature of such Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Collateral other than pursuant
to a transaction permitted by the Credit Agreement, or (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 Collateral, or any
interest therein, except for the Lien provided for by this Pledge
Agreement. Such Pledgor will defend the right, title and interest
of the Administrative Agent and the Lenders in and to the Collateral
pledged by it hereunder against the claims and demands of all
Persons whomsoever.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such
Pledgor, such Pledgor will promptly and duly execute and deliver
such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purposes
of obtaining or preserving the full benefits of this Pledge
Agreement and of the rights and powers herein granted. If any
amount payable under or in connection with any of the Collateral
pledged by such Pledgor hereunder shall be or become evidenced by
any promissory note, other instrument or chattel paper, such
promissory note, other instrument or chattel paper shall be
immediately delivered to the Administrative Agent, duly endorsed in
a manner satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Pledge Agreement.
5
(d) Such Pledgor agrees to pay, and to save the
Administrative 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
pledged by it hereunder or in connection with any of the
transactions contemplated by this Pledge Agreement.
6. Cash Dividends and Other Distributions; Voting Rights.
Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to such Pledgor of the
Administrative Agent's intent to exercise its corresponding rights
pursuant to paragraph 7 below, each Pledgor shall be permitted to receive
all cash dividends in respect of the Pledged Stock and all payments in
respect of the Pledged Notes, in each case paid in the normal course of
business of each Issuer or obligor and consistent with past practice, to
the extent permitted in the Credit Agreement, and to exercise all voting
and/or corporate rights with respect to the Pledged Securities, provided,
however, that no vote shall be cast or corporate right exercised or other
action taken which, in the Administrative Agent's reasonable judgment,
would impair the Collateral or which would be inconsistent with or result
in any violation of any provision of the Credit Agreement, this Pledge
Agreement or the other Loan Documents. At the expense of the Pledgor, the
Administrative Agent shall execute and deliver to the Pledgor, or cause to
be executed and delivered to the Pledgor, all such proxies, powers of
attorney and other instruments as the Pledgor may reasonably request for
the purpose of enabling it to exercise the voting and/or corporate rights
and powers which it is entitled to exercise pursuant to this paragraph 6.
7. Rights of the Lenders and the Administrative Agent. (a)
If an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice of its intent to exercise
such rights to any Pledgor, (i) the Administrative Agent shall have the
right to receive any and all cash dividends and amounts payable in respect
of the Pledged Securities pledged by such Pledgor and make application
thereof to the Obligations in such order as the Administrative Agent may
determine, and (ii) all shares of the Pledged Securities pledged by such
Pledgor shall be registered in or transferred to the name of the
Administrative Agent or its nominee, and the Administrative Agent or its
nominee may thereafter exercise (A) all voting, corporate and other rights
pertaining to the Pledged Securities at any meeting of shareholders of
each Issuer or otherwise and (B) any and all rights of conversion,
exchange, subscription and any other rights, privileges or options
pertaining to the Pledged Securities as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its
discretion any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of any Issuer, or upon the exercise by
such Pledgor or the Administrative Agent of any right, privilege or option
pertaining to such shares of such Pledged Stock, and in connection
therewith, the right to deposit and deliver any and all of such Pledged
Stock with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine), all
without liability except to account for property actually received by it,
but the Administrative Agent shall have no duty to any Pledgor to exercise
6
any such right, privilege or option and shall not be responsible for any
failure to do so or delay in so doing.
(b) The rights of the Administrative Agent and the Lenders
hereunder shall not be conditioned or contingent upon the pursuit by the
Administrative Agent or any Lender of any right or remedy against any
Issuer or against any other Person which may be or become liable in
respect of all or any part of the Obligations or against any collateral
security therefor, guarantee therefor or right of offset with respect
thereto. Neither the Administrative Agent nor any Lender shall be liable
for any failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so, nor shall the Administrative
Agent be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Pledgor or any other Person or to take
any other action whatsoever with regard to the Collateral or any part
thereof.
8. Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted in this
Pledge Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a
secured party under the Code. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by law referred to below) to or upon any
Pledgor, any Issuer 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, assign, give
option or options to purchase or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing),
in one or more parcels at public or private sale or sales, in the over-
the-counter market, at any exchange, broker's board or office of the
Administrative Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of
any credit risk. The Administrative Agent or any 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 Pledgor, which right or equity is hereby waived and released. The
Administrative Agent shall apply any Proceeds from time to time held by it
and the proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of
every kind incurred in respect thereof or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements of counsel to the Administrative Agent, to the payment in
whole or in part of the Obligations, in such order as the Administrative
Agent may elect, and only after such application and after the payment by
the Administrative Agent of any other amount required by any provision of
law, including, without limitation, Section 9-504(1)(c) of the Code, need
the Administrative Agent account for the surplus, if any, to any Pledgor.
To the extent permitted by applicable law, each Pledgor waives all claims,
7
damages and demands it may acquire against the Administrative Agent or any
Lender arising out of the exercise by them of any rights hereunder. If
any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition. Each
Pledgor shall remain liable for any deficiency if the proceeds of any sale
or other disposition of the Collateral are insufficient to pay the
Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any Lender to collect such deficiency. Each
Pledgor further waives and agrees not to assert any rights or privileges
which it may acquire under Section 9-112 of the Code.
9. Registration Rights; Private Sales. (a) If the
Administrative Agent shall determine to exercise its right to sell any or
all of the Pledged Stock pursuant to paragraph 8 hereof, and if in the
opinion of the Administrative Agent it is necessary or advisable to have
the Pledged Stock, or that portion thereof to be sold, registered under
the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), each Pledgor will cause each Issuer of the Pledged Stock owned by
such Pledgor to (i) execute and deliver, and cause the directors and
officers of each Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in
the opinion of the Administrative Agent, necessary or advisable to
register such Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) to 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 such Pledged Stock, or that portion thereof to be sold,
and (iii) to make all amendments thereto and/or to the related prospectus
which, in the opinion of the Administrative Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act
and the rules and regulations of the Securities and Exchange Commission
applicable thereto. Each Pledgor agrees to cause each Issuer to use its
best efforts to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the Administrative Agent shall
designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.
(b) Each Pledgor recognizes that the Administrative Agent may
be unable to effect a public sale of any or all the Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and
applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of
purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view
to the distribution or resale thereof. Each Pledgor 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 (even if the
Administrative Agent accepts the first offer received or offers the
Collateral or any portion thereof to only one offeree). The
Administrative Agent shall be under no obligation to delay a sale of any
of the Pledged Stock for the period of time necessary to permit any Issuer
to register such securities for public sale under the Securities Act, or
8
under applicable state securities laws, even if such Issuer would agree to
do so.
(c) Each Pledgor further 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
paragraph 9 valid and binding and in compliance with any and all other
applicable Requirements of Law. Each Pledgor further agrees that a breach
of any of the covenants contained in this paragraph 9 will cause
irreparable injury to the Administrative Agent and the Lenders, that the
Administrative Agent and the Lenders have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this paragraph 9 shall be specifically enforceable against
such Pledgor, and, to the extent permitted by applicable law, each Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event
of Default has occurred under the Credit Agreement.
10. Limitation on Duties Regarding Collateral. The
Administrative Agent's sole duty with respect to the custody, safekeeping
and physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it in the
same manner as the Administrative Agent deals with similar securities and
property for its own account. Except for the duty of the Administrative
Agent described in this paragraph 10, and the accounting by the
Administrative Agent for moneys actually received by it hereunder, neither
the Administrative Agent nor any Lender shall have any duties hereunder as
to any Collateral (including, without limitation, as to ascertaining any
matters or taking any action with respect to any Collateral or as to
taking any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral). Neither the Administrative
Agent, any Lender nor any of their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall
be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Pledgor or otherwise.
11. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable
and powers coupled with an interest.
12. Severability. Any provision of this Pledge Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
13. Paragraph Headings. The paragraph headings used in this
Pledge Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.
14. No Waiver; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
9
instrument pursuant to paragraph 15 hereof) be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default or in any breach of any of the terms and conditions hereof. No
failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right,
power or privilege. A waiver by the Administrative Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be construed
as a bar to any right or remedy which the Administrative Agent or such
Lender would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies
provided by law.
15. Waivers and Amendments; Successors and Assigns; Governing
Law. None of the terms or provisions of this Pledge Agreement may be
amended, supplemented or otherwise modified except in accordance with
Section 11.1 of the Credit Agreement. All references herein to Schedule I
hereto shall be deemed to be references to Schedule I hereto as the same
shall be supplemented from time to time as agreed in writing by the
Pledgor and the Administrative Agent. This Pledge Agreement shall be
binding upon the successors and assigns of each Pledgor and shall inure to
the benefit of the Administrative Agent and the Lenders and their
respective successors and assigns. This Pledge Agreement shall be
governed by, and construed and interpreted in accordance with, the laws of
the State of New York.
16. Notices. All notices, requests and demands given
hereunder shall be given in accordance with Paragraph 16 of the Subsidiary
Guarantee.
17. Irrevocable Authorization and Instruction to Issuers.
Each Pledgor hereby authorizes and instructs each Issuer to comply with
any instruction received by it from the Administrative Agent in writing
that (a) states that an Event of Default has occurred and (b) is otherwise
in accordance with the terms of this Pledge Agreement, without any other
or further instructions from such Pledgor, and such Pledgor agrees that
such Issuer shall be fully protected in so complying.
18. Authority of Administrative Agent. Each Pledgor
acknowledges that the rights and responsibilities of the Administrative
Agent under this Pledge Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or
remedy provided for herein or resulting or arising out of this Pledge
Agreement shall, as between the Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and such Pledgor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and
valid authority so to act or refrain from acting, and neither such Pledgor
nor any Issuer shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.
10
19. Termination. This Agreement and the security interest
created hereby shall terminate when all the Obligations shall have been
paid in full, the Revolving Credit Commitments shall have been terminated
and no Letters of Credit shall be outstanding, at which time the
Administrative Agent shall, at the request and expense of the Company,
reassign and deliver (without recourse and without any representation or
warranty) to the relevant Pledgor, or such person or persons as the
Company shall designate, against receipt, such portion of the Collateral
as shall not have been sold or otherwise applied by the Administrative
Agent pursuant to the terms hereof and shall still be held by it
hereunder, together with appropriate instruments of reassignment and
release; provided, that any indemnity set forth herein shall survive any
such termination. Upon any sale or other disposition of the Collateral by
any Pledgor expressly permitted by the Credit Agreement, the
Administrative Agent, at the request and expense of the Company, shall
release the Collateral being sold and shall reassign and deliver such
Collateral to the relevant Pledgor (without recourse and without any
representation or warranty), together with appropriate instruments of
reassignment and release; provided that the Company shall have delivered
to the Administrative Agent, at least ten Business Days prior to the date
of the proposed release, a written request for release describing the item
of Collateral and the terms of the sale or other disposition in reasonable
detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Company stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents. At the request and expense of the Company, a Pledgor shall be
released from its obligations hereunder in the event that all the capital
stock of such Pledgor shall be sold, transferred or otherwise disposed of
in accordance with the terms of the Credit Agreement; provided that the
Company shall have delivered to the Administrative Agent, at least ten
Business Days prior to the date of the proposed release, a written request
for release identifying the relevant Pledgor and the terms of the sale or
other disposition in reasonable detail, including the price thereof and
any expenses in connection therewith, together with a certification by the
Company stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.
IN WITNESS WHEREOF, each of the undersigned has caused this
Pledge Agreement to be duly executed and delivered as of the date first
above written.
DIAMOND WIRE & CABLE CO.
By:____________________________
Name:
Title:
ESSEX GROUP EXPORT INC.
By:____________________________
Name:
Title:
11
ESSEX INTERNATIONAL, INC.
By:____________________________
Name:
Title:
US SAMICA CORPORATION
By:____________________________
Name:
Title:
INTERSTATE INDUSTRIES HOLDINGS
INC.
By:___________________________
Name:
Title:
INTERSTATE INDUSTRIES, INC.
By:__________________________
Name:
Title:
ACKNOWLEDGEMENT AND CONSENT
Each Issuer referred to in the foregoing Pledge Agreement
hereby acknowledges receipt of a copy thereof, agrees to be bound thereby
and to comply with the terms thereof insofar as such terms are applicable
to it. Each Issuer agrees to notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in paragraph 5(a)
of the Pledge Agreement. Each Issuer further agrees that the terms of
paragraphs 9(a) and 9(c) of the Pledge Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
under or pursuant to or arising out of paragraph 9 of the Pledge
Agreement.
INTERSTATE INDUSTRIES, INC.
By_____________________________
Name:
Title:
Address for Notices:
c/o Essex Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇-▇▇▇-▇▇▇▇
SCHEDULE 1
To Pledge
Agreement
DESCRIPTION OF PLEDGED STOCK
Stock
Class of Certificate No. of State of
Issuer Stock No. Shares Incorporation
------ -------- ----------- ------ -------------
Interstate Common 37 100 Mississippi
Industries,
Inc.
EXHIBIT E-1
FORM OF COMPANY SECURITY AGREEMENT
COMPANY SECURITY AGREEMENT, dated as of October 31, 1996, made
by ESSEX GROUP, INC., a Michigan corporation (the "Company"), in favor of
THE CHASE MANHATTAN BANK, as administrative agent (in such capacity, the
"Administrative Agent") for the lenders (the "Lenders") parties to the
Credit Agreement, dated as of October 31, 1996 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement") among the
Company, BCP/Essex Holdings Inc., the Lenders and the Administrative
Agent.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans to the Company upon the terms and subject
to the conditions set forth therein;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to issue, or to participate in, Letters of Credit for the
account of the Company upon the terms and subject to the conditions set
forth therein; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to, and to issue or participate in
Letters of Credit for the account of, the Company under the Credit
Agreement that the Company shall have executed and delivered this Security
Agreement to the Administrative Agent for the ratable benefit of the
Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective Loans and
issue or participate in Letters of Credit under the Credit Agreement, the
Company hereby agrees with the Administrative Agent, for the ratable
benefit of the Lenders, as follows:
1. Defined Terms. Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so used as
so defined; the following terms which are defined in the Uniform
Commercial Code in effect in the State of New York on the date hereof are
used herein as so defined: Accounts, Chattel Paper, Documents, Equipment,
Farm Products, General Intangibles, Instruments, Inventory and Proceeds;
and the following terms shall have the following meanings:
"Code" means the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Collateral" shall have the meaning assigned to it in
Section 2 of this Security Agreement, provided, that
Collateral shall not include any property which is subject to
a Lien permitted under Section 7.3 of the Credit Agreement
securing Indebtedness permitted under Section 7.2 of the
Credit Agreement to the extent that the grant of a security
2
interest hereunder would be prohibited by such Lien or by the
terms of such Indebtedness (but only so long as such
prohibition is in effect).
"Contracts" means all contracts, agreements, instruments
and indentures in any form, and portions thereof, to which the
Company is a party or under which the Company has any right,
title or interest or to which the Company or any property of
the Company is subject, as the same may from time to time be
amended, supplemented or otherwise modified, including,
without limitation, (a) all rights of the Company to receive
moneys due and to become due to it thereunder or in connection
therewith, (b) all rights of the Company to damages arising
out of, or for, breach or default in respect thereof and (c)
all rights of the Company to perform and to exercise all
remedies thereunder, in each case to the extent the grant by
the Company of a security interest pursuant to this Security
Agreement in its right, title and interest in such contract,
agreement, instrument or indenture is not prohibited by such
contract, agreement, instrument or indenture without the
consent of any other party thereto, or is permitted with
consent if all necessary consents to such grant of a security
interest have been obtained from the other parties thereto (it
being understood that the foregoing shall not be deemed to
obligate the Company to obtain such consents); provided, that
the foregoing limitation shall not affect, limit, restrict or
impair the grant by the Company of a security interest
pursuant to this Security Agreement in any Account or any
money or other amounts due or to become due under any such
contract, agreement, instrument or indenture.
"Intellectual Property" means (a) all intellectual and similar
property of the Company of every kind and nature now owned or
hereafter acquired by the Company, including, without limitation,
inventions, designs, patents, copyrights, licenses and license
agreements (whether the Company is the licensor or the licensee
under such agreements), trademarks, trade names and other business
names, logos, trade secrets, confidential or proprietary technical
and business information, know-how, show-how or other data or
information, software and databases and all embodiments or fixations
thereof and related documentation, registrations, applications and
franchises, and all additions, improvements and accessions to, and
books and records describing or used in connection with, any of the
foregoing and including, without limitation, any thereof referred to
in Schedule I hereto and (b) all renewals thereof. Notwithstanding
the foregoing, licenses and license agreements as to which the
Company is the licensee shall constitute "Intellectual Property" for
the purposes of this Agreement only to the extent the grant by the
Company of a security interest pursuant to this Security Agreement
in its right, title and interest in such license or license
agreement is not prohibited by such license or license agreement
without the consent of any other party thereto, or is permitted with
consent if all necessary consents to such grant of a security
interest have been obtained from the other parties thereto (it being
understood that the foregoing shall not be deemed to obligate the
Company to obtain such consents); provided, that the foregoing
3
limitation shall not affect, limit, restrict or impair the grant by
the Company of a security interest pursuant to this Security
Agreement in any Account or any money or other amounts due or to
become due under any such license or license agreement.
"Obligations" means the unpaid principal amount of and
interest on (including, without limitation, interest accruing
after the maturity of the Loans and Reimbursement Obligations
and interest accruing 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) the Loans and all
other obligations and liabilities of the Company to the
Administrative Agent and the Lenders (or, in the case of any
Interest Rate Protection Agreement, 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, any Revolving Credit Notes, any other Loan
Document, the Letters of Credit or this Security Agreement and
any other document made, delivered or given in connection
therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all reasonable fees
and disbursements of counsel to the Administrative Agent and
the Lenders that are required to be paid by the Company
pursuant to the terms of the Credit Agreement) or otherwise.
"Security Agreement" means this Security Agreement, as
amended, supplemented or otherwise modified from time to time.
"Vehicles" means all cars, trucks, trailers,
construction and earth moving equipment and other vehicles
covered by a certificate of title law of any state and all
tires and other appurtenances to any of the foregoing.
2. Grant of Security Interest. As collateral security for
the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations, the
Company hereby grants to the Administrative 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 the Company or in which the
Company now has or at any time in the future may acquire any right, title
or interest (collectively, the "Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
4
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Intellectual Property;
(ix) all Inventory; and
(x) to the extent not otherwise included, all
Proceeds and products of any and all of the foregoing.
3. Rights of Administrative Agent and Lenders; Limitations on
Administrative Agent's and Lenders' Obligations; Limitation on
Administrative Agent's and Lenders' Interest in Tolled Inventory.
(a) Company Remains Liable under Accounts and Contracts.
Anything herein to the contrary notwithstanding, the Company shall remain
liable under each of the Accounts and Contracts to observe and perform all
the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
to each such Account and in accordance with and pursuant to the terms and
provisions of each such Contract. Neither the Administrative Agent nor
any Lender shall have any obligation or liability under any Account (or
any agreement giving rise thereto) or under any Contract by reason of or
arising out of this Security Agreement or the receipt by the
Administrative Agent or any such Lender of any payment relating to such
Account or Contract pursuant hereto, nor shall the Administrative Agent or
any Lender be obligated in any manner to perform any of the obligations of
the Company under or pursuant to any Account (or any agreement giving rise
thereto) or under or pursuant to any Contract, to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
under any Account (or any agreement giving rise thereto) or under any
Contract, 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.
(b) Notice to Account Debtors and Contracting Parties. Upon
the request of the Administrative Agent at any time after the occurrence
and during the continuance of an Event of Default, the Company shall
notify account debtors on the Accounts and parties to the Contracts that
the Accounts and the Contracts have been assigned to the Administrative
Agent for the ratable benefit of the Lenders and that payments in respect
thereof shall be made directly to the Administrative Agent. Upon the
occurrence and during the continuance of an Event of Default, the
Administrative Agent may in its own name or in the name of others
communicate with account debtors on the Accounts and parties to the
Contracts to verify with them to its satisfaction the existence, amount
and terms of any Accounts or Contracts.
(c) Analysis of Accounts. The Administrative Agent shall
have the right to make test verifications of the Accounts in any manner
and through any medium that it reasonably considers advisable at any
reasonable time and as often as may reasonably be desired, and the Company
shall furnish all such assistance and information as the Administrative
Agent may reasonably require in connection therewith. If an Event of
5
Default shall have occurred and be continuing, then upon the
Administrative Agent's request and at the expense of the Company, the
Company shall cause independent public accountants or others satisfactory
to the Administrative Agent to furnish to the Administrative Agent reports
showing reconciliations, aging and test verifications of, and trial
balances for, the Accounts.
(d) Collections on Accounts. The Administrative Agent hereby
authorizes the Company to collect the Accounts, provided, that the
Administrative Agent may curtail or terminate said authority at any time
upon the occurrence and during the continuance of an Event of Default. If
an Event of Default shall have occurred and be continuing, any payments of
Accounts, when collected by the Company, shall be forthwith (and, in any
event, within two Business Days) deposited by the Company in the exact
form received, duly endorsed by the Company to the Administrative Agent if
required, in a special collateral account maintained by the Administrative
Agent, subject to withdrawal by the Administrative Agent for the account
of the Administrative Agent and the Lenders only, as hereinafter provided,
and, until so turned over, shall be held by the Company in trust for the
Administrative Agent and the Lenders, segregated from other funds of the
Company. Each deposit of any such Proceeds shall be accompanied by a
report identifying in reasonable detail the nature and source of the
payments included in the deposit. All Proceeds constituting collections
of Accounts while held by the Administrative Agent (or by the Company in
trust for the Administrative Agent and the Lenders) shall continue to be
collateral security for all of the Obligations and shall not constitute
payment thereof until applied as hereinafter provided. At any time at the
Administrative Agent's election, the Administrative Agent shall apply all
or any part of the funds on deposit in said special collateral account on
account of the Obligations in such order as the Administrative Agent may
elect, and any part of such funds which the Administrative 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 Administrative
Agent to the Company or to whomsoever may be lawfully entitled to receive
the same. At the Administrative Agent's reasonable request, the Company
shall deliver to, or make available for review by, the Administrative
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Accounts, including,
without limitation, all original orders, invoices and shipping receipts.
(e) Tolled Inventory. If any third Person (a "Tolling
Party") delivers possession of, but not title to, any raw materials, work-
in-process or other goods ("Tolled Inventory") pursuant to a bailment
arrangement with the Company under which such Tolled Inventory is to be
processed, improved or otherwise altered by the Company, the
Administrative Agent agrees and acknowledges that any security interest in
or lien upon Inventory created hereby does not apply to any Tolled
Inventory which is owned by the Tolling Party (rather than owned by the
Company subject to a retention of title by the Tolling Party which has the
effect of creating a security interest in favor of the Tolling Party which
remains unperfected). Notwithstanding anything in this Security Agreement
to the contrary, the Company shall be entitled to follow its normal
tolling practices and may deliver Tolled Inventory to or for the account
of any Tolling Party free of the lien of this Security Agreement.
6
4. Representations and Warranties . The Company hereby
represents and warrants that:
(a) Title; No Other Liens. Except for the Lien granted
to the Administrative Agent for the ratable benefit of the
Lenders pursuant to this Security Agreement and the other
Liens permitted to exist on the Collateral pursuant to the
Credit Agreement, the Company owns each item of the Collateral
free and clear of any and all Liens or claims of others. No
security agreement, 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 that would serve to grant
the Person who filed such security agreement, financing
statement or other public notice a perfected security interest
in or lien on such Collateral, except such as may have been
filed in favor of the Administrative Agent, for the ratable
benefit of the Lenders, pursuant to this Security Agreement or
as may be permitted pursuant to the Credit Agreement.
(b) Perfected First Priority Liens. Upon filing of
financing statements in the relevant offices identified in
Schedule 4.20(b) to the Credit Agreement, the Liens granted
pursuant to this Security Agreement constitute perfected Liens
on the Collateral in favor of the Administrative Agent, for
the ratable benefit of the Lenders, which are prior to all
other Liens on the Collateral created by the Company and in
existence on the date hereof (except other Liens expressly
permitted by the Credit Agreement) and which are enforceable
as such against all creditors of and purchasers from the
Company and against any owner or purchaser of the real
property where any of the Equipment is located and any present
or future creditor obtaining a Lien on such real property,
except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws
generally affecting creditors' rights and by general
principles of equity (regardless of whether enforcement is
sought in equity or at law).
(c) Accounts. The amount represented by the Company to
the Lenders from time to time as owing by each account debtor
or by all account debtors in respect of the Accounts will at
such time be the correct amount actually owing by such account
debtor or debtors thereunder. Except as otherwise provided in
Section 5(a) hereof, no amount payable to the Company under or
in connection with any Account is evidenced by any Instrument
or Chattel Paper which has not been delivered to the
Administrative Agent. The place where the Company keeps its
records concerning the Accounts is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
(d) Inventory and Equipment. The Inventory and the
Equipment are kept at the locations listed on Schedule II
hereto or such other location specified pursuant to Section
5(n).
7
(e) Chief Executive Office. The Company's chief
executive office and chief place of business is located at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other
location specified pursuant to Section 5(n).
(f) Farm Products; Vehicles. None of the Collateral
constitutes, or is the Proceeds of, Farm Products. No Vehicle
owned by the Company has a book value in excess of $50,000,
other than Vehicles as to which the Company has taken steps of
the type described in clauses (i) and (ii) of Section 6.10(a)
of the Credit Agreement (to the extent, and only to the
extent, reasonably requested by the Administrative Agent).
(g) Intellectual Property. Set forth on Schedule I is
a complete and accurate list of all patents, trademarks, trade
names, service marks and copyrights, and all applications
therefor and licenses thereof, of the Company on the Effective
Date, showing as of the Effective Date the jurisdiction in
which registered, the registration number, the date of
registration and the expiration date. The Company owns, or is
licensed to use, all trademarks, trade names, copyrights,
technology, know-how and processes necessary for the conduct
of its business as currently conducted except for those the
failure to own or license which could not reasonably be
expected to materially impair the value of the Collateral. No
claim has been asserted and is pending by any Person
challenging or questioning the use of any trademark, trade
name, copyright, technology, know-how or process necessary for
the conduct of its business as currently conducted, nor does
Company know of any valid basis for any such claim, the use of
the same by the Company does not infringe on the rights of any
Person and, to the knowledge of the Company, no Intellectual
Property has been infringed, misappropriated or diluted by any
other Person except for such claims, infringements,
misappropriations and dilutions that, in the aggregate, could
not reasonably be expected to materially impair the value of
the Collateral.
5. Covenants. The Company covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Security Agreement until the Obligations are paid in full, the Revolving
Credit Commitments are terminated and no Letters of Credit shall be
outstanding:
(a) Further Documentation; Pledge of Instruments and
Chattel Paper. At any time and from time to time, upon the
written request of the Administrative Agent, and at the sole
expense of the Company, the Company will promptly and duly
execute and deliver such further instruments and documents and
take such further action as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving
the full benefits of this Security Agreement and of the rights
and powers herein granted, including, without limitation, the
filing of any financing or continuation statements under the
Uniform Commercial Code in effect in any jurisdiction with
respect to the Liens created hereby. The Company also hereby
8
authorizes the Administrative Agent to file any such financing
or continuation statement without the signature of the Company
to the extent permitted by applicable law. A carbon,
photographic or other reproduction of this Security Agreement
shall be sufficient as a financing statement for filing in any
jurisdiction. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any
Instrument or Chattel Paper having a principal amount in
excess of $25,000, such Instrument or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly
endorsed in a manner satisfactory to the Administrative Agent,
to be held as Collateral pursuant to this Security Agreement;
provided that in no event shall the aggregate principal amount
of Instruments and Chattel Paper evidencing amounts payable
under or in connection with any Collateral (as such terms are
defined in the Company Security Agreement or the Subsidiary
Security Agreement, as the case may be) which have not been
delivered to the Administrative Agent pursuant to such
Security Agreements exceed $100,000 at any one time
outstanding.
(b) Indemnification. The Company agrees to pay, and to
save the Administrative Agent and the Lenders harmless from,
any and all liabilities, costs and expenses (including,
without limitation, reasonable legal fees and expenses) (i)
with respect to, or resulting from any delay in paying, any
and all excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral
or (ii) with respect to, or resulting from, any delay in
complying with any Requirement of Law applicable to any of the
Collateral. In any suit, proceeding or action brought by the
Administrative Agent in accordance with the terms hereof under
any Account or Contract for any sum owing thereunder, or to
enforce any provisions of any Account or Contract, the Company
will save, indemnify and keep harmless the Administrative
Agent and each Lender from and against all expense, loss or
damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction or liability whatsoever
of the account debtor or obligor thereunder, arising out of a
breach by the Company of any obligation thereunder or arising
out of any other agreement, indebtedness or liability at any
time owing to or in favor of such account debtor or obligor or
its successors from the Company.
(c) Maintenance of Records. The Company will keep and
maintain at its own cost and expense satisfactory and complete
records of the Collateral, including, without limitation, a
record of all payments received and all credits granted with
respect to the Accounts. The Company will mark its books and
records pertaining to the Collateral to evidence this Security
Agreement and the security interests granted hereby. For the
Administrative Agent's and the Lenders' further security, the
Administrative Agent, for the ratable benefit of the Lenders,
shall have a security interest in all of the Company's books
and records pertaining to the Collateral.
9
(d) Right of Inspection. The Administrative Agent
shall at any reasonable time or times during normal business
hours have access to all the books, correspondence and records
of the Company, and the Administrative Agent and its
representatives may examine the same, take extracts therefrom
and make photocopies thereof, and the Company agrees to render
to the Administrative Agent, at the Company's cost and expense
to the extent expressly provided in Section 11.5 of the Credit
Agreement, such clerical and other assistance as may be
reasonably requested with regard thereto. The Administrative
Agent and its representatives shall at any reasonable time or
times during normal business hours also have the right to
enter into and upon any premises where any of the Inventory or
Equipment is located (or, in the case of any such premises not
owned or leased by the Company or any of its Subsidiaries, the
Company shall use its best efforts to grant to the
Administrative Agent such right) for the purpose of inspecting
the same, observing its use or otherwise protecting the
Administrative Agent's and the Lenders' interests therein.
(e) Compliance with Laws, etc. The Company will comply
in all material respects with all Requirements of Law
applicable to the Collateral or any part thereof or to the
operation of the Company's business, except where failure to
satisfy the foregoing requirement could not reasonably be
expected to have a material adverse effect on the value of the
Collateral taken as a whole or, with respect to any material
portion of the Collateral, have a material adverse effect on
the perfection or priority of the Liens contemplated hereby
relating to such Collateral; provided, however, that the
Company may contest any Requirement of Law in any reasonable
manner which shall not, in the sole opinion of the
Administrative Agent, adversely affect the Administrative
Agent's or the Lenders' rights or the priority of their Liens
on the Collateral.
(f) Limitation on Liens on Collateral. The Company
will not create, incur or permit to exist, will defend the
Collateral against, and will take such other action as is
necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby and other than
as permitted pursuant to the Credit Agreement, and will defend
the right, title and interest of the Administrative Agent and
the Lenders in and to any of the Collateral against the claims
and demands of all Persons whomsoever.
(g) Limitations on Dispositions of Collateral. The
Company will not sell, transfer, lease or otherwise dispose of
any of the Collateral, or attempt, offer or contract to do so,
except as expressly permitted by the Credit Agreement.
(h) Limitations on Modifications, Waivers, Extensions
of Agreements Giving Rise to Accounts. The Company will not
(i) except in the ordinary course of business consistent with
historical practices as of the date hereof, amend, modify,
terminate or waive any provision of any agreement giving rise
10
to an Account in any manner which could reasonably be expected
to materially adversely affect the value of Collateral taken
as a whole, (ii) fail to exercise promptly and diligently each
and every material right which it may have under each
agreement giving rise to an Account (other than any right of
termination), except in a manner consistent with the ordinary
and customary conduct of business as generally conducted by
the Company over a period of time or (iii) fail to deliver to
the Administrative Agent a copy of each material demand,
notice or document received by it relating in any way to any
material agreement giving rise to an Account which affects
the interests of the Administrative Agent and the Lenders
hereunder.
(i) Limitations on Discounts, Compromises, Extensions
of Accounts. Other than in the ordinary course of business as
generally conducted by the Company over a period of time, the
Company will not, without the prior written consent of the
Administrative Agent, grant any extension of the time of
payment of any of the Accounts, compromise, compound or settle
the same for less than the full amount thereof, release,
wholly or partially, any Person liable for the payment
thereof, or allow any credit or discount whatsoever thereon.
(j) Maintenance of Equipment. The Company will
maintain each item of Equipment in good operating condition,
ordinary wear and tear and immaterial impairments of value and
damage by the elements excepted, and will provide all
maintenance, service and repairs necessary for such purpose.
(k) Maintenance of Insurance. The Company will
maintain, with financially sound and reputable companies,
insurance policies (i) insuring the Inventory and Equipment
against loss by fire, explosion, theft and such other
casualties as are usually insured against by companies engaged
in the same or similar business and (ii) insuring the Company
and the Administrative Agent, for the benefit of the Lenders,
against liability for personal injury and property damage
relating to such Inventory and Equipment, such policies to be
in such form and amounts and having such coverage as may be
reasonably satisfactory to the Administrative Agent, such
losses of $1 million or more shall be payable to the Company
and the Administrative Agent, for the benefit of the Lenders,
as their respective interests may appear. All such insurance
shall (i) to the extent requested by the Administrative Agent,
provide for a 30-day standard cancellation notice, (ii) name
the Administrative Agent, for the benefit of the Lenders, as
an insured party and as loss payee and (iii) be reasonably
satisfactory in all other respects to the Administrative
Agent. If reasonably requested by the Administrative Agent,
the Company shall deliver to the Administrative Agent and the
Lenders a report of a reputable insurance broker with respect
to such insurance, and such supplemental reports with respect
thereto as the Administrative Agent may from time to time
reasonably request.
11
(l) Further Identification of Collateral. The Company
will furnish to the Administrative Agent and the Lenders from
time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection
with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.
(m) Notices. The Company will advise the
Administrative Agent and the Lenders promptly, in reasonable
detail, at their respective addresses set forth in the Credit
Agreement, (i) of any Lien (other than Liens created hereby or
permitted under the Credit Agreement) on, or claim asserted
against, any of the Collateral and (ii) 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 taken as a whole or, with respect to any material
portion of the Collateral, have a material adverse effect on
the perfection or priority of the Liens contemplated hereby
relating to such Collateral.
(n) Changes in Locations, Name, etc. The Company will
not (i) change the location of its chief executive
office/chief place of business from that specified in Section
4(e) hereof or remove its books and records from the location
specified in Section 4(c) hereof, (ii) permit any of the
Inventory or Equipment to be kept at a location other than
those listed on Schedule II hereto or (iii) change its name,
identity or corporate structure to such an extent that any
financing statement filed by the Administrative Agent in
connection with this Security Agreement would become seriously
misleading, unless (x) the Company shall have given the
Administrative Agent at least 30 days' prior written notice
thereof (in the case of clauses (i) and (iii) above) or at
least one Business Day's prior written notice thereof (in the
case of clause (ii) above) and (y) the Company shall have
taken, and shall continue to take, all steps necessary to
ensure that the Administrative Agent, for the benefit of the
Lenders, shall have, and shall continue to have, a fully
perfected first priority security interest in the Collateral
(subject to Liens permitted by the Credit Agreement)
notwithstanding such actions.
(o) Intellectual Property. The Company will preserve all of
its registered trademarks, trade names, service marks and other
Intellectual Property, the non-preservation of which would have a
reasonable likelihood of materially impairing the value of the
Collateral taken as a whole. Whenever the Company, either by itself
or through any agent, employee, licensee or designee, shall file an
application for the registration of any patent or trademark with the
United States Patent and Trademark Office or any similar office or
agency in any other country or any political subdivision thereof,
the Company shall report such filing to the Administrative Agent and
the Lenders within five Business Days after the last day of the
fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, the Company shall execute and deliver any and
all agreements, instruments, documents, and papers as the
12
Administrative Agent may reasonably request to evidence the
Administrative Agent's and the Lenders' security interest in any
patent or trademark and the goodwill and General Intangibles of the
Company relating thereto or represented thereby, and the Company
hereby constitutes the Administrative Agent its attorney-in-fact to
execute and file all such writings for the foregoing purposes, all
acts of such attorney being hereby ratified and confirmed; such
power being coupled with an interest is irrevocable until the
Obligations are paid in full and the Revolving Credit Commitments
are terminated. In the event that any material Intellectual
Property is infringed, misappropriated or diluted by a third party
in any material respect, the Company shall promptly notify the
Administrative Agent after it learns thereof.
(p) Government Obligors. If at any time the aggregate amount
owing on (i) all Accounts and Contracts as to which a Governmental
Authority is an obligor and (ii) all "Accounts" and "Contracts"
under and as defined in the Subsidiary Security Agreement as to
which a Governmental Authority is an obligor (collectively, "Total
Government Accounts and Contracts"), exceeds 5% of the aggregate
amount owing on (i) all Accounts and Contracts and (ii) all
"Accounts" and "Contracts" under and as defined in the Subsidiary
Security Agreement ( collectively, "Total Accounts and Contracts"),
the Company shall, if requested by the Administrative Agent, at the
Company's sole cost and expense, from and after the date on which
such aggregate amount first exceeds such percentage (regardless of
whether the aggregate amount owing on the Total Government Accounts
and Contracts shall equal less than 5% of the aggregate amount owing
on the Total Accounts and Contracts at any subsequent time), deliver
to the Administrative Agent such assignments, notices of assignment
and other documents or information as shall be necessary or
otherwise requested by the Administrative Agent to permit the
assignment hereunder of all Accounts and Contracts as to which a
Governmental Authority is an obligor pursuant to all applicable
Requirements of Law (including, without limitation, the Assignment
of Claims Act of 1940, as amended).
6. Administrative Agent's Appointment as Attorney-in-Fact.
(a) Powers. The Company hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of the Company
and in the name of the Company or in its own name, from time to time in
the Administrative Agent's discretion, for the purpose of carrying out the
terms of this Security 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 Security
Agreement, and, without limiting the generality of the foregoing, the
Company hereby gives the Administrative Agent the power and right, on
behalf of the Company, without notice to or assent by the Company, to do
the following:
(i) at any time when any Event of Default shall have
occurred and is continuing, in the name of the Company or its
own name, or otherwise, to take possession of and endorse and
13
collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Account,
Instrument, General Intangible or Contract or with respect to
any other Collateral and to file any claim or to take any
other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for
the purpose of collecting any and all such moneys due under
any Account, Instrument, General Intangible or Contract or
with respect to any other Collateral whenever payable;
(ii) in each case to the extent not paid, discharged
or effected by the Company as required by this Security
Agreement or the Credit Agreement, to pay or discharge taxes
and Liens levied or placed on or threatened against the
Collateral, to effect any repairs or any insurance called for
by the terms of this Security Agreement and to pay all or any
part of the premiums therefor and the costs thereof; and
(iii) upon the occurrence and during the continuance of
any Event of Default, (A) to direct any party liable for any
payment under any of the Collateral to make payment of any and
all moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall
direct; (B) to ask or demand for, collect, receive payment of
and receipt for, any and all moneys, claims and other amounts
due or to become due at any time in respect of or arising out
of any Collateral; (C) to sign and endorse 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; (D) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court
of competent jurisdiction to collect the Collateral or any
thereof and to enforce any other right in respect of any
Collateral; (E) to defend any suit, action or proceeding
brought against the Company with respect to any Collateral;
(F) to settle, compromise or adjust any suit, action or
proceeding described in clause (E) above and, in connection
therewith, to give such discharges or releases as the
Administrative Agent may deem appropriate; (G) to assign any
Intellectual Property (along with the goodwill of the business
to which any such Intellectual Property pertains), throughout
the world for such term or terms, on such conditions, and in
such manner, as the Administrative Agent shall in its sole
discretion determine; and (H) generally, to sell, transfer,
pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as
though the Administrative Agent were the absolute owner
thereof for all purposes, and to do, at the Administrative
Agent's option and the Company's expense, at any time, or from
time to time, all acts and things which the Administrative
Agent deems necessary to protect, preserve or realize upon the
Collateral and the Administrative Agent's and the Lenders'
Liens thereon and to effect the intent of this Security
Agreement, all as fully and effectively as the Company might
do.
14
The Company hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable.
(b) Other Powers. The Company also authorizes the
Administrative Agent, at any time and from time to time, to execute, in
connection with any sale provided for in Section 9 hereof, any
endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.
(c) No Duty on Administrative Agent or Lenders' Part. The
powers conferred on the Administrative Agent and the Lenders hereunder are
solely to protect the Administrative Agent's and the Lenders' interests in
the Collateral and shall not impose any duty upon the Administrative Agent
or any Lender to exercise any such powers. Except for the duty of the
Administrative Agent described in Section 10 hereof, and the accounting by
the Administrative Agent for moneys actually received by it hereunder,
neither the Administrative Agent nor any Lender shall have any duties
hereunder as to any Collateral (including, without limitation, as to
ascertaining any matters or taking any action with respect to any
Collateral or as to taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to Collateral). The
Administrative Agent and the Lenders shall be accountable only for amounts
that they actually receive as a result of the exercise of the powers
conferred on the Administrative Agent and the Lenders hereunder, and
neither they nor any of their officers, directors, employees or agents
shall be responsible to the Company for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
7. Performance by Administrative Agent of Company's
Obligations. If the Company fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as provided for
by the terms of this Security Agreement, shall itself perform or comply,
or otherwise cause performance or compliance, with such agreement, the
expenses of the Administrative Agent incurred in connection with such
performance or compliance, together with interest thereon at a rate per
annum equal to the Alternate Base Rate plus the Applicable Margin plus 2%,
shall be payable by the Company to the Administrative Agent on demand and
shall constitute Obligations secured hereby. The Administrative Agent
agrees to notify the Company promptly after incurring any expenses
pursuant to this Section 7, provided that the failure of the
Administrative Agent to so notify the Company shall in no way impair the
rights of the Administrative Agent under this Section 7.
8. Proceeds. In addition to the rights of the Administrative
Agent and the Lenders specified in Section 3(d) hereof with respect to
payments of Accounts, it is agreed that if an Event of Default shall occur
and be continuing (a) the Administrative Agent may require, by notice to
the Company, all Proceeds received by the Company consisting of cash,
checks and other near-cash items to be held by the Company in trust for
the Administrative Agent and the Lenders, segregated from other funds of
the Company, and shall, forthwith upon receipt by the Company, be turned
over to the Administrative Agent in the exact form received by the Company
(duly endorsed by the Company to the Administrative Agent, if required),
and (b) any and all such Proceeds received by the Administrative Agent
(whether from the Company or otherwise) may, in the sole discretion of the
15
Administrative Agent, be held by the Administrative Agent for the ratable
benefit of the Lenders as collateral security for, and/or then or at any
time thereafter may be applied by the Administrative Agent against, the
Obligations (whether matured or unmatured), such application to be in such
order as the Administrative Agent shall elect. Any balance of such
Proceeds remaining after the Obligations shall have been paid in full, the
Revolving Credit Commitments shall have been terminated and no Letters of
Credit shall be outstanding shall be paid over to the Company or to
whomsoever may be lawfully entitled to receive the same.
9. Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted to them in
this Security Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a
secured party under the Code. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by law referred to below) to or upon the
Company or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral,
or any part thereof, and/or may forthwith sell, lease, assign, give option
or options to purchase, or otherwise dispose of and deliver the Collateral
or any part thereof (or contract to do any of the foregoing), in one or
more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Administrative Agent or any Lender or elsewhere
upon such terms and conditions as it may deem advisable and at such prices
as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any 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 the Company, which right or equity is hereby
waived and released. The Company further agrees, at the Administrative
Agent's request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall
reasonably select, whether at the Company's premises or elsewhere. The
Administrative Agent shall apply the proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental
to the care or safekeeping of any of the Collateral or in any way relating
to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of the
Obligations, in such order as the Administrative Agent may elect, and only
after such application and after the payment by the Administrative Agent
of any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the Code, need the Administrative Agent
account for the surplus, if any, to the Company. To the extent permitted
by applicable law, the Company waives all claims, damages and demands it
may acquire against the Administrative Agent or any Lender arising out of
the exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition. The Company shall remain liable
16
for any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Obligations and the fees and
disbursements of any attorneys employed by the Administrative Agent or any
Lender to collect such deficiency.
10. Limitation on Duties Regarding Preservation of
Collateral. The Administrative Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal
with it in the same manner as the Administrative Agent deals with similar
property for its own account. Neither the Administrative Agent, any
Lender, nor any of their respective directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon all
or any part of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon
the request of the Company or otherwise.
11. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable
and powers coupled with an interest.
12. Severability. Any provision of this Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
13. Paragraph Headings. The paragraph headings used in this
Security Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.
14. No Waiver; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 15 hereof), 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 or in any breach of any
of the terms and conditions hereof. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. A waiver by the Administrative Agent
or any Lender of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Administrative
Agent or such Lender would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any rights or remedies
provided by law.
15. Waivers and Amendments; Successors and Assigns; Governing
Law. None of the terms or provisions of this Security Agreement may be
waived, amended, supplemented or otherwise modified except in accordance
with Section 11.1 of the Credit Agreement. This Security Agreement shall
17
be binding upon the successors and assigns of the Company and shall inure
to the benefit of the Administrative Agent and the Lenders and their
respective successors and assigns. This Security Agreement shall be
governed by, and construed and interpreted in accordance with, the laws of
the State of New York.
16. Notices. All notices, requests and demands hereunder
shall be given in accordance with Section 11.2 of the Credit Agreement.
17. Authority of Administrative Agent. The Company
acknowledges that the rights and responsibilities of the Administrative
Agent under this Security Agreement with respect to any action taken by
the Administrative Agent or the exercise or non-exercise by the
Administrative Agent of any option, right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this
Security Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements
with respect thereto as may exist from time to time among them, but, as
between the Administrative Agent and the Company, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with
full and valid authority so to act or refrain from acting, and the Company
shall not be under any obligation, or entitlement, to make any inquiry
respecting such authority.
18. Termination. This Agreement and the security interest
created hereby shall terminate when all the Obligations have been paid in
full and the Revolving Credit Commitments shall have been terminated, at
which time the Administrative Agent shall execute and deliver to the
Company, or such person or persons as the Company shall reasonably
designate, all Uniform Commercial Code termination statements and similar
documents prepared by the Company at its expense which the Company shall
reasonably request to evidence such termination; provided, that any
indemnity set forth herein shall survive any such termination. Upon any
sale or other disposition of any item of Collateral by the Company
expressly permitted by the Credit Agreement (other than the sales of
Inventory in the ordinary course of business), the Administrative Agent,
at the request and expense of the Company, shall release the Collateral
being sold and shall reassign and deliver such Collateral to the Company
(without recourse and without any representation or warranty), together
with appropriate instruments of reassignment and release; provided that
(i) at the time of such request and such release no Event of Default shall
have occurred and be continuing and (ii) the Company shall have delivered
to the Administrative Agent at least ten Business Days prior to the date
of the proposed release, a written request for release describing the item
of Collateral and the terms of the sale or other disposition in reasonable
detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Company stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents. Any execution and delivery of termination statements or
documents pursuant to this Section 18 shall be without recourse to or
representation or warranty by the Administrative Agent or any Lender.
IN WITNESS WHEREOF, the Company has caused this Security
Agreement to be duly executed and delivered as of the date first above
written.
18
ESSEX GROUP, INC.
By:____________________________
Name:
Title:
SCHEDULE I
to Company
Security Agreement
PATENTS AND TRADEMARKS
Patent Docket
[CAPTION]
Patent
Country Number Title Issue Date
------- ------- ----- ----------
US 4290929 Aqueous Solutions of 9/22/81
Polyesterimides and Methods of
Making the Same
US 4253570 Reinforced Spool for Storing and 3/3/81
Transporting Strand Material and a
Package Assembly Utilizing the Same
US 4190319 Fiber Option Ribbon and Cable Made 2/26/80
Tehrefrom
CAN 1116903 Fiber Option Ribbon and Cable Made 1/26/82
Therefrom
US 4196032 Splice for Optical Ribbon Having 4/1/80
Elongated Strain Relief Elements in
the Ribbon and Method of Splicing
the Same
CAN 1104395 Splice for Optical Ribbon Having 7/7/81
Elongated Strain Relief Elements in
the Ribbon and Method of Splicing
the Same
US 4253569 Reinforced Spol for Storing and 3/3/81
Transporting Strand Material and a
Package Assembly Utilizing the Same
US 4286010 Insulated Mica Paper and Tapes 8/25/81
Thereof
CAN 1157323 Insulated Mica Paper and Tapes 11/22/83
Thereof
US 4358202 Apparatus and Method for Monitoring 11/9/82
and Surface Character
US 4389510 Water Soluble Polymide Prepared 6/21/83
from 1,2,3,4 Butane Tetracarboxylic
Acid and Method of Preparation
2
Patent
Country Number Title Issue Date
------- ------- ----- ----------
CAN 1175598 Water Soluble Polymide Prepared 10/2/84
from 1,2,3,4 Butane Tetracarboxylic
Acid and Method of Preparation
US 4606870 Preparing Magnet Wire Having 8/19/86
Electron Beam Curable Wire Enamels
US 4447472 Magnet Wire Coating Method and 5/8/84
Article
US 4374221 High Solids Polyamide-Imide Magnet 2/15/83
Wire Enamel
CAN 1193044 High Solids Polyamide-Imide Magnet 9/3/85
Wire Enamel
US 4396145 Self-Locking Carton 8/2/83
US 4374892 Moisture Resistant Insulating Mica 2/22/83
Tape Comprising a Monoalkoxy
Titanate
CAN 1171349 Moisture Resistant Insulating Mica 7/24/84
Tape Comprising a Monoalkoxy
Titanate
US 4350738 Power Insertable Polyamide-Imide 9/21/82
Coated Magnet Wire
CAN 1192797 Power Insertable Polyamide-Imide 9/3/85
Coated Magnet Wire
US 4348460 Power Insertable Polyamide-Imide 9/7/82
Coated Magnet Wire
CAN 1179216 Power Insertable Polyamide-Imide 12/11/84
Coated Magnet Wire
US 4385437 Method of Power Inserting 5/31/83
Polyamide-Imide Coated Magnet Wire
US 4389587 Unitary Sleeving Insulation 6/21/83
US 4385436 Method of Power Inserting Nylon 5/31/83
Coated Magnet Wire
CAN 1209765 Dielectric Films from Water Soluble 8/19/86
Polyimides
3
Patent
Country Number Title Issue Date
------- ------- ----- ----------
US 4471161 Conductor Strand Formed of Solid 9/11/84
Wires and Method for Making the
Conductor Strand
US 4471920 Tapered Flange Wire Spool 9/18/84
US 4493462 Spool with Lifting Handles 1/15/85
US 4563095 Method and Apparatus for Monitoring 1/7/86
the Surface of Elongated Objects
US 4576207 Texturized Heat Shrinkable Tubing 3/18/86
Having Radial and Longitudinal
Shrinkage Memory
US 4661314 Method of Making Texturized Heat 4/28/87
Shrinkable Tubing
US 4485978 Method and Apparatus for Winding 12/4/84
Strand upon Spools Having Tapered
End Flanges
US 4521363 Extrusion of a Plastic Coating 6/4/85
about a Strand
US 4476279 High Solids Theic Polyester Enamels 10/9/84
US 4571450 Moisture Impervious Power Cable and 2/18/86
Condui-System
US 4704335 Highly Flexible Silicone Rubber 11/3/87
Coated Inorganic Yarn
US 4693936 Low Coefficient of Friction Magnet 9/15/87
Wire Enamels
US 4705657 Ethylene-Propylene Diene Terpolymer 11/10/87
Texturized Heat Shrinkable Tubing
US 4551398 Tetraalkyl Titanate Modified Nylon 11/5/85
Magnet Wire Insulation Coating
US 4599387 Tetraalkyl Titanate Modified Nylon 7/8/86
Magnet Wire Insulation Coating
US 4707209 Method of Making High Density 11/17/87
Moisture Resistant Mica Sheet
US 4601952 Method of Making High Density 7/22/86
Moisture Resistant Mica Sheet
4
Patent
Country Number Title Issue Date
------- ------- ----- ----------
US 4601931 High Density, Moisture Resistant 7/22/86
Mica Cylinders
US 4575016 Continuous Ribbon Feed Method and 3/11/86
System
US 4588344 Roll Transfer Robot 5/13/86
US 4555070 Method and Apparatus for Unwinding 11/26/85
and Splicing Successive Rolls
US 4586415 Assembly for Effecting Vertical and 5/6/86
Rotational Motion
US 4575017 ▇▇▇▇▇▇ Rab and Method of Use 3/11/86
US 4591084 Method and Apparatus for Feeding 5/27/86
and Accumulating Ribbon Material
US 4545323 Felt Applicator 10/8/85
US 4622241 Method and Apparatus for Accurately 11/11/86
Dispensing a Solution
US 4604300 Method for Applying High Solids 8/5/86
Enamels to Magnet Wire
US 4574604 Process and Apparatus for High 3/11/86
Speed Fabrication of Copper
US 4615195 Process and Apparatus for High 10/7/86
Speed Fabrication of Copper
US 4568607 Aromatic Titanate Modified Nylon 2/4/86
Magnet Wire Insulation
US 4588784 Aromatic Titanate Modified Nylon 5/13/86
Magnet Wire Insulation
US 4614670 Method for Insulating a Magnet Wire 9/30/86
with an Aromatic Titanate Modified
Nylon
US 4550055 Titanium Chelate Modified Nylon 10/29/85
Magnet Wire Insulation Coating
US 4563369 Titanium Chelate Modified Nylon 1/7/86
Magnet Wire Insulation Coating
US 4637852 Neoalkoxy Titanate in High Density 1/20/87
Mica Laminates
5
Patent
Country Number Title Issue Date
------- ------- ----- ----------
US 4603088 Neoalkoxy Titanate in High Density 7/29/86
Mica Laminates
US 4582198 Wire Shipping and Dispensing 4/15/86
Package
US 4704322 Resin Rich Mica Tape 11/3/87
US 4839444 High Solids Enamel 6/13/89
US D291172 Container Insert 8/4/87
US 4988980 Low Cost Verbal Annunciator 1/29/91
US 4599905 Method and Apparatus for 7/15/86
Determining the Elongation Property
of Copper Wire
US 4602751 Wire Spool with End Flange Having a 7/29/86
Wire Protection Groove
US 4624718 Polyester-Polyamide Tape Insulated 11/25/86
Magnet Wire and Method of Making
the Same
US 4601918 Apparatus and Method for Applying 7/22/86
High Solids Enamels to Wire
US 4629145 Control of Traversing Guide in 12/16/86
Strand Winding Apparatus
US 4926928 Protective Device for Restraining 5/22/90
Rod Produced in a Continuous
Casting and Rolling Process
US 4775726 Method for Equilibrating Polyamide 10/4/88
Magnet Wire Coatings and Enamel
Compositions
US 4808436 A Method for Equilibrating 2/28/89
Polyamide Magnet Wire Coatings and
Enamel Compositions
US 4913963 Magnet Wire with Equilibrating 4/3/90
Polyamide Insulation Coatings and
Enamel Compositions
US 4635046 Wire Tangle Sensor 1/6/87
US 4695830 Wire Runtogether Sensor 9/22/87
6
Patent
Country Number Title Issue Date
------- ------- ----- ----------
US 4740756 Continuity Test Method and 4/26/88
Apparatus
US 4700171 Ignition Wire 10/13/87
US 4775566 High Temperature Flexible Unitary 10/4/88
Sleeving Insulation
US 5032199 Method of Making a High Temperature 7/16/91
Flexible Unitary Sleeving
Insulation
US 4683162 Mica Product 7/28/87
US 783365 Mica Product 11/8/88
US 4752217 Wire Coating Oven Including Wire 6/21/88
Cooling Apparatus
US 4725010 Control Apparatus and Method 2/16/88
US RE33240 Control Apparatus and Method 4/19/88
US 4725458 Urethane Modified Nylon Magnet Wire 2/16/88
Enamel
US 4808477 Urethane Modified Nylon Magnet Wire 2/28/89
Enamel
US 4689601 Multi-Layer Ignition Wire 8/25/87
US 4704596 Extrusion Coated Ignition Wire 11/03/87
US 4876316 High Temparature Magnet Wire Bond 10/24/89
Coat Polyamide/Aldehyde/ Aromatic
Alocohol Reaction Product
US 4891243 Die Bar Carrier 1/2/90
US 4826544 Hydrogen Cleaning of Hot Copper Rod 5/2/89
US 4836872 Method of Manufacturing a Fiber 6/6/89
Reinforced Heat Shrinkable Tubing
Article
US 4915139 Heat Shrinkable Tubing Article 4/10/90
US 4869199 Manifold for Distributing Wire 9/26/89
Coating Enamel
7
Patent
Country Number Title Issue Date
------- ------- ----- ----------
US 4839205 Heated Supply Sheaves for Wire 6/13/89
Coating Apparatus
US 4844283 Closure Mechanism for Wire Coating 7/4/89
Oven
US 4839818 Magnet Wire Over Control Apparatus 6/13/89
US 4821880 Palletized Structure Containing 4/18/89
Spools
US 5045136 Heat Shrinkable Article 9/3/91
US 4851060 Multilayer Wrapped Insulated Magnet 7/25/89
Wire
US 5106686 Multilayer Wrapped Insulated Magnet 4/21/92
Wire
US 4966932 Ultra-High Solids Theic Polyester 10/30/90
Enamels
US 4830689 Bonded Metallic Cable Sheathing 5/16/89
with Edge Forming
US 5048572 Vibration Damping Heat Shrinkable 9/17/92
Tubing
US 4705957 Wire Surface Monitor 11/10/87
US 4611747 Method for Producing Continuous 9/16/86
Length High Solids Enamel Coated
Magnet Wire
US 5023558 Ignition Wire Core Conductive 6/11/91
Irregularity Detector
US 4938428 Wire Winding System with Mobile 7/3/90
Transfer Cart
US 4964363 System of Assembly and Filling 10/23/90
Large Cables in a Single Pass at a
Single Station
US 4923133 Dancer Assembly 5/8/90
US 5304740 Fusible Link Wire 4/19/94
/TABLE
8
Duration
US--17 Years (Subject to Maintenance Fees)
CAN--17 Years
9
TRADEMARKS AND TRADE NAMES
[CAPTION]
Trademark and/or
Country Trade Name Registration Expiration
------- ---------------- ------------ ----------
US ACRYFLEX 1,092,803 06/06/98
US ACRYLEX 656,059 12/24/97
US ALLEX 717,483 06/27/01
US ALPIC 861,614 12/10/08
US ASTRA 1,083,505 01/24/98
US ASTRAMELT 1,266,308 02/07/04
US ASTRATITE 1,057,610 02/01/97
US BIPIC 1,218,947 12/07/02
US BONDEX 687,491 11/03/99
US ▇▇▇▇▇▇▇▇ ELECTRO 1,781,418 07/13/03
INC. & Design
US CASPIC 1,189,207 02/09/02
US CL & Design 1,197,158 06/08/02
US CUPIC 861,615 12/10/08
Canada DIAMOND 192,723 07/13/03
US DIAMOND 676,255 03/31/99
US DIAMOND FIGURE Des 613,831 10/11/95
Argentina ESSEX 1,176,315 10/07/05
Brazil ESSEX 692,303 04/25/99
Canada ESSEX 193,620 08/31/03
China ESSEX 504,592 11/20/99
France ESSEX 1,331,108 11/15/95
Italy ESSEX 448,366 10/24/05
Italy ESSEX 356,324 03/23/98
Spain ESSEX 1,127,541 04/03/09
US ESSEX 961,503 06/19/03
US ESSEX 959,657 05/29/03
US ESSEX 954,253 03/06/03
US ESSEX 954,283 03/06/03
US ESSEX 1,411,176 09/30/06
US ESSEX 1,644,159 05/14/01
Mexico ESSEX 496,193 03/22/05
US ESSEX 618,128 12/27/95
US ESSEX 965,834 08/14/03
US ESSEX 536,430 01/16/01
US ESSEX 966,421 08/21/03
US ESSEX GROUP 1,313,285 01/08/05
US ESSEX GROUP 1,178,844 11/24/01
India ESSEX Application
Mexico ESSEX 496,194 03/22/05
US ESSEX QTY MASTERS 1,205,233 08/17/02
China ESSEX (Chinese) 504,591 11/20/99
US ExCel & xl Des 780,919 12/01/04
US ExCelene 1,032,113 02/03/96
Renewal filed
US FEMCO 1,584,450 02/27/00
US FLEXICONE 1,330,873 04/16/05
10
Trademark and/or
Country Trade Name Registration Expiration
------- ---------------- ------------ ----------
US GOPIC 969,536 10/02/03
US HANDIWIRE 1,342,096 06/18/05
US IF IT'S P IT'S RIGHT 71,533,826 11/21/00
US IF IT'S P IT'S RIGHT 1,652,273 07/30/01
US ISOMICA 575,202 06/02/03
US IWI 635,106 10/02/96
Renewal filed
US IWI Inv W/O Invest 658,007 02/04/98
US ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,827,220 03/22/04
US LF Logo 1,830,155 04/12/04
US MACALLEN & Design 833,230 08/08/07
US MAGNAPAK 628,592 06/12/06
US ▇▇▇▇▇▇▇ 861,613 12/10/08
US MICANITE and Drawing 22,623 03/07/03
US MR-200 1,234,416 04/12/03
US NYTHERM 702,858 08/16/00
US N-900 683,175 08/11/99
US PARAFLEX 586,117 02/23/04
US PARANITE 1,548,127 07/18/09
US PARANITE & Design 537,580 12/13/01
US PARANITE & Design 535,200 12/26/00
US PARASYN 529,926 08/29/00
US PAR-U-FLEX 674,901 03/03/99
US POLYBONDEX 1,172,079 10/06/01
US POLYFOAM 650,440 08/20/97
US REEL PAK 1,144,845 12/30/00
US RELI-A-BAND 1,286,015 07/17/04
US SAMICA 558,013 04/22/02
US SAMICAPOR 1,095,179 07/04/98
US SAMICATHERM 995,614 03/20/03
US SEALPIC 993,738 09/24/04
US SILVERFLEX 1,111,787 01/23/99
US SODERBOND 672,165 01/06/99
US SODEREX 672,138 01/06/99
US SODERON 672,164 01/06/99
US SOLIDEX 1,036,145 03/23/96
US SOLIDON 1,038,144 04/20/96
US SUFLEX 960,771 06/12/03
US SUFLEX Logo 1,308,019 12/04/04
Canada SX N.S. 2026 08/30/08
US SX 612,102 09/13/95
US SX 1,523,072 02/07/09
US SX & Design 1,525,063 02/21/09
US SX (▇▇▇▇▇▇'▇ ▇▇▇▇) 1,065,662 05/17/97
US TF 1,286,937 07/24/04
US THERMALEX 672,137 01/06/99
US THERMALEX 200 1,185,606 01/12/02
US TERHMALEX F 672,750 01/20/99
US THERMETEX GP200 844,472 02/20/08
US UTREX 1,326,775 03/26/05
US VINYLGLAS 965,445 08/07/03
Mexico SX 496,192 03/22/05
11
Trademark and/or
Country Trade Name Registration Expiration
------- ---------------- ------------ ----------
Mexico SX 496,195 03/22/05
India SX Application
US ULTRASHIELD Application
US VANGUARD 1,827,219 03/22/04
/TABLE
12
PENDING APPLICATIONS
Country Serial No. Filing Date
------- ---------- -----------
US 08/317506 10/03/94
US 08/261546 06/17/94
US 08/557513 11/14/95
SCHEDULE II
to Security
Agreement
Locations of Inventory and Equipment
ESSEX LOCATIONS
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇ ▇.
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ County
Location Code: 402 Location Code: 409, 492
West Pearl Street ▇▇▇▇▇▇ Road
Jonesboro, IN Vincennes, IN
Grant County ▇▇▇▇ County
Location Code: 165 Location Code: 401
▇▇▇▇▇▇ ▇▇▇▇ Main St./Bay Rd.
Newmarket, NH Newmarket, NH
Rockingham County Rockingham County
Location Code: 014 Location Code: 023
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ County
Location Code: 447 Location Code: 450
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇. ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Winnebago County
Location Code: 486 Location Code: 489
1904 Engineers Rd. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Plaquemines ▇▇▇▇▇▇ ▇▇▇▇ County
Location Code: 509 Location Code: 519
▇▇▇▇-▇ ▇▇▇▇▇ ▇▇▇. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Lubbock County Middlesex County
Location Code: 536 Location Code: 570
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. E. Union & ▇▇ ▇▇
#▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Tippecanoe County
Location Code: 568 Location Code: 113
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ County
Location Code: 436 Location Code: 105
▇▇▇ ▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Orange County
Location Code: 403, 046, 580
214 E. 24th St. 3959 ▇. ▇▇▇▇▇▇
2
▇▇▇▇▇▇, IN Chicago, IL
Grant County Cook County
Location Code: 051 Location Code: 506
Rt. 294 and Bear Creek Rd. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Dallas County
Location Code: 099 Location Code: 410, 534
3
▇▇▇ ▇. ▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Shelby County
Location Code: 123 Location Code: 413, 556
▇▇. ▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ County Multnomah County
Location Code: 128 Location County: 417, 566
University & East St. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇
Shawnee County Franklin County
Location Code: 423 Location Code: 414
▇▇▇ ▇. ▇▇▇▇ ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 406 Maricopa County
Location Code: 424
▇ ▇▇▇ ▇▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ Suite D
Location Code: ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
(▇▇▇▇▇▇▇▇▇) ▇▇▇▇▇
Cuyahoga County
Location Code: 508
▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
Denver, CO Hayward, CA 94545
Colorado County Location Code: 427, 581
Location Code: 411
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Location Code: 528
Location Code: 420, 518
▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇ - ▇▇▇ ▇▇▇., ▇▇.
Lithonia, GA Birmingham, AL
DeKalb County Jefferson County
Location Code: 122, 404, 569
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
Location Code: 416 Cook County
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Trevose) St. Louis County
Bucks County
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇
(Pittsburgh) ▇▇▇▇▇▇▇ County
Allegheny County
4
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇ County Davidson County
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Orange County
5
▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
Miami, FL Florence, AL
▇▇▇▇ County Lauderdale County
Location Code: 445
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Providence County
Location Code: 443
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Location Code: 446
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Lauderdale County
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
Sikeston, MO Charlotte, NC 23207
▇▇▇▇▇ County Mecklenburg County
Location Code: 442
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇.
Phoenix, AZ
Maricopa County
Location Code: 444
▇▇ ▇▇▇▇▇ ▇▇▇.
Pawtucket, RI
Providence County
▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇.
Glendale, AZ
Maricopa County
NON - ESSEX LOCATIONS:
▇▇▇▇▇▇ Dodge S&S Reel
▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
Location Code: N/A Location Code: N/A
Sherburne Electric ▇.▇. ▇▇▇▇▇ & Co., Inc.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
Location Code: N/A Location Code: 661
Southwire Company Electrical Insulation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
Location Code: N/A Belmont, CA
Location Code: 942
Precision Steel ▇▇▇▇▇▇ Sales Industries
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇ ▇▇.
6
Franklin Park, IL Wauconda, IL
Location Code: N/A Location Code: 930
▇▇▇▇▇▇▇ - ▇▇▇▇▇ Inc. MSC/Minnesota
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇. N.
Greensboro, NC Golden Valley, MN
Location Code: 660 Location Code: 931
7
▇▇▇▇▇ Sales Magnetek/PEI
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇
Location Code: 663 Location Code: 937
▇.▇. ▇▇▇▇▇▇, Inc. Magnetek-Century
2825 ▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇ ▇▇.
Philadelphia, PA McMinville, TN
Location Code: 955 Location Code: 938
▇.▇. ▇▇▇▇▇▇, Inc. Electrical Insulation
6675-A Corners Industrial Suppliers
Court ▇▇▇ ▇. ▇▇▇▇ ▇▇▇.
Norcross, GA N. Kansas City, MO
Location Code: 956 Location Code: 940
Electrical Insulation Tecumseh Products Company
Suppliers ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, P.O. Box 1208
Bldg. 4-B Paris, TN
New Brunswick, NJ Location Code: 980
Location Code: 917
Electrical Insulation S&W Wire Company
Suppliers, Inc. ▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇ Location Code: 597
Oklahoma City, OK
Location Code: 923
▇▇▇▇▇ Corp. Triangle Trading Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Ceramica Annex Station
Brownsville, TX Carolina, PR
Location Code: 925 Location Code: 664
Magnetek - Century Marathon Electric
Highway 22 North Highway 63 & ▇▇▇▇▇▇ ▇▇.
Lexington, TN West Plains, MO 65775
Location Code: 935 Location Code: 952
Saturn Services Corporation Camden Wire
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
Romeoville, IL Camden, NY
Location Code: 991 Location Code: N/A
Marathon Electric Owl Wire & Cable
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇. ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
Location Code: 953 Location Code: N/A
Marathon Electric Harby Associates, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 951 Location Code: 622
Brazil Bros. Mid-States
8
250 - 260 ▇▇▇▇▇▇▇ St. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. North
Metuchen, NJ Minneapolis, MN 55411
Location Code: N/A Location Code: 825
NASCO, Inc. Electrical Insulation
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇. Suppliers
Waterbury, CT ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
Location Code: ▇/▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 857
9
Omega Wire Electrical Insulation
▇▇ ▇▇ - ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ 155 Nowner Drive
Location Code: ▇/▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 861
Albion Wire Electrical Insulation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ Drive
Location Code: ▇/▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 866
▇▇▇▇▇▇ & Associates, Inc. Electrical Insulation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-1578 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Location Code: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 915
Electrical Insulation Electrical Insulation
Suppliers Suppliers
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 859 Location Code: 919
Electrical Insulation Suppliers Electrical Insulation
Route ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Location Code: ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 927
Electrical Insulation Suppliers Electrical Insulation
19769 ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ (▇▇▇▇▇▇▇) ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 862 Location Code: 936
Electrical Insulation Suppliers Electrical Insulation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Suppliers
Suite ▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 916 Location Code: 943
Electrical Insulation Suppliers Advanced Electrical Sales
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Location Code: 947
Location Code: 926
108 Elm Electrical Insulation
Tiffin, OH Suppliers
Seneca County 1347 S. 330 W.
Location Code: N/A Salt Lake City, UT 84115
Location Code: 969
Electrical Insulation Suppliers Electrical Insulation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Suppliers
10
Liverpool, NY 13088 3549 N.W. Yeon Avenue
Location Code: 928 Portland, OR 97210
Location Code: 975
Electrical Insulation Suppliers ▇.▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 941 Location Code: 994
11
Electrical Insulation Suppliers The ▇.▇. ▇▇▇▇▇▇ Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 945 Location Code: 674
▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Associates
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-4417
Location Code: 954 Location Code: 676
▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & Associates
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Location Code: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 679
Electrical Insulation Suppliers Electrical Materials, Inc.
Road 190 KM, 1.7 W. BO. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 978 Location Code: 681
Thea Enterprises, LLC Bell & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 673 Location Code: 648
Florida Electrical Sales Headline Sales, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
Tampa, FL 33607 Pico Riviera, CA 90660
Location Code: 675 Location Code: 719
▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company Cascade Western
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
Location Code: 678 Portland, OR 97242
Location Code: 724
▇▇▇▇▇ Company ▇▇▇ ▇▇▇▇▇▇▇▇ Agencies
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇-▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ V3M 6B7
Location Code: 680 Location Code: 635
Bell & ▇▇▇▇▇ Film X - ▇▇▇▇ Converting
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
Dallas, TX 75220 Decatur, GA
Location Code: 647 Location Code: N/A
Aurich Associates Electric Sales Unlimited
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇
Location Code: 718
H&J Electrical Sales Essex ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12
Location Code: 723 Location Code: 484
Intralec Electrical Essex ▇▇▇▇▇▇▇▇
Products, Ltd. ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
L5S 1P6 Location Code: 495
Location Code: 688
Electro-Tech Sales, Ltd. S-B Power Tool Company
Unit 10 ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
R3H OK2 Location Code: 968
Location Code: 637
Electric Sales Unlimited ▇▇▇▇▇▇ Electric
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇
▇▇▇▇▇ #▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ Location Code: 786
Essex ▇▇▇▇▇▇▇▇ Electrical Insulation
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Location Code: ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 855
Essex ▇▇▇▇▇▇▇▇ Electrical Insulation
647 West ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 546 Penn Street
Location Code: ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 858
Essex ▇▇▇▇▇▇▇▇ Electrical Insulation
Route 2 Suppliers
Box 1730 ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Suite D
Location Code: 497 Brownsville, TX 78521
Location Code: 913
▇▇▇▇▇▇▇ Controls Electrical Insulation
Turntable Road Suppliers
Plant #▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 996 Location Code: 946
▇▇▇▇▇▇ Electric
New York Street
Caraway, AR 72419
Location Code: 787
Electrical Insulation Suppliers
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 856
13
In-Sink-Erator Division
▇▇▇▇▇▇▇ Electric Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Location Code: 869
14
Electrical Insulation Suppliers
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location Code: 924
Athens Products
2009 Tellico Avenue
Athens, TN 37303
Location Code: 979
EXHIBIT E-2
FORM OF HOLDINGS SECURITY AGREEMENT
HOLDINGS SECURITY AGREEMENT, dated as of October 31, 1996,
made by BCP/ESSEX HOLDINGS INC., a Delaware corporation ("Holdings"), in
favor of THE CHASE MANHATTAN BANK, as Administrative Agent (in such
capacity, the "Administrative Agent") for the lenders (the "Lenders")
parties to the Credit Agreement, dated as of October 31, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement") among Essex Group, Inc. (the "Company"), Holdings, the Lenders
and the Administrative Agent.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans to the Company upon the terms and subject
to the conditions set forth therein;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to issue, or to participate in, Letters of Credit for the
account of the Company upon the terms and subject to the conditions set
forth therein;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to, and to issue or participate in
Letters of Credit for the account of, the Company under the Credit
Agreement that Holdings shall have executed and delivered this Security
Agreement to the Administrative Agent for the ratable benefit of the
Lenders; and
WHEREAS, the Company is a wholly owned direct subsidiary of
Holdings;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective Loans and
issue or participate in Letters of Credit under the Credit Agreement,
Holdings hereby agrees with the Administrative Agent, for the ratable
benefit of the Lenders, as follows:
1. Defined Terms. Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so used as
so defined; the following terms which are defined in the Uniform
Commercial Code in effect in the State of New York on the date hereof are
used herein as so defined: Accounts, Chattel Paper, Documents, Equipment,
Farm Products, General Intangibles, Instruments, Inventory and Proceeds;
and the following terms shall have the following meanings:
"Code" means the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Collateral" shall have the meaning assigned to it in
Section 2 of this Security Agreement; provided, that
Collateral shall not include any property which is subject to
a Lien permitted under Section 7.3 of the Credit Agreement
securing Indebtedness permitted under Section 7.2 of the
2
Credit Agreement to the extent that the grant of a security
interest hereunder would be prohibited by such Lien or by the
terms of such Indebtedness (but only so long as such
prohibition is in effect).
"Contracts" means all contracts, agreements, instruments
and indentures in any form, and portions thereof, to which
Holdings is a party or under which Holdings has any right,
title or interest or to which Holdings or any property of
Holdings is subject, as the same may from time to time be
amended, supplemented or otherwise modified, including,
without limitation, (a) all rights of Holdings to receive
moneys due and to become due to it thereunder or in connection
therewith, (b) all rights of Holdings to damages arising out
of, or for, breach or default in respect thereof and (c) all
rights of Holdings to perform and to exercise all remedies
thereunder, in each case to the extent the grant by Holdings
of a security interest pursuant to this Security Agreement in
its right, title and interest in such contract, agreement,
instrument or indenture is not prohibited by such contract,
agreement, instrument or indenture without the consent of any
other party thereto, or is permitted with consent if all
necessary consents to such grant of a security interest have
been obtained from the other parties thereto (it being
understood that the foregoing shall not be deemed to obligate
Holdings to obtain such consents); provided, that the
foregoing limitation shall not affect, limit, restrict or
impair the grant by Holdings of a security interest pursuant
to this Security Agreement in any Account or any money or
other amounts due or to become due under any such contract,
agreement, instrument or indenture.
"Intellectual Property" means (a) all intellectual and similar
property of Holdings of every kind and nature now owned or hereafter
acquired by Holdings, including, without limitation, inventions,
designs, patents, copyrights, licenses and license agreements
(whether Holdings is the licensor or the licensee under such
agreements), trademarks, trade names and other business names,
logos, trade secrets, confidential or proprietary technical and
business information, know-how, show-how or other data or
information, software and databases and all embodiments or fixations
thereof and related documentation, registrations, applications and
franchises, and all additions, improvements and accessions to, and
books and records describing or used in connection with, any of the
foregoing, including, without limitation, any thereof referred to in
Schedule I hereto and (b) all renewals thereof. Notwithstanding the
foregoing, licenses and license agreements as to which Holdings is
the licensee shall constitute "Intellectual Property" for the
purposes of this Agreement only to the extent the grant by Holdings
of a security interest pursuant to this Security Agreement in its
right, title and interest in such license or license agreement is
not prohibited by such license or license agreement without the
consent of any other party thereto, or is permitted with consent if
all necessary consents to such grant of a security interest have
been obtained from the other parties thereto (it being understood
that the foregoing shall not be deemed to obligate Holdings to
3
obtain such consents); provided, that the foregoing limitation shall
not affect, limit, restrict or impair the grant by Holdings of a
security interest pursuant to this Security Agreement in any Account
or any money or other amounts due or to become due under any such
license or license agreement.
"Obligations" means all obligations, liabilities and
indebtedness of Holdings under the guarantee contained in
Section 10 of the Credit Agreement.
"Security Agreement" means this Security Agreement, as
amended, supplemented or otherwise modified from time to time.
"Vehicles" means all cars, trucks, trailers,
construction and earth moving equipment and other vehicles
covered by a certificate of title law of any state and all
tires and other appurtenances to any of the foregoing.
2. Grant of Security Interest. As collateral security for
the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations,
Holdings hereby grants to the Administrative 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 Holdings or in which Holdings
now has or at any time in the future may acquire any right, title or
interest (collectively, the "Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Intellectual Property;
(ix) all Inventory; and
(x) to the extent not otherwise included,
all Proceeds and products of any and all of the foregoing.
3. Rights of Administrative Agent and Lenders; Limitations on
Administrative Agent's and ▇▇▇▇▇▇▇' Obligations.
(a) Holdings Remains Liable Under Accounts and Contracts.
Anything herein to the contrary notwithstanding, Holdings shall remain
liable under each of the Accounts and Contracts 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
4
to each such Account and in accordance with and pursuant to the terms and
provisions of each such Contract. Neither the Administrative Agent nor
any Lender shall have any obligation or liability under any Account (or
any agreement giving rise thereto) or under any Contract by reason of or
arising out of this Security Agreement or the receipt by the
Administrative Agent or any such Lender of any payment relating to such
Account or Contract pursuant hereto, nor shall the Administrative Agent or
any Lender be obligated in any manner to perform any of the obligations of
Holdings under or pursuant to any Account (or any agreement giving rise
thereto) or under or pursuant to any Contract, to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
under any Account (or any agreement giving rise thereto) or under any
Contract, 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.
(b) Notice to Account Debtors and Contracting Parties. Upon
the request of the Administrative Agent at any time after the occurrence
and during the continuance of an Event of Default, Holdings shall notify
account debtors on the Accounts and parties to the Contracts that the
Accounts and the Contracts have been assigned to the Administrative Agent
for the ratable benefit of the Lenders and that payments in respect
thereof shall be made directly to the Administrative Agent. Upon the
occurrence and during the continuance of an Event of Default, the
Administrative Agent may in its own name or in the name of others
communicate with account debtors on the Accounts and parties to the
Contracts to verify with them to its satisfaction the existence, amount
and terms of any Accounts or Contracts.
(c) Analysis of Accounts. The Administrative Agent shall
have the right to make test verifications of the Accounts in any manner
and through any medium that it reasonably considers advisable, and
Holdings shall furnish all such assistance and information as the
Administrative Agent may reasonably require in connection therewith. If
an Event of Default shall have occurred and be continuing, then upon the
Administrative Agent's request and at the expense of Holdings, Holdings
shall cause independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports
showing reconciliations, aging and test verifications of, and trial
balances for, the Accounts.
(d) Collections on Accounts. The Administrative Agent hereby
authorizes Holdings to collect the Accounts, provided, that the
Administrative Agent may curtail or terminate said authority at any time
upon the occurrence and during the continuance of an Event of Default. If
an Event of Default shall have occurred and be continuing, any payments of
Accounts, when collected by Holdings, shall be forthwith (and, in any
event, within two Business Days) deposited by Holdings in the exact form
received, duly endorsed by Holdings to the Administrative Agent if
required, in a special collateral account maintained by the Administrative
Agent, subject to withdrawal by the Administrative Agent for the account
of the Administrative Agent and the Lenders only, as hereinafter provided,
and, until so turned over, shall be held by Holdings in trust for the
Administrative Agent and the Lenders, segregated from other funds of
Holdings. Each deposit of any such Proceeds shall be accompanied by a
5
report identifying in reasonable detail the nature and source of the
payments included in the deposit. All Proceeds constituting collections
of Accounts while held by the Administrative Agent (or by Holdings in
trust for the Administrative Agent and the Lenders) shall continue to be
collateral security for all of the Obligations and shall not constitute
payment thereof until applied as hereinafter provided. At any time at the
Administrative Agent's election, the Administrative Agent shall apply all
or any part of the funds on deposit in said special collateral account on
account of the Obligations in such order as the Administrative Agent may
elect, and any part of such funds which the Administrative 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 Administrative
Agent to Holdings or to whomsoever may be lawfully entitled to receive the
same. At the Administrative Agent's reasonable request, Holdings shall
deliver to, or make available for review by, the Administrative Agent all
original and other documents evidencing, and relating to, the agreements
and transactions which gave rise to the Accounts, including, without
limitation, all original orders, invoices and shipping receipts.
(e) Tolled Inventory. If any third Person (a "Tolling
Party") delivers possession of, but not title to, any raw materials, work-
in-process or other goods ("Tolled Inventory") pursuant to a bailment
arrangement with Holdings under which such Tolled Inventory is to be
processed, improved or otherwise altered by Holdings, the Administrative
Agent agrees and acknowledges that any security interest in or lien upon
Inventory created hereby does not apply to any Tolled Inventory which is
owned by the Tolling Party (rather than owned by Holdings subject to a
retention of title by the Tolling Party which has the effect of creating a
security interest in favor of the Tolling Party which remains
unperfected). Notwithstanding anything in this Security Agreement to the
contrary, Holdings shall be entitled to follow its normal tolling
practices and may deliver Tolled Inventory to or for the account of any
Tolling Party free of the lien of this Security Agreement.
4. Representations and Warranties. Holdings hereby
represents and warrants that:
(a) Title; No Other Liens. Except for the Lien granted
to the Administrative Agent for the ratable benefit of the
Lenders pursuant to this Security Agreement and the other
Liens permitted to exist on the Collateral pursuant to the
Credit Agreement, Holdings owns each item of the Collateral
free and clear of any and all Liens or claims of others. No
security agreement, 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 that would serve to grant
the Person who filed such security agreement, financing
statement or other public notice a perfected security interest
in or lien on such Collateral, except such as may have been
filed in favor of the Administrative Agent, for the ratable
benefit of the Lenders, pursuant to this Security Agreement or
as may be permitted pursuant to the Credit Agreement.
(b) Perfected First Priority Liens. Upon filing of
financing statements in the relevant offices identified in
Schedule 4.20(b) to the Credit Agreement, the Liens granted
6
pursuant to this Security Agreement constitute perfected Liens
on the Collateral in favor of the Administrative Agent, for
the ratable benefit of the Lenders, which are prior to all
other Liens on the Collateral created by Holdings and in
existence on the date hereof (except other Liens expressly
permitted by the Credit Agreement) and which are enforceable
as such against all creditors of and purchasers from Holdings
and against any owner or purchaser of the real property where
any of the Equipment is located and any present or future
creditor obtaining a Lien on such real property, except to the
extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws generally
affecting creditors' rights and by general principles of
equity (regardless of whether enforcement is sought in equity
or at law).
(c) Accounts. The amount represented by Holdings to
the Lenders from time to time as owing by each account debtor
or by all account debtors in respect of the Accounts will at
such time be the correct amount actually owing by such account
debtor or debtors thereunder. No amount payable to Holdings
under or in connection with any Account is evidenced by any
Instrument or Chattel Paper which has not been delivered to
the Administrative Agent. The place where Holdings keeps its
records concerning the Accounts is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
(d) Inventory and Equipment. The Inventory and the
Equipment are kept at the locations listed on Schedule II
hereto or such other location specified pursuant to Section
5(n).
(e) Chief Executive Office. Holdings' chief executive
office and chief place of business is located at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other location
specified pursuant to Section 5(n).
(f) Farm Products; Vehicles. None of the Collateral
constitutes, or is the Proceeds of, Farm Products. No Vehicle
owned by Holdings has a book value in excess of $50,000 other
than Vehicles as to which Holdings has taken steps of the type
described in clause (i) and (ii) of Section 6.10(a) of the
Credit Agreement (to the extent, and only to the extent,
reasonably requested by the Administrative Agent).
(g) Intellectual Property. Set forth on Schedule I is
a complete and accurate list of all patents, trademarks, trade
names, service marks and copyrights, and all applications
therefor and licenses thereof, of Holdings, showing as of the
Effective Date the jurisdiction in which registered, the
registration number, the date of registration and the
expiration date. Holdings owns, or is licensed to use, all
trademarks, trade names, copyrights, technology, know-how and
processes necessary for the conduct of its business as
currently conducted except for those the failure to own or
7
license which could not reasonably be expected to materially
impair the value of the Collateral. No claim has been
asserted and is pending by any Person challenging or
questioning the use of any trademark, trade name, copyright,
technology, know-how or process necessary for the conduct of
its business as currently conducted, nor does Holdings know of
any valid basis for any such claim, the use of the same by
Holdings does not infringe on the rights of any Person and, to
the knowledge of Holdings, no Intellectual Property has been
infringed, misappropriated or diluted by any other Person,
except for such claims, infringements, misappropriations and
dilutions that, in the aggregate, could not reasonably be
expected to materially impair the value of the Collateral.
(h) Governmental Obligors. None of the obligors on any
Accounts, and none of the parties to any Contracts, is a
Governmental Authority.
5. Covenants. Holdings covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Security Agreement until the Obligations are paid in full, the Revolving
Credit Commitments are terminated and no Letters of Credit shall be
outstanding:
(a) Further Documentation; Pledge of Instruments and
Chattel Paper. At any time and from time to time, upon the
written request of the Administrative Agent, and at the sole
expense of Holdings, Holdings will promptly and duly execute
and deliver such further instruments and documents and take
such further action as the Administrative Agent may reasonably
request for the purpose of obtaining or preserving the full
benefits of this Security Agreement and of the rights and
powers herein granted, including, without limitation, the
filing of any financing or continuation statements under the
Uniform Commercial Code in effect in any jurisdiction with
respect to the Liens created hereby. Holdings also hereby
authorizes the Administrative Agent to file any such financing
or continuation statement without the signature of Holdings to
the extent permitted by applicable law. A carbon,
photographic or other reproduction of this Security Agreement
shall be sufficient as a financing statement for filing in any
jurisdiction. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any
Instrument or Chattel Paper, such Instrument or Chattel Paper
shall be immediately delivered to the Administrative Agent,
duly endorsed in a manner satisfactory to the Administrative
Agent, to be held as Collateral pursuant to this Security
Agreement.
(b) Indemnification. Holdings agrees to pay, and to
save the Administrative Agent and the Lenders harmless from,
any and all liabilities, costs and expenses (including,
without limitation, reasonable legal fees and expenses) (i)
with respect to, or resulting from any delay in paying, any
and all excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the
8
Collateral, (ii) with respect to, or resulting from, any delay
in complying with any Requirement of Law applicable to any of
the Collateral or (iii) in connection with any of the
transactions contemplated by this Security Agreement. In any
suit, proceeding or action brought by the Administrative Agent
in accordance with the terms hereof under any Account or
Contract for any sum owing thereunder, or to enforce any
provisions of any Account or Contract, Holdings will save,
indemnify and keep harmless the Administrative Agent and each
Lender from and against all expense, loss or damage suffered
by reason of any defense, setoff, counterclaim, recoupment or
reduction or liability whatsoever of the account debtor or
obligor thereunder, arising out of a breach by Holdings of any
obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of
such account debtor or obligor or its successors from
Holdings.
(c) Maintenance of Records. Holdings will keep and
maintain at its own cost and expense satisfactory and complete
records of the Collateral, including, without limitation, a
record of all payments received and all credits granted with
respect to the Accounts. Holdings will mark its books and
records pertaining to the Collateral to evidence this Security
Agreement and the security interests granted hereby. For the
Administrative Agent's and the Lenders' further security, the
Administrative Agent, for the ratable benefit of the Lenders,
shall have a security interest in all of Holdings' books and
records pertaining to the Collateral.
(d) Right of Inspection. The Administrative Agent shall at
any reasonable time or times during normal business hours have
access to all the books, correspondence and records of Holdings, and
the Administrative Agent and its representatives may examine the
same, take extracts therefrom and make photocopies thereof, and
Holdings agrees to render to the Administrative Agent, at Holdings'
cost and expense to the extent expressly provided in Section 11.5 of
the Credit Agreement, such clerical and other assistance as may be
reasonably requested with regard thereto. The Administrative Agent
and its representatives shall at any reasonable time or times during
normal business hours also have the right to enter into and upon any
premises where any of the Inventory or Equipment is located (or, in
the case of any such premises not owned or leased by Holdings, the
Company or any of its Subsidiaries, Holdings shall use its best
efforts to grant to the Administrative Agent such right) for the
purpose of inspecting the same, observing its use or otherwise
protecting the Administrative Agent's and the Lenders' interests
therein.
(e) Compliance with Laws, etc. Holdings will comply in all
material respects with all Requirements of Law applicable to the
Collateral or any part thereof or to the operation of Holdings'
business, except where failure to satisfy the foregoing requirement
could not reasonably be expected to have a material adverse effect
on the value of the Collateral taken as a whole or, with respect to
any material portion of the Collateral, have a material adverse
9
effect on the perfection or priority of the Liens contemplated
hereby relating to such Collateral; provided, however, that Holdings
may contest any Requirement of Law in any reasonable manner which
shall not, in the sole opinion of the Administrative Agent,
adversely affect the Administrative Agent's or the Lenders' rights
or the priority of their Liens on the Collateral.
(f) Limitation on Liens on Collateral. Holdings will not
create, incur or permit to exist, will defend the Collateral
against, and will take such other action as is necessary to remove,
any Lien or claim on or to the Collateral, other than the Liens
created hereby and other than as permitted pursuant to the Credit
Agreement, and will defend the right, title and interest of the
Administrative Agent and the Lenders in and to any of the Collateral
against the claims and demands of all Persons whomsoever.
(g) Limitations on Dispositions of Collateral. Holdings will
not sell, transfer, lease or otherwise dispose of any of the
Collateral, or attempt, offer or contract to do so except as
expressly permitted by the Credit Agreement.
(h) Limitations on Modifications, Waivers, Extensions of
Agreements Giving Rise to Accounts. Holdings will not (i) except in
the ordinary course of business amend, modify, terminate or waive
any provision of or any agreement giving rise to an Account in any
manner which could reasonably be expected to materially adversely
affect the value of the Collateral taken as a whole, (ii) fail to
exercise promptly and diligently each and every material right which
it may have under each agreement giving rise to an Account (other
than any right of termination), except in a manner consistent with
the ordinary and customary conduct of business as generally
conducted by Holdings over a period of time or (iii) fail to deliver
to the Administrative Agent a copy of each material demand, notice
or document received by it relating in any way to any material
agreement giving rise to an Account which affects the interests of
the Administrative Agent and the Lenders hereunder.
(i) Limitations on Discounts, Compromises, Extensions of
Accounts. Other than in the ordinary course of business as
generally conducted by Holdings over a period of time, Holdings will
not, without the prior written consent of the Administrative Agent,
grant any extension of the time of payment of any of the Accounts,
compromise, compound or settle the same for less than the full
amount thereof, release, wholly or partially, any Person liable for
the payment thereof, or allow any credit or discount whatsoever
thereon.
(j) Maintenance of Equipment. Holdings will maintain each
item of Equipment in good operating condition, ordinary wear and
tear and immaterial impairments of value and damage by the elements
excepted, and will provide all maintenance, service and repairs
necessary for such purpose.
(k) Maintenance of Insurance. Holdings will maintain, with
financially sound and reputable companies, insurance policies (i)
insuring the Inventory and Equipment against loss by fire,
10
explosion, theft and such other casualties as are usually insured
against by companies engaged in the same or similar business and
(ii) insuring Holdings and the Administrative Agent, for the benefit
of the Lenders, against liability for personal injury and property
damage relating to such Inventory and Equipment, such policies to be
in such form and amounts and having such coverage as may be
reasonably satisfactory to the Administrative Agent, such losses of
$1 million or more shall be payable to Holdings and the
Administrative Agent, for the benefit of the Lenders, as their
respective interests may appear. All such insurance shall (i) to
the extent requested by the Administrative Agent, provide for a 30-
day standard cancellation notice, (ii) name the Administrative
Agent, for the benefit of the Lenders, as an insured party and (iii)
be reasonably satisfactory in all other respects to the
Administrative Agent. If reasonably requested by the Administrative
Agent, Holdings shall deliver to the Administrative Agent and the
Lenders a report of a reputable insurance broker with respect to
such insurance, and such supplemental reports with respect thereto
as the Administrative Agent may from time to time reasonably
request.
(l) Further Identification of Collateral. Holdings will
furnish to the Administrative Agent and the Lenders from time to
time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral
as the Administrative Agent may reasonably request, all in
reasonable detail.
(m) Notices. Holdings will advise the Administrative Agent
and the Lenders promptly, in reasonable detail, at their respective
addresses set forth in the Credit Agreement, (i) of any Lien (other
than Liens created hereby or permitted under the Credit Agreement)
on, or claim asserted against, any of the Collateral and (ii) 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 taken as a whole or, with respect to any material portion
of the Collateral, have a material adverse effect on the perfection
or priority of the Liens contemplated hereby relating to such
Collateral.
(n) Changes in Locations, Name, etc. Holdings will not (i)
change the location of its chief executive office/chief place of
business from that specified in Section 4(e) hereof or remove its
books and records from the location specified in Section 4(c)
hereof, (ii) permit any of the Inventory or Equipment to be kept at
a location other than those listed on Schedule II hereto or (iii)
change its name, identity or corporate structure to such an extent
that any financing statement filed by the Administrative Agent in
connection with this Security Agreement would become seriously
misleading, unless (x) Holdings shall have given the Administrative
Agent at least 30 days' prior written notice thereof, (in the case
of clause (i) and (iii) above or at least one Business Day's prior
written notice thereof (in the case of clause (ii) above) and (y)
Holdings shall have taken, and shall continue to take, all steps
necessary to ensure that the Administrative Agent, for the benefit
of the Lenders, shall have, and shall continue to have, a fully
11
perfected first priority security interest in the Collateral
(subject to the Liens permitted by the Credit Agreement)
notwithstanding such actions.
(o) Intellectual Property. Holdings will preserve all of its
registered trademarks, trade names, service marks and other
Intellectual Property, the non-preservation of which would have a
reasonable likelihood of materially impairing the value of the
Collateral taken as a whole. Whenever Holdings, either by itself or
through any agent, employee, licensee or designee, shall file an
application for the registration of any patent or trademark with the
United States Patent and Trademark Office or any similar office or
agency in any other country or any political subdivision thereof,
Holdings shall report such filing to the Administrative Agent and
the Lenders within five Business Days after the last day of the
fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, Holdings shall execute and deliver any and all
agreements, instruments, documents, and papers as the Administrative
Agent may reasonably request to evidence the Administrative Agent's
and the Lenders' security interest in any patent or trademark and
the goodwill and General Intangibles of Holdings relating thereto or
represented thereby, and Holdings hereby constitutes the
Administrative Agent its attorney-in-fact to execute and file all
such writings for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed; such power being coupled with
an interest is irrevocable until the Obligations are paid in full
and the Revolving Credit Commitments are terminated. In the event
that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, in any material respect
Holdings shall promptly notify the Administrative Agent after it
learns thereof.
6. Administrative Agent's Appointment as Attorney-in-Fact.
(a) Powers. Holdings hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of Holdings
and in the name of Holdings or in its own name, from time to time in the
Administrative Agent's discretion, for the purpose of carrying out the
terms of this Security 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 Security
Agreement, and, without limiting the generality of the foregoing, Holdings
hereby gives the Administrative Agent the power and right, on behalf of
Holdings, without notice to or assent by Holdings, to do the following:
(i) at time when any Event of Default shall have
occurred and is continuing, in the name of Holdings or its own
name, or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Account,
Instrument, General Intangible or Contract or with respect to
any other Collateral and to file any claim or to take any
other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for
12
the purpose of collecting any and all such moneys due under
any Account, Instrument, General Intangible or Contract or
with respect to any other Collateral whenever payable;
(ii) in each case to the extent not paid, discharged
or effected by Holdings as required by this Security Agreement
or the Credit Agreement, to pay or discharge taxes and Liens
levied or placed on or threatened against the Collateral, to
effect any repairs or any insurance called for by the terms of
this Security Agreement and to pay all or any part of the
premiums therefor and the costs thereof; and
(iii) upon the occurrence and during the continuance of
any Event of Default, (A) to direct any party liable for any
payment under any of the Collateral to make payment of any and
all moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall
direct; (B) to ask or demand for, collect, receive payment of
and receipt for, any and all moneys, claims and other amounts
due or to become due at any time in respect of or arising out
of any Collateral; (C) to sign and endorse 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; (D) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court
of competent jurisdiction to collect the Collateral or any
thereof and to enforce any other right in respect of any
Collateral; (E) to defend any suit, action or proceeding
brought against Holdings with respect to any Collateral; (F)
to settle, compromise or adjust any suit, action or proceeding
described in clause (E) above and, in connection therewith, to
give such discharges or releases as the Administrative Agent
may deem appropriate; (G) to assign any Intellectual Property
(along with the goodwill of the business to which any such
Intellectual Property pertains), throughout the world for such
term or terms, on such conditions, and in such manner, as the
Administrative Agent shall in its sole discretion determine;
and (H) generally, to sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all
purposes, and to do, at the Administrative Agent's option and
Holdings' expense, at any time, or from time to time, all acts
and things which the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the
Administrative Agent's and the Lenders' Liens thereon and to
effect the intent of this Security Agreement, all as fully and
effectively as Holdings might do.
Holdings hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable.
(b) Other Powers. Holdings also authorizes the
Administrative Agent, at any time and from time to time, to execute, in
13
connection with any sale provided for in Section 9 hereof, any
endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.
(c) No Duty on Administrative Agent or Lenders' Part. The
powers conferred on the Administrative Agent and the Lenders hereunder are
solely to protect the Administrative Agent's and the Lenders' interests in
the Collateral and shall not impose any duty upon the Administrative Agent
or any Lender to exercise any such powers. Except for the duty of the
Administrative Agent described in Section 10 hereof, and the accounting by
the Administrative Agent for moneys actually received by it hereunder,
neither the Administrative Agent nor any Lender shall have any duties
hereunder as to the Collateral (including, without limitation, as to
ascertaining any matters or taking any action with respect to any
Collateral or as to taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral). The
Administrative Agent and the Lenders shall be accountable only for amounts
that they actually receive as a result of the exercise of the powers
conferred on the Administrative Agent and the Lenders hereunder, and
neither they nor any of their officers, directors, employees or agents
shall be responsible to Holdings for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.
7. Performance by Administrative Agent of Holdings'
Obligations. If Holdings fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as provided for
by the terms of this Security Agreement, shall itself perform or comply,
or otherwise cause performance or compliance, with such agreement, the
expenses of the Administrative Agent incurred in connection with such
performance or compliance, together with interest thereon at a rate per
annum equal to the Alternate Base Rate plus the Applicable Margin plus 2%,
shall be payable by Holdings to the Administrative Agent on demand and
shall constitute Obligations secured hereby. The Administrative Agent
agrees to notify Holdings promptly after incurring any expenses pursuant
to this Section 7, provided that the failure of the Administrative Agent
to so notify Holdings shall in no way impair the rights of the
Administrative Agent under this Section 7.
8. Proceeds. In addition to the rights of the Administrative
Agent and the Lenders specified in Section 3(d) hereof with respect to
payments of Accounts, it is agreed that if an Event of Default shall occur
and be continuing (a) the Administrative Agent may require, by notice to
Holdings, all Proceeds received by Holdings consisting of cash, checks and
other near-cash items to be held by Holdings in trust for the
Administrative Agent and the Lenders, segregated from other funds of
Holdings, and shall, forthwith upon receipt by Holdings, be turned over to
the Administrative Agent in the exact form received by Holdings (duly
endorsed by Holdings to the Administrative Agent, if required), and (b)
any and all such Proceeds received by the Administrative Agent (whether
from Holdings or otherwise) may, in the sole discretion of the
Administrative Agent, be held by the Administrative Agent for the ratable
benefit of the Lenders as collateral security for, and/or then or at any
time thereafter may be applied by the Administrative Agent against, the
Obligations (whether matured or unmatured), such application to be in such
order as the Administrative Agent shall elect. Any balance of such
Proceeds remaining after the Obligations shall have been paid in full, the
14
Revolving Credit Commitments shall have been terminated and no Letters of
Credit shall be outstanding shall be paid over to Holdings or to
whomsoever may be lawfully entitled to receive the same.
9. Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted to them in
this Security Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a
secured party under the Code. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by law referred to below) to or upon Holdings
or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral,
or any part thereof, and/or may forthwith sell, lease, assign, give option
or options to purchase, or otherwise dispose of and deliver the Collateral
or any part thereof (or contract to do any of the foregoing), in one or
more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Administrative Agent or any Lender or elsewhere
upon such terms and conditions as it may deem advisable and at such prices
as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any 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 Holdings, which right or equity is hereby waived
and released. Holdings further agrees, at the Administrative Agent's
request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall
reasonably select, whether at Holdings' premises or elsewhere. The
Administrative Agent shall apply the proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental
to the care or safekeeping of any of the Collateral or in any way relating
to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of the
Obligations, in such order as the Administrative Agent may elect, and only
after such application and after the payment by the Administrative Agent
of any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the Code, need the Administrative Agent
account for the surplus, if any, to Holdings. To the extent permitted by
applicable law, Holdings waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition. Holdings shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Obligations and the fees and
disbursements of any attorneys employed by the Administrative Agent or any
Lender to collect such deficiency. Holdings further waives and agrees not
to assert any rights or privileges which it may acquire under Section 9-
112 of the Code.
15
10. Limitation on Duties Regarding Preservation of
Collateral. The Administrative Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal
with it in the same manner as the Administrative Agent deals with similar
property for its own account. Neither the Administrative Agent, any
Lender, nor any of their respective directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon all
or any part 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 Holdings or otherwise.
11. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable
and powers coupled with an interest.
12. Severability. Any provision of this Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
13. Paragraph Headings. The paragraph headings used in this
Security Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.
14. No Waiver; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 15 hereof), 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 or in any breach of any
of the terms and conditions hereof. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. A waiver by the Administrative Agent
or any Lender of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Administrative
Agent or such Lender would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any rights or remedies
provided by law.
15. Waivers and Amendments; Successors and Assigns; Governing
Law. None of the terms or provisions of this Security Agreement may be
waived, amended, supplemented or otherwise modified except in accordance
with Section 11.1 of the Credit Agreement. This Security Agreement shall
be binding upon the successors and assigns of Holdings and shall inure to
the benefit of the Administrative Agent and the Lenders and their
respective successors and assigns. This Security Agreement shall be
governed by, and construed and interpreted in accordance with, the laws of
the State of New York.
16
16. Notices. All notices, requests and demands hereunder
shall be given in accordance with Section 11.2 of the Credit Agreement.
17. Authority of Administrative Agent. Holdings acknowledges
that the rights and responsibilities of the Administrative Agent under
this Security Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Security Agreement
shall, as between the Administrative Agent and the Lenders, be governed by
the Credit Agreement and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Administrative
Agent and Holdings, the Administrative Agent shall be conclusively
presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and Holdings shall not be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
18. Termination. This Security Agreement and the security
interest created hereby shall terminate when all the Obligations have been
paid in full and the Revolving Credit Commitments shall have been
terminated at which time the Administrative Agent shall execute and
deliver to Holdings, or such person or persons as Holdings shall
reasonably designate, all Uniform Commercial Code termination statements
and similar documents prepared by Holdings at its expense which Holdings
shall reasonably request to evidence such termination; provided, that
17
any indemnity set forth herein shall survive any such termination. Any
execution and delivery of termination statements or documents pursuant to
this Section 18 shall be without recourse to or representation or warranty
by the Administrative Agent or any Lender.
IN WITNESS WHEREOF, Holdings has caused this Security
Agreement to be duly executed and delivered as of the date first above
written.
BCP/ESSEX HOLDINGS INC.
By_____________________________
Name:
Title:
SCHEDULE I
to Holdings
Security
Agreement
INTELLECTUAL PROPERTY
None
19
SCHEDULE II
to Holdings
Security
Agreement
LOCATION OF INVENTORY AND EQUIPMENT
None
EXHIBIT E-3
FORM OF THE SUBSIDIARY SECURITY AGREEMENT
SUBSIDIARY SECURITY AGREEMENT, dated as of October 31, 1996,
made by each of the parties signatories hereto (each, a "Subsidiary";
collectively, the "Subsidiaries"), in favor of THE CHASE MANHATTAN BANK,
as Administrative Agent (in such capacity, the "Administrative Agent") for
the lenders (the "Lenders") parties to the Credit Agreement, dated as of
October 31, 1996 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement") among Essex Group Inc. (the "Company"),
BCP/Essex Holdings Inc., the Lenders and the Administrative Agent.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans to the Company upon the terms and subject
to the conditions set forth therein;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to issue, or to participate in, Letters of Credit for the
account of the Company upon the terms and subject to the conditions set
forth therein;
WHEREAS, the Subsidiaries are parties to the Subsidiary
Guarantee, dated as of April __, 1995 (as the same may be from time to
time amended, supplemented or modified, the "Subsidiary Guarantee"); and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to, and to issue or participate in
Letters of Credit for the account of, the Company under the Credit
Agreement that each Subsidiary shall have executed and delivered this
Security Agreement to the Administrative Agent for the ratable benefit of
the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective Loans and
issue or participate in Letters of Credit under the Credit Agreement, each
Subsidiary hereby agrees with the Administrative Agent, for the ratable
benefit of the Lenders, as follows:
1. Defined Terms. Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so used as
so defined; the following terms which are defined in the Uniform
Commercial Code in effect in the State of New York on the date hereof are
used herein as so defined: Accounts, Chattel Paper, Documents, Equipment,
Farm Products, General Intangibles, Instruments, Inventory and Proceeds;
and the following terms shall have the following meanings:
"Code" means the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Collateral" shall have the meaning assigned to it in
Section 2 of this Security Agreement; with respect to the
2
representations, warranties and covenants made by each
Subsidiary in Paragraphs 4 and 5 hereof, each reference to
"Collateral" shall be deemed to refer to the Collateral in
which such Subsidiary has granted or hereby grants or purports
to grant a security interest under this Security Agreement,
provided, that Collateral shall not include any property which
is subject to a Lien permitted under Section 7.3 of the Credit
Agreement securing Indebtedness permitted under Section 7.2 of
the Credit Agreement to the extent that the grant of a
security interest hereunder would be prohibited by such Lien
or by the terms of such Indebtedness (but only so long as such
prohibition is in effect).
"Contracts" means, with respect to any Subsidiary, all
contracts, agreements, instruments and indentures in any form,
and portions thereof, to which such Subsidiary is a party or
under which such Subsidiary has any right, title or interest
or to which such Subsidiary or any property of such Subsidiary
is subject, as the same may from time to time be amended,
supplemented or otherwise modified, including, without
limitation, (a) all rights of such Subsidiary to receive
moneys due and to become due to it thereunder or in connection
therewith, (b) all rights of such Subsidiary to damages
arising out of, or for, breach or default in respect thereof
and (c) all rights of such Subsidiary to perform and to
exercise all remedies thereunder, in each case to the extent
the grant by such Subsidiary of a security interest pursuant
to this Security Agreement in its right, title and interest in
such contract, agreement, instrument or indenture is not
prohibited by such contract, agreement, instrument or
indenture without the consent of any other party thereto, or
is permitted with consent if all necessary consents to such
grant of a security interest have been obtained from the other
parties thereto (it being understood that the foregoing shall
not be deemed to obligate any Subsidiary to obtain such
consents); provided, that the foregoing limitation shall not
affect, limit, restrict or impair the grant by such Subsidiary
of a security interest pursuant to this Security Agreement in
any Account or any money or other amounts due or to become due
under any such contract, agreement, instrument or indenture.
"Intellectual Property" means, with respect to any Subsidiary,
(a) all intellectual and similar property of such Subsidiary of
every kind and nature now owned or hereafter acquired by such
Subsidiary, including, without limitation, inventions, designs,
patents, copyrights, licenses and license agreements (whether such
Subsidiary is the licensor or the licensee under such agreements),
trademarks, trade names and other business names, logos, trade
secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information,
software and databases and all embodiments or fixations thereof and
related documentation, registrations, applications and franchises,
and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing,
including, without limitation, any thereof referred to in Schedule I
hereto and (b) all renewals thereof. Notwithstanding the foregoing,
3
licenses and license agreements as to which any Subsidiary is the
licensee shall constitute "Intellectual Property" for the purposes
of this Agreement only to the extent the grant by any Subsidiary of
a security interest pursuant to this Security Agreement in its
right, title and interest in such license or license agreement is
not prohibited by such license or license agreement without the
consent of any other party thereto, or is permitted with consent if
all necessary consents to such grant of a security interest have
been obtained from the other parties thereto (it being understood
that the foregoing shall not be deemed to obligate any Subsidiary to
obtain such consents); provided, that the foregoing limitation shall
not affect, limit, restrict or impair the grant by any Subsidiary of
a security interest pursuant to this Security Agreement in any
Account or any money or other amounts due or to become due under any
such license or license agreement.
"Obligations" means, with respect to any Subsidiary, all
obligations, liabilities and indebtedness of such Subsidiary
under the Subsidiary Guarantee.
"Security Agreement" means this Security Agreement, as
amended, supplemented or otherwise modified from time to time.
"Vehicles" means all cars, trucks, trailers,
construction and earth moving equipment and other vehicles
covered by a certificate of title law of any state and all
tires and other appurtenances to any of the foregoing.
2. Grant of Security Interest. As collateral security for
the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations, each
Subsidiary hereby grants to the Administrative Agent for the ratable
benefit of the Lenders a security interest in all of the following
property now owned or at any time hereafter acquired by such Subsidiary or
in which such Subsidiary now has or at any time in the future may acquire
any right, title or interest (collectively, the "Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Intellectual Property;
(ix) all Inventory; and
4
(x) to the extent not otherwise included, all
Proceeds and products of any and all of the foregoing.
3. Rights of Administrative Agent and Lenders; Limitations
on Administrative Agent's and Lenders' Obligations; Limitation on
Administrative Agent's and Lenders' Interest in Tolled Inventory.
(a) Subsidiary Remains Liable under Accounts and Contracts.
Anything herein to the contrary notwithstanding, each Subsidiary shall
remain liable under each of the Accounts and Contracts to observe and
perform all the conditions and obligations to be observed and performed by
it thereunder, all in accordance with the terms of any agreement giving
rise to each such Account and in accordance with and pursuant to the terms
and provisions of each such Contract. Neither the Administrative Agent
nor any Lender shall have any obligation or liability under any Account
(or any agreement giving rise thereto) or under any Contract by reason of
or arising out of this Security Agreement or the receipt by the
Administrative Agent or any such Lender of any payment relating to such
Account or Contract pursuant hereto, nor shall the Administrative Agent or
any Lender be obligated in any manner to perform any of the obligations of
any Subsidiary under or pursuant to any Account (or any agreement giving
rise thereto) or under or pursuant to any Contract, to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
under any Account (or any agreement giving rise thereto) or under any
Contract, 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.
(b) Notice to Account Debtors and Contracting Parties. Upon
the request of the Administrative Agent at any time after the occurrence
and during the continuance of an Event of Default, the relevant Subsidiary
shall notify account debtors on the Accounts and parties to the Contracts
that the Accounts and the Contracts have been assigned to the
Administrative Agent for the ratable benefit of the Lenders and that
payments in respect thereof shall be made directly to the Administrative
Agent. Upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent may in its own name or in the name of
others communicate with account debtors on the Accounts and parties to the
Contracts to verify with them to its satisfaction the existence, amount
and terms of any Accounts or Contracts.
(c) Analysis of Accounts. The Administrative Agent shall
have the right to make test verifications of the Accounts in any manner
and through any medium that it reasonably considers advisable, and each
Subsidiary shall furnish all such assistance and information as the
Administrative Agent may reasonably require in connection therewith. If
an Event of Default shall have occurred and be continuing, then upon the
Administrative Agent's request and at the expense of such Subsidiary, each
Subsidiary shall cause independent public accountants or others
satisfactory to the Administrative Agent to furnish to the Administrative
Agent reports showing reconciliations, aging and test verifications of,
and trial balances for, the Accounts.
(d) Collections on Accounts. The Administrative Agent hereby
authorizes each Subsidiary to collect the Accounts, provided, that subject
5
to the Administrative Agent's direction and control, and the
Administrative Agent may curtail or terminate said authority at any time
upon the occurrence and during the continuance of an Event of Default. If
an Event of Default shall have occurred and be continuing, any payments of
Accounts, when collected by such Subsidiary, shall be forthwith (and, in
any event, within two Business Days) deposited by such Subsidiary in the
exact form received, duly endorsed by such Subsidiary to the
Administrative Agent if required, in a special collateral account
maintained by the Administrative Agent, subject to withdrawal by the
Administrative Agent for the account of the Administrative Agent and the
Lenders only, as hereinafter provided, and, until so turned over, shall be
held by such Subsidiary in trust for the Administrative Agent and the
Lenders, segregated from other funds of such Subsidiary. Each deposit of
any such Proceeds shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the
deposit. All Proceeds constituting collections of Accounts while held by
the Administrative Agent (or by any Subsidiary in trust for the
Administrative Agent and the Lenders) shall continue to be collateral
security for all of the Obligations and shall not constitute payment
thereof until applied as hereinafter provided. At any time at the
Administrative Agent's election, the Administrative Agent shall apply all
or any part of the funds on deposit in said special collateral account on
account of the Obligations in such order as the Administrative Agent may
elect, and any part of such funds which the Administrative 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 Administrative
Agent to such Subsidiary or to whomsoever may be lawfully entitled to
receive the same. At the Administrative Agent's reasonable request, each
Subsidiary shall deliver to, or make available for review by, the
Administrative Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the
Accounts, including, without limitation, all original orders, invoices and
shipping receipts.
(e) Tolled Inventory. If any third Person (a "Tolling
Party") delivers possession of, but not title to, any raw materials, work-
in-process or other goods ("Tolled Inventory") pursuant to a bailment
arrangement with any Subsidiary under which such Tolled Inventory is to be
processed, improved or otherwise altered by such Subsidiary, the
Administrative Agent agrees and acknowledges that any security interest in
or lien upon Inventory created hereby does not apply to any Tolled
Inventory which is owned by the Tolling Party (rather than owned by such
Subsidiary subject to a retention of title by the Tolling Party which has
the effect of creating a security interest in favor of the Tolling Party
which remains unperfected). Notwithstanding anything in this Security
Agreement to the contrary, such Subsidiary shall be entitled to follow its
normal tolling practices and may deliver Tolled Inventory to or for the
account of any Tolling Party free of the lien of this Security Agreement.
4. Representations and Warranties . Each Subsidiary hereby
represents and warrants that:
(a) Title; No Other Liens. Except for the Lien granted to
the Administrative Agent for the ratable benefit of the Lenders
pursuant to this Security Agreement and the other Liens permitted to
exist on the Collateral pursuant to the Credit Agreement, such
6
Subsidiary owns each item of the Collateral free and clear of any
and all Liens or claims of others. No security agreement, 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 that
would serve to grant the Person who filed such security agreement,
financing statement or other public notice a perfected security
interest in or lien on such Collateral, except such as may have been
filed in favor of the Administrative Agent, for the ratable benefit
of the Lenders, pursuant to this Security Agreement or as may be
permitted pursuant to the Credit Agreement.
(b) Perfected First Priority Liens. Upon filing of financing
statements in the relevant offices identified in Schedule 4.20(b) to
the Credit Agreement, the Liens granted pursuant to this Security
Agreement constitute perfected Liens on the Collateral in favor of
the Administrative Agent, for the ratable benefit of the Lenders,
which are prior to all other Liens on the Collateral created by such
Subsidiary and in existence on the date hereof (except other Liens
expressly permitted by the Credit Agreement) and which are
enforceable as such against all creditors of and purchasers from
such Subsidiary and against any owner or purchaser of the real
property where any of the Equipment is located and any present or
future creditor obtaining a Lien on such real property, except to
the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws generally
affecting creditors' rights and by general principles of equity
(regardless of whether enforcement is sought in equity or at law).
(c) Accounts. The amount represented by such Subsidiary or
the Company to the Lenders from time to time as owing by each
account debtor or by all account debtors in respect of the Accounts
will at such time be the correct amount actually owing by such
account debtor or debtors thereunder. Except as otherwise provided
in Section 5(a) hereof, no amount payable to such Subsidiary under
or in connection with any Account is evidenced by any Instrument or
Chattel Paper which has not been delivered to the Administrative
Agent. The place where such Subsidiary keeps its records concerning
the Accounts is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇.
(d) Inventory and Equipment. The Inventory and the Equipment
are kept at the locations listed on Schedule II hereto or such other
location specified pursuant to Section 5(n).
(e) Chief Executive Office. Such Subsidiary's chief
executive office and chief place of business is located at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other location specified
pursuant to Section 5(n).
(f) Farm Products; Vehicles. None of the Collateral
constitutes, or is the Proceeds of, Farm Products. No Vehicle owned
by such Subsidiary has a book value in excess of $50,000, other than
Vehicles as to which such Subsidiary has taken steps of the type
described in clauses (i) and (ii) of Section 6.10(a) of the Credit
7
Agreement (to the extent, and only to the extent, reasonably
requested by the Administrative Agent).
(g) Intellectual Property. Set forth on Schedule I is
a complete and accurate list of all patents, trademarks, trade
names, service marks and copyrights, and all applications
therefor and licenses thereof, of such Subsidiary showing as
of the Effective Date the jurisdiction in which registered,
the registration number, the date of registration and the
expiration date. Such Subsidiary owns, or is licensed to use,
all trademarks, trade names, copyrights, technology, know-how
and processes necessary for the conduct of its business as
currently conducted except for those the failure to own or
license which could not reasonably be expected to materially
impair the value of the Collateral. No claim has been
asserted and is pending by any Person challenging or
questioning the use of any trademark, trade name, copyright,
technology, know-how or process necessary for the conduct of
its business as currently conducted, nor does such Subsidiary
know of any valid basis for any such claim, the use of the
same by such Subsidiary does not infringe on the rights of any
Person and, to the knowledge of such Subsidiary, no
Intellectual Property has been infringed, misappropriated or
diluted by any other Person, except for such claims,
infringements, misappropriations and dilutions that, in the
aggregate, could not reasonably be expected to materially
impair the value of the Collateral.
5. Covenants. Each Subsidiary covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Security Agreement until the Obligations are paid in full, the Revolving
Credit Commitments are terminated, and no Letter of Credit shall be
outstanding:
(a) Further Documentation; Pledge of Instruments and Chattel
Paper. At any time and from time to time, upon the written request
of the Administrative Agent, and at the sole expense of such
Subsidiary, such Subsidiary will promptly and duly execute and
deliver such further instruments and documents and take such further
action as the Administrative Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this
Security Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code in effect
in any jurisdiction with respect to the Liens created hereby. Such
Subsidiary also hereby authorizes the Administrative Agent to file
any such financing or continuation statement without the signature
of such Subsidiary to the extent permitted by applicable law. A
carbon, photographic or other reproduction of this Security
Agreement shall be sufficient as a financing statement for filing in
any jurisdiction. If any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any Instrument
or Chattel Paper having a principal amount in excess of $25,000,
such Instrument or Chattel Paper shall be immediately delivered to
the Administrative Agent, duly endorsed in a manner satisfactory to
the Administrative Agent, to be held as Collateral pursuant to this
8
Security Agreement; provided, that in no event shall the aggregate
principal amount of Instruments and Chattel Paper evidencing amounts
payable under or in connection with any Collateral (as such terms
are defined in the Company Security Agreement or the Subsidiary
Security Agreement, as the case may be) which have not been
delivered to the Administrative Agent pursuant to such Security
Agreements exceed $100,000 at any one time outstanding.
(b) Indemnification. Such Subsidiary agrees to pay, and to
save the Administrative Agent and the Lenders harmless from, any and
all liabilities, costs and expenses (including, without limitation,
reasonable legal fees and expenses) (i) with respect to, or
resulting from any delay in paying, any and all excise, sales or
other taxes which may be payable or determined to be payable with
respect to any of the Collateral, (ii) with respect to, or resulting
from, any delay in complying with any Requirement of Law applicable
to any of the Collateral or (iii) in connection with any of the
transactions contemplated by this Security Agreement; provided, that
in the case of this clause (iii), such Subsidiary shall not be
liable for the payment of any portion of such liabilities, costs or
expenses to the extent that such portion of such liabilities, costs
or expenses are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted primarily from the
gross negligence or wilful misconduct of the Administrative Agent.
In any suit, proceeding or action brought by the Administrative
Agent in accordance with the terms hereof under any Account or
Contract for any sum owing thereunder, or to enforce any provisions
of any Account or Contract, such Subsidiary will save, indemnify and
keep harmless the Administrative Agent and each Lender from and
against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction or liability
whatsoever of the account debtor or obligor thereunder, arising out
of a breach by such Subsidiary of any obligation thereunder or
arising out of any other agreement, indebtedness or liability at any
time owing to or in favor of such account debtor or obligor or its
successors from such Subsidiary.
(c) Maintenance of Records. Such Subsidiary will keep and
maintain at its own cost and expense satisfactory and complete
records of the Collateral, including, without limitation, a record
of all payments received and all credits granted with respect to the
Accounts. Such Subsidiary will mark its books and records
pertaining to the Collateral to evidence this Security Agreement and
the security interests granted hereby. For the Administrative
Agent's and the Lenders' further security, the Administrative Agent,
for the ratable benefit of the Lenders, shall have a security
interest in all of such Subsidiary's books and records pertaining to
the Collateral.
(d) Right of Inspection. The Administrative Agent shall at
any reasonable time or times during normal business hours have
access to all the books, correspondence and records of such
Subsidiary, and the Administrative Agent and its representatives may
examine the same, take extracts therefrom and make photocopies
thereof, and such Subsidiary agrees to render to the Administrative
Agent, at such Subsidiary's cost and expense to the extent expressly
9
provided in Section 11.5 of the Credit Agreement, such clerical and
other assistance as may be reasonably requested with regard thereto.
The Administrative Agent and its representatives shall at any
reasonable time or times during normal business hours also have the
right to enter into and upon any premises where any of the Inventory
or Equipment is located (or, in the case of any such premises not
owned or leased by such Subsidiary or any of its Subsidiaries, such
Subsidiary shall use its best efforts to grant to the Administrative
Agent such right) for the purpose of inspecting the same, observing
its use or otherwise protecting the Administrative Agent's and the
Lenders' interests therein.
(e) Compliance with Laws, etc. Such Subsidiary will comply
in all material respects with all Requirements of Law applicable to
the Collateral or any part thereof or to the operation of such
Subsidiary's business, except where failure to satisfy the foregoing
requirement could not reasonably be expected to have a material
adverse affect on the value of the Collateral taken as a whole or,
with respect to any material portion of the Collateral, have a
material adverse effect on the perfection or priority of the Liens
contemplated hereby relating to such Collateral; provided, however,
that such Subsidiary may contest any Requirement of Law in any
reasonable manner which shall not, in the sole opinion of the
Administrative Agent, adversely affect the Administrative Agent's or
the Lenders' rights or the priority of their Liens on the
Collateral.
(f) Limitation on Liens on Collateral. Such Subsidiary will
not create, incur or permit to exist, will defend the Collateral
against, and will take such other action as is necessary to remove,
any Lien or claim on or to the Collateral, other than the Liens
created hereby and other than as permitted pursuant to the Credit
Agreement, and will defend the right, title and interest of the
Administrative Agent and the Lenders in and to any of the Collateral
against the claims and demands of all Persons whomsoever.
(g) Limitations on Dispositions of Collateral. Such
Subsidiary will not sell, transfer, lease or otherwise dispose of
any of the Collateral, or attempt, offer or contract to do so except
as expressly permitted by the Credit Agreement.
(h) Limitations on Modifications, Waivers, Extensions of
Agreements Giving Rise to Accounts. Such Subsidiary will not (i)
except in the ordinary course of business consistent with historical
practices as of the date hereof, amend, modify, terminate or waive
any provision of any agreement giving rise to an Account in any
manner which could reasonably be expected to materially adversely
affect the value of Collateral taken as a whole, (ii) fail to
exercise promptly and diligently each and every material right which
it may have under each agreement giving rise to an Account (other
than any right of termination), except in a manner consistent with
the ordinary and customary conduct of business as generally
conducted by such Subsidiary over a period of time or (iii) fail to
deliver to the Administrative Agent a copy of each material demand,
notice or document received by it relating in any way to any
10
material agreement giving rise to an Account which affects the
interests of the Administrative Agent and the Lenders hereunder.
(i) Limitations on Discounts, Compromises, Extensions of
Accounts. Other than in the ordinary course of business as
generally conducted by such Subsidiary over a period of time, such
Subsidiary will not, without the prior written consent of the
Administrative Agent, grant any extension of the time of payment of
any of the Accounts, compromise, compound or settle the same for
less than the full amount thereof, release, wholly or partially, any
Person liable for the payment thereof, or allow any credit or
discount whatsoever thereon.
(j) Maintenance of Equipment. Such Subsidiary will maintain
each item of Equipment in good operating condition, ordinary wear
and tear and immaterial impairments of value and damage by the
elements excepted, and will provide all maintenance, service and
repairs necessary for such purpose.
(k) Maintenance of Insurance. Such Subsidiary will maintain,
with financially sound and reputable companies, insurance policies
(i) insuring the Inventory and Equipment against loss by fire,
explosion, theft and such other casualties as are usually insured
against by companies engaged in the same or similar business and
(ii) insuring such Subsidiary and the Administrative Agent, for the
benefit of the Lenders, against liability for personal injury and
property damage relating to such Inventory and Equipment, such
policies to be in such form and amounts and having such coverage as
may be reasonably satisfactory to the Administrative Agent, such
losses of $1 million or more shall be payable to such Subsidiary and
the Administrative Agent, for the benefit of the Lenders, as their
respective interests may appear. All such insurance shall (i) to
the extent requested by the Administrative Agent, provide for a 30-
day standard cancellation notice, (ii) name the Administrative
Agent, for the benefit of the Lenders, as an insured party and loss
payee and (iii) be reasonably satisfactory in all other respects to
the Administrative Agent. If reasonably requested by the
Administrative Agent, such Subsidiary shall deliver to the
Administrative Agent and the Lenders a report of a reputable
insurance broker with respect to such insurance, and such
supplemental reports with respect thereto as the Administrative
Agent may from time to time reasonably request.
(l) Further Identification of Collateral. Such Subsidiary
will furnish to the Administrative Agent and the Lenders from time
to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all
in reasonable detail.
(m) Notices. Such Subsidiary will advise the Administrative
Agent and the Lenders promptly, in reasonable detail, at their
respective addresses set forth in the Credit Agreement, (i) of any
Lien (other than Liens created hereby or permitted under the Credit
Agreement) on, or claim asserted against, any of the Collateral and
(ii) of the occurrence of any other event which could reasonably be
11
expected to have a material adverse effect on the aggregate value of
the Collateral taken as a whole or, with respect to any material
portion of the Collateral, have a material adverse effect on the
perfection or priority of the Liens contemplated hereby relating to
such Collateral.
(n) Changes in Locations, Name, etc. Such Subsidiary will
not (i) change the location of its chief executive office/chief
place of business from that specified in Section 4(e) hereof or
remove its books and records from the location specified in Section
4(c) hereof, (ii) permit any of the Inventory or Equipment to be
kept at a location other than those listed on Schedule II hereto or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Administrative
Agent in connection with this Security Agreement would become
seriously misleading, unless (x) such Subsidiary shall have given
the Administrative Agent at least 30 days' prior written notice
thereof (in the case of clause (i) and (iii) above) or at least one
Business Day's days prior written notice thereof (in the case of
clause (ii) above) and (y) such Subsidiary shall have taken, and
shall continue to take, all steps necessary to ensure that the
Administrative Agent, for the benefit of the Lenders, shall have,
and shall continue to have, a fully perfected first priority
security interest in the Collateral (subject to Liens permitted by
the Credit Agreement) notwithstanding such actions.
(o) Intellectual Property. Such Subsidiary will preserve all
of its registered trademarks, trade names, service marks and other
Intellectual Property, the non-preservation of which would have a
reasonable likelihood of materially impairing the value of the
Collateral taken as a whole. Whenever such Subsidiary, either by
itself or through any agent, employee, licensee or designee, shall
file an application for the registration of any patent or trademark
with the United States Patent and Trademark Office or any similar
office or agency in any other country or any political subdivision
thereof, such Subsidiary shall report such filing to the
Administrative Agent and the Lenders within five Business Days after
the last day of the fiscal quarter in which such filing occurs.
Upon request of the Administrative Agent, such Subsidiary shall
execute and deliver any and all agreements, instruments, documents,
and papers as the Administrative Agent may reasonably request to
evidence the Administrative Agent's and the Lenders' security
interest in any patent or trademark and the goodwill and General
Intangibles of such Subsidiary relating thereto or represented
thereby, and such Subsidiary hereby constitutes the Administrative
Agent its attorney-in-fact to execute and file all such writings for
the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power being coupled with an interest is
irrevocable until the Obligations are paid in full and the Revolving
Credit Commitments are terminated. In the event that any material
Intellectual Property is infringed, misappropriated or diluted by a
third party, in any material respect such Subsidiary shall promptly
notify the Administrative Agent after it learns thereof.
(p) Government Obligors. If an any time the aggregate amount
owing on (i) all Accounts and Contracts as to which a Governmental
12
Authority is an obligor and (ii) all "Accounts" and "Contracts"
under and as defined in the Company Security Agreement as to which a
Governmental Authority is an obligor (collectively, "Total
Government Accounts and Contracts"), exceeds 5% of the aggregate
owing on (i) all Accounts and Contracts and (ii) all "Accounts" and
"Contracts" under and as defined in the Company Security Agreement
(collectively, "Total Accounts and Contracts"), such Subsidiary
shall, if requested by the Administrative Agent, at such
Subsidiary's sole cost and expense, from and after the date on which
such aggregate amount first exceeds such percentage (regardless of
whether the aggregate amount owing on the Total Government Accounts
and Contracts shall equal less than 5% of the aggregate amount owing
on the Total Accounts and Contracts at any subsequent time), deliver
to the Administrative Agent such assignments, notices of assignment
and other documents or information as shall be necessary or
otherwise requested by the Administrative Agent to permit the
assignment hereunder of all Accounts and Contracts as to which a
Governmental Authority is an obligor pursuant to all applicable
Requirements of Law (including, without limitation, the Assignment
of Claims Act of 1940, as amended).
6. Administrative Agent's Appointment as Attorney-in-Fact.
(a) Powers. Each Subsidiary hereby irrevocably constitutes
and appoints the Administrative Agent and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of such
Subsidiary and in the name of such Subsidiary or in its own name, from
time to time in the Administrative Agent's discretion, for the purpose of
carrying out the terms of this Security 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
Security Agreement, and, without limiting the generality of the foregoing,
such Subsidiary hereby gives the Administrative Agent the power and right,
on behalf of such Subsidiary, without notice to or assent by such
Subsidiary, to do the following:
(i) at any time when any Event of Default shall have occurred
and is continuing, in the name of such Subsidiary or its own name,
or otherwise, to take possession of and endorse and collect any
checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Account, Instrument, General
Intangible or Contract or with respect to any other Collateral and
to file any claim or to take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such
moneys due under any Account, Instrument, General Intangible or
Contract or with respect to any other Collateral whenever payable;
(ii) in each case to the extent not paid, discharged or
effected by such Subsidiary as required by this Security Agreement
or the Credit Agreement, to pay or discharge taxes and Liens levied
or placed on or threatened against the Collateral, to effect any
repairs or any insurance called for by the terms of this Security
Agreement and to pay all or any part of the premiums therefor and
the costs thereof; and
13
(iii) upon the occurrence and during the continuance of any
Event of Default, (A) to direct any party liable for any payment
under any of the Collateral to make payment of any and all moneys
due or to become due thereunder directly to the Administrative Agent
or as the Administrative Agent shall direct; (B) to ask or demand
for, collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (C) to sign and endorse
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; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce
any other right in respect of any Collateral; (E) to defend any
suit, action or proceeding brought against such Subsidiary with
respect to any Collateral; (F) to settle, compromise or adjust any
suit, action or proceeding described in clause (E) above and, in
connection therewith, to give such discharges or releases as the
Administrative Agent may deem appropriate; (G) to assign any
Intellectual Property (along with the goodwill of the business to
which any such Intellectual Property pertains), throughout the world
for such term or terms, on such conditions, and in such manner, as
the Administrative Agent shall in its sole discretion determine; and
(H) generally, to sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Administrative Agent were the absolute
owner thereof for all purposes, and to do, at the Administrative
Agent's option and such Subsidiary's expense, at any time, or from
time to time, all acts and things which the Administrative Agent
deems necessary to protect, preserve or realize upon the Collateral
and the Administrative Agent's and the Lenders' Liens thereon and to
effect the intent of this Security Agreement, all as fully and
effectively as such Subsidiary might do.
Each Subsidiary hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable.
(b) Other Powers. Each Subsidiary also authorizes the
Administrative Agent, at any time and from time to time, to execute, in
connection with any sale provided for in Section 9 hereof, any
endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.
(c) No Duty on Administrative Agent or Lenders' Part. The
powers conferred on the Administrative Agent and the Lenders hereunder are
solely to protect the Administrative Agent's and the Lenders' interests in
the Collateral and shall not impose any duty upon the Administrative Agent
or any Lender to exercise any such powers. Except for the duty of the
Administrative Agent described in Section 10 hereof, and the accounting by
the Administrative Agent for moneys actually received by it hereunder,
neither the Administrative Agent nor any Lender shall have any duties
hereunder as to any Collateral (including, without limitation, as to
ascertaining any matters or taking any action with respect to any
Collateral or as to taking any necessary steps to preserve rights against
14
prior parties or any other rights pertaining to any Collateral). The
Administrative Agent and the Lenders shall be accountable only for amounts
that they actually receive as a result of the exercise of the powers
conferred on the Administrative Agent and the Lenders hereunder, and
neither they nor any of their officers, directors, employees or agents
shall be responsible to any Subsidiary for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
7. Performance by Administrative Agent of Subsidiary's
Obligations. If any Subsidiary fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as provided for
by the terms of this Security Agreement, shall itself perform or comply,
or otherwise cause performance or compliance, with such agreement, the
expenses of the Administrative Agent incurred in connection with such
performance or compliance, together with interest thereon at a rate per
annum equal to the Alternate Base Rate plus the Applicable Margin plus 2%,
shall be payable by such Subsidiary to the Administrative Agent on demand
and shall constitute Obligations secured hereby. The Administrative Agent
agrees to notify such Subsidiary promptly after incurring any expenses
pursuant to this Section 7, provided that the failure of the
Administrative Agent to so notify such Subsidiary shall in no way impair
the rights of the Administrative Agent under this Section 7.
8. Proceeds. In addition to the rights of the Administrative
Agent and the Lenders specified in Section 3(d) hereof with respect to
payments of Accounts, it is agreed that if an Event of Default shall occur
and be continuing (a) the Administrative Agent may require, by notice to
each Subsidiary, all Proceeds received by each Subsidiary consisting of
cash, checks and other near-cash items to be held by such Subsidiary in
trust for the Administrative Agent and the Lenders, segregated from other
funds of such Subsidiary, and shall, forthwith upon receipt by such
Subsidiary, be turned over to the Administrative Agent in the exact form
received by such Subsidiary (duly endorsed by such Subsidiary to the
Administrative Agent, if required), and (b) any and all such Proceeds
received by the Administrative Agent (whether from any Subsidiary or
otherwise) may, in the sole discretion of the Administrative Agent, be
held by the Administrative Agent for the ratable benefit of the Lenders as
collateral security for, and/or then or at any time thereafter may be
applied by the Administrative Agent against, the Obligations (whether
matured or unmatured), such application to be in such order as the
Administrative Agent shall elect. Any balance of such Proceeds remaining
after the Obligations shall have been paid in full, the Revolving Credit
Commitments shall have been terminated and no Letters of Credit shall be
outstanding shall be paid over to the Subsidiaries or to whomsoever may be
lawfully entitled to receive the same.
9. Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted to them in
this Security Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a
secured party under the Code. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by law referred to below) to or upon any
Subsidiary or any other Person (all and each of which demands, defenses,
15
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral,
or any part thereof, and/or may forthwith sell, lease, assign, give option
or options to purchase, or otherwise dispose of and deliver the Collateral
or any part thereof (or contract to do any of the foregoing), in one or
more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Administrative Agent or any Lender or elsewhere
upon such terms and conditions as it may deem advisable and at such prices
as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any 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 Subsidiary, which right or equity is hereby
waived and released. Each Subsidiary further agrees, at the
Administrative Agent's request, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative
Agent shall reasonably select, whether at such Subsidiary's premises or
elsewhere. The Administrative Agent shall apply the proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein
or incidental to the care or safekeeping of any of the Collateral or in
any way relating to the Collateral or the rights of the Administrative
Agent and the Lenders hereunder, including, without limitation, reasonable
attorneys' fees and disbursements, to the payment in whole or in part of
the Obligations, in such order as the Administrative Agent may elect, and
only after such application and after the payment by the Administrative
Agent of any other amount required by any provision of law, including,
without limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to any Subsidiary.
To the extent permitted by applicable law, each Subsidiary waives all
claims, damages and demands it may acquire against the Administrative
Agent or any Lender arising out of the exercise by them of any rights
hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition. Each Subsidiary shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are
insufficient to pay the Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any Lender to collect
such deficiency. Each Subsidiary further waives and agrees not to assert
any rights or privileges which it may acquire under Section 9-112 of the
Code.
10. Limitation on Duties Regarding Preservation of
Collateral. The Administrative Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal
with it in the same manner as the Administrative Agent deals with similar
property for its own account. Neither the Administrative Agent, any
Lender, nor any of their respective directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon all
or any part of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon
the request of any Subsidiary or otherwise.
16
11. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable
and powers coupled with an interest.
12. Severability. Any provision of this Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
13. Paragraph Headings. The paragraph headings used in this
Security Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.
14. No Waiver; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 15 hereof), 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 or in any breach of any
of the terms and conditions hereof. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. A waiver by the Administrative Agent
or any Lender of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Administrative
Agent or such Lender would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any rights or remedies
provided by law.
15. Waivers and Amendments; Successors and Assigns;
Governing Law. None of the terms or provisions of this Security Agreement
may be waived, amended, supplemented or otherwise modified except in
accordance with Section 11.1 of the Credit Agreement. This Security
Agreement shall be binding upon the successors and assigns of each
Subsidiary and shall inure to the benefit of the Administrative Agent and
the Lenders and their respective successors and assigns. This Security
Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
16. Notices. All notices, requests and demands given
hereunder shall be given in accordance with Paragraph 16 of the Subsidiary
Guarantee.
17. Authority of Administrative Agent. Each Subsidiary
acknowledges that the rights and responsibilities of the Administrative
Agent under this Security Agreement with respect to any action taken by
the Administrative Agent or the exercise or non-exercise by the
Administrative Agent of any option, right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this
Security Agreement shall, as between the Administrative Agent and the
17
Lenders, be governed by the Credit Agreement and by such other agreements
with respect thereto as may exist from time to time among them, but, as
between the Administrative Agent and each Subsidiary, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Lenders
with full and valid authority so to act or refrain from acting, and such
Subsidiary shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
18. Termination. This Security Agreement and the security
interest created hereby shall terminate when all the Obligations have been
paid in full and the Revolving Credit Commitments shall have been
terminated at which time the Administrative Agent shall execute and
deliver to each Subsidiary or such person or persons as such Subsidiary
shall reasonably designate, all Uniform Commercial Code termination
statements and similar documents prepared by such Subsidiary at its
expense which such Subsidiary shall reasonably request to evidence such
termination; provided, that any indemnity set forth herein shall survive
any such termination. At the request and expense of the Company, each
Subsidiary shall be released from its obligations hereunder, in the event
that all the capital stock of such Subsidiary shall be sold, transferred
or otherwise disposed of in accordance with the terms of the Credit
Agreement; provided that the Company shall have delivered to the
Administrative Agent, at least ten Business Days prior to the date of the
proposed release, a written request for release identifying the relevant
Subsidiary and the terms of the sale or other disposition in reasonable
detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Company stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents. Upon any sale or other disposition of any item of Collateral
by any Subsidiary expressly permitted by the Credit Agreement (other than
sales of Inventory in the ordinary course of business), the Administrative
Agent, at the request and expense of the Company, shall release the
Collateral being sold and shall reassign and deliver such Collateral to
such Subsidiary (without recourse and without any representation or
warranty), together with appropriate instruments of reassignment and
release; provided that (i) at the time of such request and such release no
Event of Default shall have occurred and be continuing and (ii) the
Company shall have delivered to the Administrative Agent, at least ten
Business Days prior to the date of the proposed release, a written request
for release describing the item of Collateral and the terms of the sale or
other disposition in reasonable detail, including the price thereof and
any expenses in connection therewith, together with a certification by the
Company stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents. Any execution and delivery of
termination statements or documents pursuant to this Section 18 shall be
without recourse to or representation or warranty by the Administrative
Agent or any Lender.
IN WITNESS WHEREOF, each Subsidiary has caused this Security
Agreement to be duly executed and delivered as of the date first above
written.
DIAMOND WIRE & CABLE CO.
18
By____________________________________
Name:
Title:
ESSEX GROUP EXPORT INC.
By___________________________________
Name:
Title:
ESSEX INTERNATIONAL, INC.
By__________________________________
Name:
Title:
US SAMICA CORPORATION
By____________________________________
Name:
Title:
INTERSTATE INDUSTRIES HOLDINGS
INC.
By____________________________________
Name:
Title:
INTERSTATE INDUSTRIES, INC.
By____________________________________
Name:
Title:
SCHEDULE I
to Subsidiary
Security Agreement
TRADEMARKS AND TRADE NAMES
Trademark and/or
Country Trade Name Registration Expiration
------- ---------------- ------------ ----------
US FEMCO 1,584,450 02/27/00*
US ISOMICA 575,202 06/02/03**
US MICANITA and Drawing 22,623 03/07/03**
US SAMICA 558,013 04/22/02**
US SAMICAPOR 1,095,179 07/04/98**
US SAMICATHERM 995,614 03/20/03**
* Registered to Femco Magnet Wire Corporation.
** These trademarks and/or tradenames are licensed for use by
US Samica Corporation.
TECHNOLOGY LICENSING AGREEMENTS
Parties Description
------- -----------
ESSEX GROUP, INC. Patent license for technology relating to
American Telephone and coaxial cables and land lines
Telegraph Co.
ESSEX GROUP, INC. Cross license for intellectual property
Aismalibar S.A. rights.
ESSEX GROUP, INC. Agreement concerning intellectual property
Cablec Corporation concerning transmission, distribution,
power and control cable.
ESSEX GROUP, INC. Agreement concerning intellectual property
Chrysler Corporation relating to products used in the
manufacture of or in motor vehicles.
ESSEX GROUP, INC. Agreement for technology relating to magnet
Femco Magnet Wire wire.
Corporation
ESSEX GROUP, INC. Agreement concerning intellectual property
Ford Motor Company relating to products used in the
manufacture of or in motor vehicles.
ESSEX GROUP, INC. Patent license for technology relating to
Groggins Plastic, Inc. spools and lifting handles.
ESSEX GROUP, INC. Cross license for intellectual property
Insulation Systems and rights.
Machines, Ltd.
ESSEX GROUP, INC. Cross license for intellectual property
Isola Essex A.G. rights.
ESSEX GROUP, INC. Agreement for technology concerning
Windings, Inc. fabricating of packages and/or Reelex
Machines.
ESSEX GROUP, INC. Cross licenses for patents relating to
Southwire Company shaft furnaces for melting copper and to
apparatus for converting copper into copper
bar and rod.
/TABLE
SCHEDULE II
to Subsidiary
Security Agreement
Locations of Inventory and Equipment
----------------------------------
Windcrest Rd.
Rutland, VT
Rutland County
Attala Industrial Park
Kosciusko, MS 39090
Attala County
Old ▇▇▇▇ - Filthy Lucre Lode
Black Hills
▇▇▇▇▇▇ County, SD
Location Code: N/A
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
EXHIBIT F
FORM OF SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE, dated as of October 31, 1996, by each of
the corporations that are signatories hereto (the "Guarantors") in favor
of THE CHASE MANHATTAN BANK, a New York banking corporation, as agent (in
such capacity, the "Administrative Agent") for the lenders (the "Lenders")
that are parties to the Credit Agreement described below.
W I T N E S S E T H :
WHEREAS, Essex Group, Inc., a Michigan corporation (the
"Company"), is party to a Credit Agreement, dated as of October 31, 1996,
among the Company, BCP/Essex Holdings Inc., the Administrative Agent and
the Lenders (as the same may from time to time be amended, supplemented or
otherwise modified, the "Credit Agreement");
WHEREAS, pursuant to the terms of the Credit Agreement and the
other Loan Documents, the Lenders have agreed to make certain Extensions
of Credit (as hereinafter defined) to or for the benefit of the Company;
WHEREAS, the Company owns directly or indirectly all of the
issued and outstanding stock of each Guarantor;
WHEREAS, the Company and the Guarantors are engaged in related
businesses, and each Guarantor will derive substantial direct and indirect
benefit from the making of the Extensions of Credit; and
WHEREAS, the obligation of the Lenders to make the Extensions
of Credit is conditioned upon, among other things, the execution and
delivery by the Guarantors of this Guarantee;
NOW, THEREFORE, in consideration of the premises and to induce
the Lenders to enter into the Credit Agreement and to make the Extensions
of Credit, each Guarantor hereby agrees with and for the benefit of the
Administrative Agent and the Lenders as follows:
1. Defined Terms. As used in this Guarantee, terms defined
in the Credit Agreement are used herein as therein defined, and the
following terms shall have the following meanings:
"Adjusted Net Worth" of any Guarantor shall mean, as of any
date of determination thereof, the excess of (i) the amount of the
"present fair saleable value" of the assets of such Guarantor as of
the date of such determination, over (ii) the amount of all
"liabilities of such Guarantor, contingent or otherwise", as of the
date of such determination, as such quoted terms are determined in
accordance with applicable federal and state laws governing
determinations of the insolvency of debtors.
"Determination Date" shall mean, with respect to any
Guarantor, the earlier of (a) the date of commencement of a case
under Title 11 of the United States Code in which such Guarantor is
2
a debtor and (b) the date enforcement hereunder is sought with
respect to such Guarantor.
"Extensions of Credit" shall mean (i) all loans or advances
made to the Company under any Loan Document, (ii) all letters of
credit issued for the account of the Company under any Loan
Document, (iii) all bankers' acceptances created for the account of
the Company under any Loan Document and (iv) all other extensions of
credit to or for the benefit of the Company under any Loan Document.
"Maximum Guaranteed Amount" for any Guarantor shall mean, as
of the Determination Date for such Guarantor, the sum of (i) an
amount equal to the sum of each Extension of Credit (or portion
thereof) the proceeds of which are used to make a Valuable Transfer
(as hereinafter defined) to such Guarantor plus interest on such
amount at the rate specified in the Credit Agreement plus (ii) the
greater of (I) ninety-five percent (95%) of the Adjusted Net Worth
of such Guarantor at the date of the execution of this Guarantee
before giving effect to any Extensions of Credit made on such date
and (II) ninety-five percent (95%) of the Adjusted Net Worth of such
Guarantor at the Determination Date for such Guarantor. For
purposes hereof, the term "Valuable Transfer" shall mean to (i) make
a loan, advance or capital contribution to such Guarantor, (ii)
acquire from such Guarantor debt securities or other obligations of
such Guarantor, (iii) acquire property, any interest in which is
transferred to such Guarantor (but only to the extent of the
economic benefit to such Guarantor of the interest so transferred),
(iv) purchase equity securities of such Guarantor or (v) otherwise
confer, directly or indirectly, an economic benefit on such
Guarantor (but only to the extent of such benefit).
"Obligations" shall mean the unpaid principal of and interest
on (including, without limitation, interest accruing after the
maturity of the Loans and Reimbursement Obligations and interest
accruing 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) the Loans and
all other obligations and liabilities of the Company to the
Administrative Agent and the Lenders (or, in the case of any
Interest Rate Protection Agreement, any Affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Credit Agreement, the Loans, the
other Loan Documents, the Letters of Credit or any other document
made, delivered or given in connection therewith, whether on account
of principal, interest, reimbursement obligations, fees, charges,
indemnities, costs, expenses (including, without limitation, all
reasonable fees and disbursements of counsel to the Administrative
Agent and the Lenders that are required to be paid by the Company
pursuant to the Credit Agreement) or otherwise.
2. Guarantee (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the
Administrative Agent and the Lenders and their respective successors,
endorsees, transferees and assigns, the prompt and complete payment and
3
performance by the Company when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, and each Guarantor further
agrees to pay any and all expenses (including, without limitation, all
reasonable fees and disbursements of counsel) which may be paid or
incurred by the Administrative Agent or any Lender in enforcing, or
obtaining advice of counsel in respect of, any rights under this
Guarantee; provided, however, that, 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 such Guarantor's Maximum Guaranteed Amount as determined at the
Determination Date for such Guarantor; and further provided, that the
Maximum Guaranteed Amount for each Guarantor hereunder 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.
(b) Each Guarantor agrees that the Obligations may at any
time and from time to time exceed the Maximum Guaranteed Amount of such
Guarantor or of all of the Guarantors without impairing this Guarantee or
affecting the rights and remedies of the Administrative Agent and the
Lenders hereunder.
(c) No payment or payments made by the Company, any of the
Guarantors, any other guarantor or any other Person or received or
collected by the Administrative 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
Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of any Guarantor hereunder which shall, notwithstanding any
such payment or payments other than payments made by such Guarantor in
respect of the Obligations or payments received or collected from such
Guarantor in respect of the Obligations, remain liable for the Obligations
up to its Maximum Guaranteed Amount until the Obligations are paid in
full, the Revolving Credit Commitments are terminated and no Letters of
Credit are outstanding.
(d) Each Guarantor agrees that whenever, at any time, or from
time to time, it shall make any payment to the Administrative Agent or any
Lender on account of its liability hereunder, it will notify the
Administrative Agent in writing that such payment is made under this
Guarantee for such purpose.
3. Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate
share of any payment made hereunder, such Guarantor shall be entitled to
seek and receive contribution from and against any other Guarantor
hereunder who has not paid its proportionate share of such payment. Each
Guarantor's right of contribution shall be subject to the terms and
conditions of Paragraph 5 hereof. The provisions of this Paragraph 3
shall in no respect limit the obligations and liabilities of any Guarantor
to the Administrative Agent and the Lenders, and each Guarantor shall
remain liable to the Administrative Agent and the Lenders for the full
amount guaranteed by such Guarantor hereunder.
4. Right of Set-off. Each Guarantor hereby irrevocably
authorizes each Lender at any time and from time to time, if an Event of
4
Default shall have occurred and be continuing, without notice to such
Guarantor or any other Guarantor, any such notice being expressly waived
by each Guarantor to the extent permitted by applicable law, 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 such Lender to or for the credit or the account of such
Guarantor, or any part thereof in such amounts as such Lender may elect,
against and on account of the obligations and liabilities of such
Guarantor to such Lender hereunder and claims of every nature and
description of such Lender against such Guarantor, in any currency,
whether arising hereunder, under the Credit Agreement or any Revolving
Credit Notes, as such Lender may elect, whether or not the Administrative
Agent or any Lender has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. Each
Lender agrees to notify such Guarantor promptly of any such set-off and
the application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application.
The rights of each Lender under this paragraph are in addition to other
rights and remedies (including, without limitation, other rights of set-
off) which such Lender may have.
5. No Subrogation. Notwithstanding any payment or payments
made by any of the Guarantors hereunder or any set-off or application of
funds of any of the Guarantors by any Lender, no Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent
or any Lender against the Company or any other Guarantor or any collateral
security or guarantee or right of offset held by any Lender for the
payment of the Obligations, nor shall any 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 Administrative Agent and the Lenders by the
Company on account of the Obligations are indefeasibly paid in full, the
Revolving Credit Commitments are terminated and no Letters of Credit are
outstanding. If any amount shall be paid to any Guarantor on account of
such subrogation rights at any time when all of the Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in
trust for the Administrative Agent and the Lenders, segregated from other
funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly endorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Administrative Agent
and the Lenders may determine.
6. Amendments, etc. with respect to the Obligations; Waiver
of Rights. Each Guarantor shall remain obligated hereunder and under the
other Loan Documents notwithstanding that, without any reservation of
rights against any Guarantor and without notice to or further assent by
any Guarantor, any demand for payment of any of the Obligations made by
the Administrative Agent or any Lender may be rescinded by such party and
any of the Obligations continued, and the Obligations, or the liability of
any other party upon or for any part thereof, or any collateral security
or guarantee therefor or right of offset with respect thereto, may, from
time to time, in whole or in part, be renewed, extended, amended,
5
modified, accelerated, compromised, waived, surrendered or released by the
Administrative Agent or any Lender and this Guarantee, the Credit
Agreement, any Revolving Credit Notes, the Loan Documents, any other
collateral security document or other guarantee or document in connection
therewith may be amended, modified, supplemented or terminated, in whole
or in part, and any collateral security, guarantee or right of offset at
any time held by the Administrative Agent or any Lender for the payment of
the Obligations may be sold, exchanged, waived, surrendered or released.
Neither the Administrative Agent nor any Lender shall have any obligation
to protect, secure, perfect or insure any Lien at any time held as
security for the Obligations or for this Guarantee or any property subject
thereto. When making any demand hereunder against any of the Guarantors,
the Administrative Agent or any Lender may, but shall be under no
obligation to, make a similar demand on the Company or any other Guarantor
or guarantor, and any failure by the Administrative Agent or any Lender to
make any such demand or to collect any payments from the Company or any
such other Guarantor or guarantor or any release of the Company or such
other Guarantor or guarantor shall not relieve any of the Guarantors in
respect of which a demand or collection is not made or any of the
Guarantors not so released of their several obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies, express
or implied, or as a matter of law, of the Administrative Agent or any
Lender against any of the Guarantors. For the purposes hereof "demand"
shall include the commencement and continuance of any legal proceedings.
7. Guarantee Absolute and Unconditional. To the extent
permitted by applicable law, each Guarantor waives any and all notice of
the creation, renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by the Administrative Agent or any Lender
upon this Guarantee or acceptance of this Guarantee, the Obligations, and
any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon
this Guarantee; and all dealings between the Company or any of the
Guarantors and the Administrative Agent or any Lender shall likewise be
conclusively presumed to have been had or consummated in reliance upon
this Guarantee. To the extent permitted by applicable law, 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 Obligations. Each Guarantor understands and agrees that
this Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity,
regularity or enforceability of the Credit Agreement, any Revolving Credit
Notes, any of the other Loan Documents, any of the Obligations or any
other collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the
Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at
any time be available to or be asserted by the Company against the
Administrative 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 Obligations, or of
such Guarantor under this Guarantee, in bankruptcy or in any other
instance. When pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent and any Lender may, but shall be under
no obligation to, pursue such rights and remedies as it may have against
6
the Company or any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect thereto,
and any failure by the Administrative Agent or any Lender to pursue such
other rights or remedies or to collect any payments from the Company or
any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Company or any such other Person or any such collateral security,
guarantee or right of offset, shall not relieve such Guarantor of any
liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against such Guarantor.
8. Reinstatement. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any
Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of 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.
9. Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in U.S. Dollars at the office of the Administrative Agent
located at c/o Chase Agent Bank Services Group, Grand Central Tower, ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇: ▇▇▇▇▇ ▇▇▇▇, Clearing
Account No. ▇▇▇-▇▇▇-▇▇▇.
10. Representations and Warranties. Each Guarantor hereby
represents and warrants that the representations and warranties set forth
in Section 4 of the Credit Agreement as they relate to such Guarantor,
each of which is hereby incorporated herein by reference, are true and
correct, and the Administrative 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
knowledge shall, for the purposes of this paragraph, be deemed to be a
reference to such Guarantor's knowledge.
Each Guarantor agrees that the foregoing representations and
warranties shall be deemed to have been made by such Guarantor on the date
of each borrowing by the Company, and on the date of issuance of each
Letter of Credit, under the Credit Agreement on and as of such date of
borrowing or issuance as though made hereunder on and as of such date
11. Covenants. Each Guarantor hereby agrees that, from and
after the Effective Date and so long as the Revolving Credit Commitments
remain in effect, any Revolving Credit Note or Letter of Credit remains
outstanding and unpaid or any other amount is owing to any Bank or the
Administrative Agent under the Credit Agreement or any other Loan
Document, such Guarantor shall take, or shall refrain from taking, as the
case may be, all actions that are necessary to be taken or not taken so
that no violation of any provision, covenant or agreement contained in
Section 6 or 7 of the Credit Agreement, and so that no Default or Event of
7
Default, is caused by any act or failure to act of such Guarantor or any
of its Subsidiaries.
12. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
13. Paragraph Headings. The paragraph headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
14. No Waiver; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Paragraph 15 hereof), 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 or in any breach of any
of the terms and conditions hereof. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. A waiver by the Administrative Agent
or any Lender of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Administrative
Agent or such Lender would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any rights or remedies
provided by law.
15. Integration; Waivers and Amendments; Successors and
Assigns; Governing Law. This Guarantee represents the entire agreement of
each Guarantor with respect to the subject matter hereof and there are no
promises or representations by the Administrative Agent or any Lender
relative to the subject matter hereof not reflected herein. None of the
terms or provisions of this Guarantee may be waived, amended or
supplemented or otherwise modified except in accordance with Section 11.1
of the Credit Agreement. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of
the Administrative Agent and the Lenders and their respective successors
and assigns. This Guarantee shall be governed by and be construed and
interpreted in accordance with the law of the State of New York.
16. Notices. All notices, requests and demands given
hereunder shall be given in accordance with Section 11.2 of the Credit
Agreement, provided that all notices, requests and demands to or upon a
Guarantor shall be addressed to such Guarantor at the address provided for
such Guarantor in Schedule I hereto or at such other address of which the
Administrative Agent shall have been notified pursuant to the Credit
Agreement.
8
17. Counterparts. This Guarantee may be executed by one or
more of the parties hereto on any number of separate counterparts and all
of said counterparts taken together shall be deemed to constitute one and
the same instrument.
18. Submission To Jurisdiction; Waivers. Each of the
Guarantors hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Guarantee and the other Loan
Documents to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of
the United 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 Guarantor at the address provided for such
Guarantor in Schedule I hereto or at such other address of which the
Administrative Agent shall have been notified pursuant to the Credit
Agreement;
(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 sue 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 Paragraph any special, exemplary,
punitive or consequential damages.
19. Termination. This Guarantee shall remain in full force
and effect and be binding in accordance with and to the extent of its
terms upon each Guarantor and the successors and assigns thereof, and
shall inure to the benefit of the Administrative Agent and the Lenders,
and their respective successors, endorsees, transferees and assigns, until
all the Obligations and the obligations of each Guarantor under this
Guarantee shall have been satisfied by payment in full, the Revolving
Credit Commitments shall be terminated and no Letters of Credit are
outstanding. At the request and 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 accordance with the terms of the Credit Agreement; provided
that the Company shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Guarantor and the
terms of the sale or other disposition in reasonable detail, including the
price thereof and any expenses in connection therewith, together with a
9
certification by the Company stating that such transaction is in
compliance with the Credit Agreement and the other Loan Documents.
20. WAIVER OF JURY TRIAL. EACH OF THE GUARANTORS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS GUARANTEE OR ANY OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee to be duly executed and delivered by its duly authorized
officer as of the day and year first above written.
DIAMOND WIRE & CABLE CO.
By ____________________________
Name:
Title:
ESSEX GROUP EXPORT INC.
By ____________________________
Name:
Title:
ESSEX INTERNATIONAL, INC.
By ____________________________
Name:
Title:
US SAMICA CORPORATION
By ____________________________
Name:
Title:
INTERSTATE INDUSTRIES HOLDINGS
INC.
By____________________________________
Name:
Title:
INTERSTATE INDUSTRIES, INC.
By____________________________________
Name:
Title:
SCHEDULE I
Addresses of Guarantors
c/o Essex Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇ ▇. ▇▇▇▇
EXHIBIT G-1
[▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ LETTERHEAD]
October 31, 1996
BCP/Essex Holdings Inc.
Credit Agreement dated as of October 31, 1996
Ladies and Gentlemen:
We have acted as New York counsel to BCP/Essex Holdings Inc.,
a Delaware corporation ("Holdings"), in connection with the Credit
Agreement dated as of October 31, 1996 (the "Credit Agreement"), among
Holdings, Essex Group, Inc., a Michigan corporation ("Essex"), the lending
institutions party thereto (the "Lenders") and The Chase Manhattan Bank,
as Administrative Agent for the Lenders ("Administrative Agent"). This
opinion is being delivered to you pursuant to Section 5.1(g)(i) of the
Credit Agreement. Capitalized terms used but not defined herein have the
meanings assigned to them in the Credit Agreement.
In that connection, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
corporate records and other instruments as we have deemed necessary or
appropriate for purposes of this opinion, including (i) the Credit
Agreement, (ii) each Note, (iii) the Pledge Agreements, (iv) the Security
Agreements, (v) the Mortgages, (vi) the Subsidiary Guarantee, (vii) the
Certificates of Incorporation of each of the Loan Parties, as amended,
(viii) the By-laws of each of the Loan Parties, (ix) resolutions adopted
by the Boards of Directors of each of the Loan Parties on October 28, 1996
and (x) executed copies of the Form UCC-1 financing statements listed on
Schedule I hereto (the "Financing Statements"). The documents described
in clauses (iii), (iv), (v) and (vi) of the immediately preceding sentence
are sometimes referred to herein as the "Security Documents" and, together
with the documents described in clauses (i) and (ii), are sometimes
referred to herein as the "Loan Documents". We have also relied, with
respect to certain factual matters, on the representations and warranties
of the Loan Parties contained in the Loan Documents and have assumed
compliance by the Loan Parties with the terms of the Loan Documents.
In rendering our opinion, we have assumed the due
authorization, execution and delivery of the Credit Agreement and the
other Loan Documents by all parties thereto other than the Loan Documents
as executed by Holdings and Essex International, Inc. ("Essex
International").
Based on the foregoing and subject to the qualifications
hereinafter set forth, we are of opinion as follows:
1. Holdings is a corporation incorporated under the laws of
the State of Delaware, and, based solely on a certificate from the
Secretary of State of the State of Delaware, Essex International is a
corporation validly existing and in good standing under the laws of the
State of Delaware.
Each of Holdings and Essex International has all necessary
corporate power and authority to execute and deliver the Loan Documents
and to perform its obligations thereunder, and the execution and delivery
of the Loan Documents by each of them, the performance of their
obligations thereunder and the grant by them of security interests
2
pursuant to the Security Documents have been duly authorized by all
requisite corporate action on the part of each of Holdings and Essex
International.
2. The execution and delivery by the Loan Parties of the Loan
Documents, the performance by the Loan Parties of their obligations
thereunder and the grant by the Loan Parties of security interests
pursuant to the Security Documents (a) will not result in or require the
creation or imposition of any Lien on any of the properties or revenues
pursuant to any agreement listed on Schedule I hereto; and (b) will not
conflict with, result in a breach of or constitute a default under (i) the
Certificate of Incorporation or By-laws of Holdings or Essex
International, (ii) any law, rule or regulation of the United States of
America (including, without limitation, Regulations G, T, U and X of the
Board of Governors of the Federal Reserve System) or the State of New York
or the General Corporation Law of the State of Delaware, (iii) the
provisions of any agreement listed on Schedule I hereto or (iv) to our
knowledge, any order or decree of any court or government agency or
instrumentality. In connection with the foregoing, we point out that
certain of the agreements referred to in clause (b)(iii) above are or may
be governed by laws other than the laws of the State of New York. For
purposes of the opinion expressed in this paragraph, however, we have
assumed that all such agreements are governed by and would be interpreted
in accordance with the laws of the State of New York.
3. Each of Holdings and Essex International has duly executed
and delivered each of the Loan Documents to which it is a party, and each
such document constitutes a legal, valid and binding obligation of each of
Holdings and Essex International, enforceable against each of Holdings and
Essex International in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
and other similar laws relating to or affecting creditor's rights
generally from time to time in effect and to general principles of equity
(including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing), regardless of whether considered in a
proceeding in equity or at law. The foregoing opinion is subject to the
following qualifications: (i) certain provisions of the Security Documents
(including the Mortgages) are or may be unenforceable in whole or part
under the laws of the State of New York, but the inclusion of such
provisions does not affect the validity of the Security Documents, and
each such Security Document contains adequate provisions for the practical
realization of the principal rights and benefits intended to be afforded
thereby, except for economic consequences resulting from any delay imposed
by, or any procedure required by, applicable New York laws, rules,
regulations and court decisions and by constitutional requirements,
(ii) insofar as provisions contained in the Loan Documents provide for
indemnification, the enforceability thereof may be limited by public
policy considerations, (iii) the availability of a decree for specific
performance or an injunction is subject to the discretion of the court
requested to issue any such decree or injunction, (iv) we express no
opinion as to the effect of the laws of any jurisdiction other than the
State of New York where any lender may be located or where enforcement of
the Security Documents may be sought that limits the rates of interest
legally chargeable or collectible and (v) the enforceability of the
Security Agreements and the Mortgages may be subject to the rights of
lessees or other account debtors, the terms of the leases or other
contracts between the relevant Loan Party and such lessees or other
3
account debtors and any claims or defenses of such lessees or account
debtors against such Loan Party.
4. No authorization, approval or other action by, and no
notice to, consent of, order of or filing with, any United States Federal,
New York or, to the extent required under the General Corporation Law of
the State of Delaware, Delaware governmental authority is required in
connection with the execution, delivery and performance by each of the
Loan Parties of any of the Loan Documents or the grant by each of the Loan
Parties of the security interests under the Pledge Agreements and the
Security Agreements, other than (i) those that have been made or obtained
and are in full force and effect or as to which the failure to be made or
obtained or to be in full force and effect would not result, individually
or in the aggregate, in a material adverse effect on each of Holdings and
Essex International and its subsidiaries, taken as a whole, (ii) such
registrations, filings and approvals under federal or state securities
laws as may be necessary in connection with the sale of the Pledged Stock
pursuant to the Pledge Agreements and (iii) filings of Uniform Commercial
Code financing statements in appropriate offices in order to perfect
certain security interests granted under the Security Agreements.
5. No Loan Party is an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940. No Loan
Party is a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
6. Execution and delivery of the Pledge Agreements, together
with delivery to and the continued possession by the Collateral Agent, in
each case in the State of New York, of all the Pledged Stock, issued or
endorsed in the name of the Collateral Agent or in blank or together with
stock powers properly executed in the name of the Collateral Agent or in
blank with respect thereto, will create a valid and duly perfected lien on
and a security interest in the Pledged Stock pledged on the date hereof
under the Pledge Agreements, which security interest in such Pledged Stock
will be prior to any security interest, lien, charge or encumbrance that
must be perfected by possession or filing under the Uniform Commercial
Code of the State of New York as in effect on the date hereof (the "New
York UCC"). The opinion expressed in this paragraph 6 is based on the
assumption that the Collateral Agent and each of the Lenders have taken
delivery of, and acquired their security interest in, the Pledged Stock in
good faith and without notice of any adverse claim. For purposes of the
foregoing sentence, the terms "good faith", "notice" and "adverse claim"
shall have the meanings given to such terms in the New York UCC.
7. The provisions of each of the Security Agreements are
effective to create in favor of the Collateral Agent a valid security
interest in all right, title and interest of each Loan Party in such of
the Collateral (as defined in the relevant Security Agreement) as
constitutes "accounts", "documents", "equipment", "general intangibles",
"instruments" and "inventory" within the meaning of the New York UCC (such
of the Collateral being hereinafter referred to as the "Specified
Collateral"), to the extent that the creation of security interests in the
Specified Collateral is governed by the New York UCC.
The opinion expressed in this paragraph 7 is based on the
assumption that all filings and recordings necessary to maintain the
effectiveness of the Financing Statements will be made, including without
limitation (i) continuation statements, which are required under Article 9
4
of the New York UCC to be filed within the period of six months prior to
the expiration of five years from the date of the original filing of the
Financing Statements, and (ii) such other statements as may be required by
(x) any change in name, identity or corporate structure of either of
Holdings or Essex International or the Collateral Agent, (y) any change in
the location of the chief executive offices of either of Holdings or Essex
International, and (z) any change of location of any of the Collateral
(which, in the case of Collateral removed from the State of New York, will
require further action to be taken in the jurisdiction to which such
Collateral has been removed).
Our opinions expressed in paragraphs 6 and 7 are further
qualified as follows:
(a) in the case of instruments (as such term is defined in
Article 9 of the New York UCC), not constituting part of chattel
paper (as such term is defined in Article 9 of the New York UCC),
the security interests of the Collateral Agent under the Security
Agreement cannot be perfected by the filing of financing statements
but will be perfected if possession thereof is obtained or
maintained by the Collateral Agent in accordance with the provisions
of Article 9 of the New York UCC;
(b) we express no opinion as to any Loan Party's rights in or
title to the Pledged Stock or any Collateral;
(c) we express no opinion as to the validity or perfection of
any security interests in any item of collateral other than the
Pledged Stock existing on the date hereof and Specified Collateral,
in any item of Collateral which is expressly excluded from the
application of the New York UCC pursuant to Section 9-104 thereof,
in any item of Collateral which consists of fixtures (as defined in
Section 9-313 of the New York UCC) or in any item of Collateral
which is subject to (A) a statute or treaty of the United States
which provides for a national or international registration or a
national or international certificate of title for the perfection of
a security interest therein or which specifies a place of filing
different from that specified in the New York UCC for filing to
perfect such security interest or (B) a certificate of title
statute;
(d) we express no opinion as to the perfection of any security
interest in any proceeds;
(e) except as specifically set forth in paragraph 6, we
express no opinion as to the priority of any security interest
created under the Security Documents, and we express no opinion in
paragraph 6 as to the relative priority of the security interest in
the Pledged Stock as against (i) any claim or lien in favor of the
United States of America or any agency or instrumentality thereof
(including, without limitation, Federal tax liens and liens under
Title IV of the Employee Retirement Income Security Act of 1974, as
amended) or (ii) the claim of a lien creditor to the extent set
forth in Section 9-301 of the New York UCC;
(f) in the case of property which becomes Collateral after the
date hereof, Section 552 of Title 11 of the United States Code (the
"Bankruptcy Code") limits the extent to which property acquired by a
5
debtor after the commencement of a case under the Bankruptcy Code
may be subject to a security interest arising from a security
agreement entered into by the debtor before the commencement of such
case;
(g) we express no opinion as to the validity or enforceability
of any security interest in goods (as defined in the New York UCC)
which have been bought by a buyer in the ordinary course of business
(as defined in Section 1-201 of the New York UCC); and
(h) we express no opinion in paragraph 7 as to what law,
pursuant to Section 9-103 of the New York UCC, would govern
perfection of the security interests granted in the Collateral.
We express no opinion herein as to (i) the enforceability of
any provisions contained in the Loan Documents purporting to preserve a
debtor's liability for any deficiency after the sale of any collateral to
the extent such sales are not conducted in accordance with the applicable
provisions of the laws of the State of New York, (ii) Section 11.12(a) of
the Credit Agreement and Section 18(a) of the Subsidiary Guarantee insofar
as such Sections relate to the subject matter jurisdiction of the United
States District Court for the Southern District of New York to adjudicate
any controversy related to the Credit Agreements and the Loan Documents,
(iii) the waiver of an inconvenient forum set forth in Section 11.12(b) of
the Credit Agreement and Section 18(b) of the Subsidiary Guarantee,
(iv) Section 11.7(b) of the Credit Agreement insofar as it relates to
setoffs in respect of participations purchased in Loans or (v) any
provision in any Loan Document insofar as it provides a right of setoff in
respect of claims, credits or other obligations that are contingent or a
right of setoff in respect of Obligations against deposits, indebtedness
or other obligations of any entity other than the entity to which such
Obligations are payable.
We understand that you are satisfying yourselves as to the
status under Section 548 of the Bankruptcy Code and applicable state
fraudulent conveyance laws of the obligations of the Loan Parties, and the
security interests of the Collateral Agent and the Lenders, under the Loan
Documents, and we express no opinion thereon.
We understand that you are satisfying yourselves as to the
creation, perfection and priority of the security interests created under
each of the Mortgages in the Mortgaged Properties and (to the extent that
they do not purport to be governed by New York law) the enforceability of
such Mortgages and, to the extent that this opinion addresses Loan
Documents generally, we express no opinion with respect to the Mortgages
with respect to such matters.
Our opinion in paragraph 4 as to certain consents,
authorizations, filings or any other acts, our opinion in paragraph 2 as
to compliance with certain Requirements of Law and our opinion in
paragraph 6 as to the priority of the security interests referred to
therein are based upon (i) those consents, authorizations, filings and
other acts and (ii) a review of the UCC and of those laws, statutes, rules
and regulations which, in our experience, are normally applicable to
transactions of the type contemplated by the Loan Documents.
In connection with this opinion, including our opinion
contained in paragraph 2 as to there being no violation of certain
6
Contractual Obligations, we are not expressing any opinion as to whether
Holdings or Essex has, as a factual matter, complied with or satisfied any
applicable financial tests or ratios and have relied, without any
independent verification, on the certificates of ▇▇▇▇▇ ▇. ▇▇▇▇, the Chief
Financial Officer of Essex, as to such matters.
We are admitted to practice only in the State of New York, and
we express no opinion as to matters governed by any laws other than the
laws of the State of New York, the General Corporation Law of the State of
Delaware and the Federal law of the United States of America. Our opinion
set forth in paragraph 6 hereof is limited to Article 8 of the New York
UCC, and our opinion set forth in paragraph 7 hereof is limited to
Article 9 of the New York UCC.
This opinion is rendered only to the Administrative Agent and
the Lenders and their permitted transferees under the Credit Agreement and
is solely for their benefit in connection with the above transactions.
This opinion may not be relied upon by any other person or for any other
purpose or used, circulated, quoted or otherwise referred to for any other
purpose.
Very truly yours,
/s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
The Lenders Party to the
Credit Agreement
referred to above
The Chase Manhattan Bank, as Administrative Agent
In care of Chase Securities, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
47NS
O
SCHEDULE I
Indenture dated as of May 7, 1993, between Essex Group, Inc.,
and NBD Bank, National Association, as Trustee.
Senior Unsecured Note Agreement dated as of April 12, 1995,
among BCP/Essex Holdings Inc., Essex Group, Inc., the lenders party
thereto and Chemical Bank, as administrative agent.
Officer's Certificate
10% Senior Notes Due 2003
----------------------
The undersigned is the Chief Financial Officer of Essex Group, Inc.
("Essex"), a Michigan corporation and a wholly owned subsidiary of
BCP/Essex Holdings Inc. ("Holdings"). The undersigned is familiar with
the terms and provisions of each of (i) the Indenture dated as of May 7,
1993 (the "Indenture"), between Essex and NBD Bank, National Association,
in respect of the 10% Senior Notes Due 2003, (ii) the Senior Unsecured
Note Agreement dated as of April 12, 1995 (the "Note Agreement"), among
Holdings, Essex, the Lenders named therein and Chemical Bank, as
administrative agent, (iii) the Agreement and Lease dated as of April 12,
1995 (the "Lease"), between Mellon Financial Services Corporation #3 and
Essex, and (iv) the Credit Agreement dated as of October 31, 1996 (the
"Credit Agreement"), among Holdings, Essex, the Lenders named therein and
The Chase Manhattan Bank, as administrative agent. In connection with the
foregoing, the undersigned hereby certifies that:
1. To the best of my knowledge, no violation of the terms and
provisions of or obligations under the Indenture has or will occur as a
result of the execution of the Note Agreement, the Lease or the Credit
agreement, and no violation of such terms and provisions or obligations
has or will result from the consummation of the transactions contemplated
thereby.
2. Specifically, and in connection with Section 4.04(a) of the
Indenture, the Consolidated EBITDA Coverage Ratio (as defined in the
Indenture), after giving effect to the incurrence of all Debt to be
incurred under the Note Agreement, the Lease and the Credit Agreement, and
the receipt and application of the proceeds thereof, would be greater than
2.0 to 1 (the calculation of which is set forth on Exhibit A hereto).
3. Specifically, and in connection with Section 4.04(b)(iv) of
the Indenture, the obligations of Essex under the Lease are "Capital Lease
Obligations" under, and as defined in, the Indenture and do not exceed in
the aggregate, together with any other "Capital Lease Obligations" and
guarantees of joint venture obligations thereof, $25,000,000.
4. The calculation attached hereto is true and correct and hs
been made on good faith assumptions and has been calculated in accordance
with the terms and provisions of the Indenture.
______________________________
▇▇▇▇▇ ▇. ▇▇▇▇
Dated: October 31, 1996
Essex Group, Inc. Exhibit A
Consolidated EBITDA Coverage Ratio
As defined in the Sr. Note re Section 4.04(a). Calculated on a Proforma
basis as of June 30, 1996.
Events affecting the Proforma calculation include the following:
(1) Issuance of Debt by Essex International, Inc., beginning May,
1996
(2) Asset Acquisition of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, October, 1995
(3) Asset Acquisition of ▇▇▇▇ ▇▇▇▇▇▇▇▇, March, 1996
(4) Asset Acquisition of Triangle Wire & Cable, October, 1996
Impact of the above:
(a) Increased interest expense from debt related to each.
Included in Proforma interest expense as if incurred at
beginning of period.
(b) EBITDA is to be increased by earnings of each acquisition for
the period. This is assumed to be zero.
Consolidated Adjusted Net Income ($million)
Actual 40.1
Proforma interest (7.1)
-----
Proforma Income 33.0 33.0
+ Consolidated Interest Expense
Actual 38.7
Proforma interest 7.1
----
Total Interest 45.8 45.8
+ Income Taxes 20.2
+ Depreciation (excluding purchase actg.) 17.7
+ Amortization 2.3
+ Other Non-Cash Charges 2.7
----
Defined EBITDA 121.7
Proforma Interest Expense 45.8
Consolidated EBITDA Coverage Ratio 2.66
EXHIBIT G-2
ESSEX GROUP, INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
October 31, 1996
Dear Sirs:
I have acted as counsel to Essex Group, Inc., a Michigan
corporation ("Essex"), BCP/Essex Holdings Inc., a Delaware corporation
("Holdings"), and the subsidiaries of Essex set forth in Schedule II (the
"Subsidiaries") in connection with the preparation, execution and delivery
of the Credit Agreement dated as of October 31, 1996 (the "Credit
Agreement"), among Holdings, Essex, the lenders party thereto (the
"Lenders") and The Chase Manhattan Bank, as Administrative Agent (in such
capacity, the "Administrative Agent").
This opinion is furnished to you pursuant to
Section 5.1(g)(ii) of the Credit Agreement. Unless otherwise defined
herein, terms defined in the Credit Agreement are used herein as therein
defined.
In connection with this opinion, I have examined (a) executed
copies of the Credit Agreement and each other Loan Document and (b) copies
of such corporate documents and records of the Essex Entities (as defined
below) and certificates of public officials and officers of the Essex
Entities and such other documents as I have deemed necessary or
appropriate for the purposes of this opinion. In my examination, I have
assumed the genuineness of all signatures, the due authorization,
execution and delivery of the Credit Agreement and the other Loan
Documents by the parties thereto (other than the Essex Entities), the
authenticity of all documents submitted to me as originals and the
conformity to authentic, original documents of all documents submitted to
me as certified, conformed or photostatic copies. As to any facts
material to this opinion set forth below which I did not independently
establish or verify, I have relied upon representations of officers or
representatives of the Essex Entities.
Based upon the foregoing, I am of the opinion that:
1. Holdings is a corporation incorporated under the laws of
the State of Delaware. Each of Essex and the Subsidiaries that are Loan
Parties (Essex, Holdings and such Subsidiaries constituting, collectively,
the "Essex Entities") (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (b) has
the corporate power and authority to own and operate its property and to
conduct the business in which it is currently engaged and in which it
proposes to be engaged after the Effective Date and (c) is duly qualified
as a foreign corporation and is in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified and/or in good standing, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
2. Each of the Essex Entities had, at the time they were
executed, the corporate power and authority, and the legal right, to make,
deliver and perform each of the Loan Documents to which it is a party.
2
Each of the Essex Entities has taken all necessary corporate action to
authorize the borrowings on the terms and conditions of the Credit
Agreement, to grant the Liens pursuant to the Security Documents to which
it is a party and to authorize the execution, delivery and performance of
the Loan Documents to which it is a party. Except as previously disclosed
to the Lenders and the Agent in the Credit Agreement, no consent or
authorization of, filing with or other act by or in respect of any
Governmental Authority or, to the best of my knowledge, any other Person
is required in connection with the execution, delivery or performance by
each of the Essex Entities, or the validity or enforceability, of any of
the Loan Documents to which such entity is a party, except for filings in
connection with the perfection of Liens created by the Security Documents
to which such entity is a party. Each of the Loan Documents to which any
of the Essex Entities is a party has been duly executed and delivered by
such entity.
3. The execution, delivery and performance of the Loan
Documents by each of the Essex Entities and the borrowings under the
Credit Agreement and the use of the proceeds thereof will not (a) violate
any Requirement of Law (excluding Regulations U, T, G and X of the Board
of Governors of the Federal Reserve System and excluding any Requirement
of Law other than under the laws of the United States, the State of
Indiana or the State of Michigan or the General Corporation Law of the
State of Delaware (the "GCL")), (b) to the best of my knowledge after due
inquiry, violate any order, writ, judgment, injunction, decree,
determination or award of any court or governmental instrumentality
presently in effect which affects or binds any of the Essex Entities or
any of their respective properties, (c) violate any Contractual Obligation
of any of the Essex Entities under any agreement listed on Schedule I
hereto or, to the best of my knowledge, any other Contractual Obligation
of any of the Essex Entities or (d) to my knowledge, result in, or
require, the creation or imposition of any Lien on any of the respective
properties or revenues pursuant to any Requirement of Law or Contractual
Obligation of any of the Essex Entities, except the Liens created pursuant
to the Security Documents.
4. To the best of my knowledge after due inquiry, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or threatened by or against any of the
Essex Entities or against any of their respective properties or revenues
(a) with respect to any Loan Document, the Loans or the use of the
proceeds thereof, any Letter of Credit or any Lien contemplated by the
Loan Documents or (b) which has a reasonable possibility of an adverse
determination and, if adversely determined, (i) would affect the legality,
validity or enforceability or any Loan Document or (ii) would have a
Material Adverse Effect.
5. Schedules II and III hereto set forth, as of the Effective
Date, with respect to each class of the Capital Stock of each of the Essex
Entities (a) the number of authorized, issued and outstanding shares of
such class and (b) the number of shares owned of record and beneficially
by each of Holdings and Essex. All the shares of such Capital Stock of
each of the Essex Entities described on such Schedule are validly issued,
fully paid and nonassessable. To the best of my knowledge, there are no
outstanding subscriptions, options, warrants, calls, rights (including
preemptive rights) or any other agreements or commitments of any nature
with respect to the Capital Stock of Holdings, Essex or any of the
Subsidiaries, except as set forth on Schedules III and IV hereto.
3
My opinion in paragraph 3 as to compliance with certain
Requirements of Law is based upon a review of those laws, statutes, rules
and regulations which, in my experience, are normally applicable to
transactions of the type contemplated by the Loan Documents.
In connection with this opinion, including my opinion
contained in paragraph 3 as to there being no violation of certain
Contractual Obligations, I am not expressing any opinion as to whether
▇▇▇▇▇ has as a factual matter satisfied or complied with any applicable
financial tests or ratios and have relied, without any independent
verifications, on the certificate of ▇▇▇▇▇ ▇. ▇▇▇▇, the Chief Financial
Officer of Essex, as to such matters.
I am admitted to practice in the State of Indiana. I express
no opinion as to matters governed by any laws other than the laws of the
State of Indiana, the laws of the State of Michigan, the Federal laws of
the United States of America and the GCL. I have assumed that, insofar as
the substantive laws of the State of Michigan and the GCL may be
applicable to any matters opined on herein, such laws are identical to the
substantive laws of the State of Indiana.
This opinion is rendered only to the Administrative Agent and
the Lenders and their permitted transferees and is solely for their
benefit in connection with the above transactions. This opinion may not
be relied upon by the Administrative Agent or the Lenders or their
permitted transferees for any other purpose or relied upon by any other
person, firm or corporation for any purpose without my prior written
consent.
Very truly yours,
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The Lenders Party to the
Credit Agreement
referred to above
The Chase Manhattan Bank, as Administrative Agent
In care of Chase Securities, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE I
Indenture dated as of May 7, 1993, between Essex Group, Inc.,
and NBD Bank, National Association, as Trustee.
Senior Unsecured Note Agreement dated as of April 12, 1995,
among BCP/Essex Holdings Inc., Essex Group, Inc., the lenders party
thereto and Chemical Bank, as administrative agent.
SCHEDULE II
[CAPTION]
Company Name Shares* Shareholder
(Domicile) Auth'd. Issued (# of Shares)
---------- ------- ------ -------------
BCP/Essex
Essex Group, Inc. (Michigan) Holdings Inc.
(Formerly UAE of Michigan, Inc.) 1,000 100 (100)
Essex Group, Inc.
Essex International, Inc. (Delaware) 100 100 (100)
Essex Group, Inc.
US Samica Corporation (Vermont) 66,666 43,200 (43,200)
Essex Group, Inc.
Diamond Wire & Cable Co. (Illinois) 250 25 (25)
Essex Group Export Inc. (U.S. Virgin Essex Group, Inc.
Islands) 1,000 1,000 (1,000)
Essex Group, Inc.
(42.656)
Interstate Industries Holdings Inc. CMP Group, Inc.
(Delaware) 2,000 53.32 (10.664)
Interstate Industries
Interstate Industries, Inc. Holdings Inc.
(Mississippi) 500 100 (100)
*All shares are Common Stock
SCHEDULE III
The authorized Capital Stock of Holdings consists of
150,000,000 shares of Common Stock, divided into Class A Common Stock
($.01 par value) and Class B Common Stock ($.01 par value).
There are outstanding as of the date of the attached opinion
47,237,698 shares of Class A Common Stock.
There are outstanding as of the date of the attached opinion
warrants to purchase 5,666,738 shares of Common Stock of Holdings and
options to purchase 5,570,950 shares of Common Stock of Holdings.
Capitalized terms used herein have the meanings assigned
thereto in the attached opinion or the Credit Agreement (as defined in
such opinion).
SCHEDULE IV
Set forth below are agreements (as amended from time to time)
known to us on the date of the attached opinion providing for
subscriptions, options, warrants, calls, rights (including preemptive
rights) or any other agreement or commitments of any nature with respect
to the Capital Stock of BCP/Essex Holdings Inc. (Capitalized terms used
herein but not defined herein shall have the meanings assigned thereto in
the attached opinion or in the Credit Agreement (as defined in such
opinion).):
Amended and Restated Stock Option Agreement.
Amended and Restated Stock Option Plan.
BCP Stock Subscription Agreement dated as of October 9, 1992,
between Bessemer Capital and BCP/Essex Holdings Inc. (formerly
Acquisition Corporation).
Investors Shareholders Agreement dated as of October 9, 1992, among
BCP/Essex Holdings Inc. (formerly Acquisition Corporation), Bessemer
Holdings, L.P., DLJ, Goldman and Chase Equity Associates ("CEA").
Irrevocable Proxies dated as of October 9, 1992, granted to Bessemer
Capital by each Management Investor.
Management Option Continuation Agreements dated as of October 9,
1992, between BCP/Essex Holdings Inc. (formerly Acquisition
Corporation) and the Management Optionholders.
Management Stock Subscription Agreements dated as of October 9,
1992, between BCP/Essex Holdings Inc. (formerly Acquisition
Corporation) and each individual Management Investor.
Management Stockholders and Registration Rights Agreement dated as
of October 9, 1992, among BCP/Essex Holdings Inc. (formerly
Acquisition Corporation), Bessemer Holdings, L.P. and each of the
Management Investors.
Registration Rights Agreement dated as of October 9, 1992, among
BCP/Essex Holdings Inc. (formerly Acquisition Corporation), DLJ,
Goldman and CEA.
Stock and Warrant Subscription Agreement dated as of October 9,
1992, among Acquisition Corporation, DLJ, Goldman and CEA.
Stock Option Agreements.
The Certificate of Incorporation of Holdings, including the
Certificates of Designation relating to the Series A Cumulative
Redeemable Exchangeable Preferred Stock of Holdings.
Warrant Agreement dated as of October 9, 1992, among BCP/Essex
Holdings Inc. (formerly Acquisition Corporation), DLJ and Goldman.
EXHIBIT G-3
FORM OF OPINION OF LOCAL COUNSEL1/
October 31, 1996
The Lenders Parties to the
Credit Agreement
referred to below
The Chase Manhattan Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have acted as special local counsel in the state of
________________ (the "State") to Chemical Bank, as Administrative Agent
for the Lenders referred to below, in connection with the preparation,
execution and delivery of the Credit Agreement, dated as of April __, 1995
(the "Credit Agreement"), among BCP/Essex Holdings Inc., a Delaware
corporation ("Holdings"), Essex Group, Inc., a Michigan corporation (the
"Company"), the lenders parties thereto (the "Lenders") and Chemical Bank,
as agent (in such capacity, the "Administrative Agent"), and the other
Loan Documents referred to in the Credit Agreement.
This opinion is furnished to you pursuant to Section 5.1(f)(iii) of
the Credit Agreement. Unless otherwise defined herein, terms defined in
the Credit Agreement are used herein as therein defined.
In connection with this opinion, we have examined execution copies
of (i) the Credit Agreement and (ii) each of the Security Documents listed
on Annex I hereto (the "State Security Documents;" together with the
Credit Agreement, the "Loan Documents"). We have also examined originals,
or copies certified or otherwise identified to our satisfaction, of such
corporate records, certificates of public officials, certificates of
officers of the Loan Parties, and such other documents as we have deemed
necessary or appropriate for the purpose of this opinion. For the
purposes of this opinion, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals
and the conformity to original documents of documents submitted to us as
certified or photostatic copies.
_______________
1/ This Form of opinion contains only basic provisions and is subject
to further comment by each Local Counsel. Certain assumptions and
exceptions particular to the laws of each local jurisdiction will be
included in the actual opinions delivered.
2
You have advised us that in rendering this opinion, we may assume
that (i) the actions of the parties to this transaction are permitted
under their respective charter documents; (ii) each of the Loan Documents
was duly authorized, executed and delivered by the respective parties
thereto in the form of the execution copies reviewed by us and (iii) each
of the Loan Documents was negotiated by the various parties thereto
principally in the State of New York and such documents were executed and
delivered in New York, where the closing and the funding are to take
place.
Based on the foregoing, we are of the opinion that:
1. Neither the execution and delivery by any Loan Party of the
Loan Documents to which it is a party nor the performance by such Loan
Party of any of its obligations thereunder does or will violate any
applicable Requirement of Law of the State.
2. No license, notice, authorization, consent, exemption,
franchise or other approval of, permit or action by, or registration,
declaration of filing with any Governmental Authority of the State or any
political subdivision thereof is required on the part of any Loan Party in
connection with its execution and delivery of, and the performance of its
obligations under, any of the Loan Documents or the grant of the liens and
security interests created by the State Security Documents, or for the
exercise by the Administrative Agent of its rights and remedies
thereunder, except for (i) the filing of the financing statements referred
to in paragraph 3 below and (ii) the recordation of the Mortgages referred
to in paragraph 5 hereof. The execution, delivery and performance by each
Loan Party of the Loan Documents to which it is a party will not violate
any Requirement of Law of the State or any political subdivision thereof.
3. Insofar as the laws of the State are concerned, the provisions
of each Security Agreement listed on Annex I hereto are effective to
create in favor of the Administrative Agent a legal, valid and enforceable
security interest in the Collateral described therein, and when UCC-1
financing statements for each Loan Party to any such Security Agreement in
the form attached hereto as Annex II have been filed with the office of
the Secretary of State of the State [and with the [Appropriate Local
Office]] (the "Filing Offices"), the Administrative Agent shall have a
fully perfected security interest in all right, title and interest of the
Loan Parties in the State Collateral (as defined below) under the Uniform
Commercial Code of the State (the "UCC"), as security for the payment of
the Obligations. As used in this paragraph, "State Collateral" means all
equipment and inventory (as each such term is defined in the UCC) located
in the State, all accounts, chattel paper and general intangibles (as each
such term is defined in the UCC) of each Loan Party located in the State
(within the meaning of Section 9-103 of the UCC) and all other Collateral
as to which filing UCC-1 financing statements in the Filing Offices is an
appropriate method of perfection.
4. Section 9-103 of the UCC provides that the laws (including the
conflict of laws rules) of the jurisdiction of the chief executive office
or place of business of a debtor governs the perfection, and the effect of
perfection or non-perfection, of a security interest in the accounts,
general intangibles, and mobile goods, and of a non-possessory security
interest in chattel paper, of such debtor (each as defined in the UCC).
5. Each Mortgage listed on Annex I hereto (a) is in proper form
for execution and recording in the office referred to on Annex I with
3
respect so such Mortgage (the "Recorder's Office"), (b) constitutes a
valid mortgage [deed of trust] enforceable in accordance with its terms
under all applicable laws in effect in the State, (c) is effective to
create a legal, valid and enforceable lien on all right, title and
interest of the Loan Party thereto in the Mortgaged Property referred to
herein as security for the payment of the Obligations, enforceable as such
against such Loan Party and (d) when filed for recording in the Recorder's
Office, will constitute a fully perfected lien on such Mortgaged Property.
6. The courts of the State will enforce those provisions in the
Loan Documents which stipulate that the validity, construction and
enforceability of such agreement will be governed by the laws of the State
of New York, except to the extent that the laws of the State shall govern
the perfection and effect of perfection of the security interests created
thereunder and the enforceability of the security interest in the
collateral located in the State.
7. Neither the Administrative Agent nor any of the Lenders will
become subject to any income, franchise, or other tax imposed by a
Government Authority of the State solely by reason of the transactions
contemplated by the Loan Documents.
Very truly yours,
_______________________________
EXHIBIT H
FORM OF CLOSING CERTIFICATE
Pursuant to Section 5.1(d) of the Credit Agreement, dated as
of October 31, 1996 (the "Credit Agreement"; terms defined therein being
used herein as therein defined unless otherwise defined herein) among
BCP/ESSEX HOLDINGS INC., ESSEX GROUP, INC., the lenders parties thereto
(the "Lenders") and THE CHASE MANHATTAN BANK, as administrative agent for
the Lenders, the undersigned [Vice] President of [Name of Loan Party] (the
"Certifying Loan Party") hereby certifies as follows:
1. The representations and warranties of the Certifying
Loan Party contained in each Loan Document to which it is a party or
in any certificate, document or financial or other statement
furnished by or on behalf of the Certifying Loan Party pursuant to
or in connection with any Loan Document are true and correct in all
material respects on and as of the date hereof with the same effect
as if made on the date hereof except for representations and
warranties stated to relate to a specific earlier date, in which
case such representations and warranties were true and correct in
all material respects as of such earlier date;
2. No Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect to any
extensions of credit to be made on the date hereof;
[3. Attached hereto as Exhibit A are true and correct copies
of all consents, authorizations and filings (other than filings of
the type referred to in Section 5.1(m) of the Credit Agreement)
required to be obtained from or made with any Governmental Authority
or any other Person in connection with the execution, delivery,
performance, validity or enforceability of the Credit Agreement, and
such consents, authorizations and filings are in full force and
effect;1/]
4. ____________________ is and at all times since
______________ 19__, has been the duly elected and qualified
[Assistant] Secretary of the Certifying Loan Party and the signature
set forth on the signature line for such officer below is such
officer's true and genuine signature;
and the undersigned [Assistant] Secretary of the Certifying Loan Party
hereby certifies as follows:
5. There are no liquidation or dissolution proceedings
pending or to my knowledge threatened against the Certifying Loan
Party, nor has any other event occurred affecting or to my knowledge
threatening the corporate existence of the Certifying Loan Party;
_______________
1/ Insert in Closing Certificate of the Company only.
2
6. The Certifying Loan Party is a corporation duly
incorporated, validly existing and in good standing under the laws
of the State of _______________;
7. Attached hereto as Exhibit [A] [B] is a complete and
correct copy of resolutions duly adopted by the Board of Directors
of the Certifying Loan Party on _________, 19__; such resolutions
have not in any way been amended, modified, revoked or rescinded and
have been in full force and effect since their adoption to and
including the date hereof and are now in full force and effect; such
resolutions are the only corporate proceedings of the Certifying
Loan Party now in force relating to or affecting the matters
referred to therein;
8. Attached hereto as Exhibit [B] [C] is a complete and
correct copy of the by-laws of the Certifying Loan Party as in
effect at all times since _________________, 19__ to and including
the date hereof; and attached hereto as Exhibit [C] [D] is a true
and complete copy of the certificate of incorporation of the
Certifying Loan Party as in effect at all times since
___________________, 19__ to and including the date hereof;
9. The following persons are now duly elected and qualified
officers of the Certifying Loan Party holding the offices indicated
next to their respective names below, and such officers have held
such offices with the Certifying Loan Party at all times since
________________, 19__ to and including the date hereof, and the
signatures appearing opposite their respective names below are the
true and genuine signatures of such officers, and each of such
officers is duly authorized to execute and deliver on behalf of the
Certifying Loan Party any Loan Document to which it is a party and
any certificate or other document to be delivered by the Certifying
Loan Party pursuant to any Loan Document:
Name Office Signature
__________________ [Vice] President ________________________
__________________ [AssistantSecretary _____________________
IN WITNESS WHEREOF, the undersigned have hereto set our names.
________________________ _____________________________
Title: [Vice] President Title: [Assistant] Secretary
Date: October 31, 1996
EXHIBIT I
[FORM OF ASSIGNMENT AND ACCEPTANCE]
Reference is made to the Credit Agreement, dated as of
October 31, 1996, as amended, supplemented or otherwise modified from time
to time (the "Credit Agreement"), among Essex Group, Inc., BCP/Essex
Holdings Inc., the Lenders named therein and The Chase Manhattan Bank, as
Administrative Agent. Terms defined in the Credit Agreement are used
herein with the same meanings. This Assignment and Acceptance, between
the Assignor (as set forth on Schedule 1 hereto and made a part hereof)
and the Assignee (as set forth on Schedule 1 hereto and made a part
hereof) is dated as of the Effective Date (as set forth on Schedule 1
hereto and made a part hereof, the "Effective Date").
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby
irrevocably purchases and assumes from the Assignor without recourse to
the Assignor, as of the Effective Date, an interest (the "Assigned
Interest") as specified on Schedule 1 hereto, in and to the Assignor's
rights and obligations under the Credit Agreement respecting those credit
facilities contained in the Credit Agreement as are set forth on Schedule
1 (the "Assigned Facilities"), in a principal amount for each Assigned
Facility as set forth on Schedule 1 provided, however, it is expressly
understood and agreed that (i) the Assignor is not assigning to the
Assignee and the Assignor shall retain (A) all of the Assignor's rights
under Section 2.16 of the Credit Agreement with respect to any cost,
reduction or payment incurred or made prior to the Effective Date,
including, without limitation the rights to indemnification and to
reimbursement for taxes, costs and expenses and (B) any and all amounts
paid to the Assignor prior to the Effective Date and (ii) both Assignor
and Assignee shall be entitled to the benefits of Section 11.5 of the
Credit Agreement.
2. The Assignor (i) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement, any
other Loan Document or any other instrument or document furnished pursuant
thereto or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other Loan Document or
any other instrument or document furnished pursuant thereto; and (ii)
makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Company, any of its Subsidiaries
or any other Loan Party or the performance or observance by the Company,
any of its Subsidiaries or any other Loan Party of any of their respective
obligations under the Credit Agreement or any other Loan Document or any
other instrument or document furnished pursuant thereto;
3. The Assignee (i) represents and warrants that it is
legally authorized to enter into this Assignment and Acceptance; (ii)
confirms that it has received a copy of the Credit Agreement, together
with copies of the financial statements delivered pursuant to Section 4.1
thereof and other such documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (iii) agrees that it will, independently
and without reliance upon the Assignor, the Administrative Agent or any
other Person which has become a Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
2
own credit decisions in taking or not taking action under the Credit
Agreement and each other Loan Document; (iv) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Credit Agreement or any
other Loan Document as are delegated to the Administrative Agent by the
terms thereof, together with such powers and discretion as are incidental
thereto; and (v) agrees that it will be bound by the provisions of the
Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender including, if it is organized under the laws
of a jurisdiction outside the United States, its obligation pursuant to
Section 2.16(b) of the Credit Agreement to deliver on or prior to the date
of this Assignment and Acceptance and thereafter as specified in said
Section 2.16, the forms prescribed by the Internal Revenue Service of the
United States certifying the Assignee's complete exemption from United
States federal withholding taxes with respect to all payments to be made
to the Assignee under the Credit Agreement, or where, because of a Tax Law
Change, the Assignee is no longer entitled to a complete exemption from
United States federal withholding tax on such payments to it but is
entitled to a reduced rate of taxation with respect to such payments, the
Assignee shall deliver such other documents as are necessary to indicate
that all such payments are subject to such reduced rate of taxation.
4. Following the execution of this Assignment and
Acceptance, it will be delivered to the Administrative Agent for
acceptance by it and recording by the Administrative Agent pursuant to
Section 11.6(d) of the Credit Agreement, effective as of the Effective
Date (which shall not be earlier than five Business Days after the date of
acceptance and recording by the Administrative Agent of the executed
Assignment and Acceptance).
5. Upon such acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments in
respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee whether such amounts
have accrued prior to the Effective Date or accrue subsequent to the
Effective Date. The Assignor and the Assignee shall make all appropriate
adjustments in payments by the Administrative Agent for periods prior to
the Effective Date or with respect to the making of this assignment
directly between themselves.
6. From and after the Effective Date, (i) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and under the other Loan Documents and shall be bound by
the provisions thereof and (ii) the Assignor shall, to the extent provided
in this Assignment and Acceptance, relinquish its rights and be released
from its obligations under the Credit Agreement.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective duly
authorized officers on Schedule 1 hereto.
1
Schedule 1 to Assignment and Acceptance Respecting
Credit Agreement, dated as of October 31, 1996, among Essex Group, Inc.,
BCP/Essex Holdings Inc., the Lenders named therein and The Chase Manhattan
Bank as Administrative Agent
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
[CAPTION]
Revolving Credit Commitment Percentage Assigned
(to at least fifteen decimals)
(shown as a percentage of aggregate principal
Principal Amount Assigned Commitment Percentages of all Lenders
ASSIGNEE ASSIGNOR
By:____________________ By:_____________________
Name: Name:
Title: Title:
Accepted for Recordation Consented To:
in the Register:
THE CHASE MANHATTAN BANK, ESSEX GROUP, INC.
as Administrative Agent
By:_____________________
Name:
Title:
By:____________________ THE CHASE MANHATTAN BANK,
Name: as Administrative Agent
Title:
By:______________________
Name:
Title:
COMERICA BANK, as Issuing
Lender
By:______________________
Name:
Title:
/TABLE
[Indiana]
MORTGAGE
THIS MORTGAGE, dated as of October 31, 1996 is made by ESSEX
GROUP, INC., a Michigan corporation ("Mortgagor"), whose address is ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, to THE CHASE MANHATTAN BANK, a New
York banking corporation, as administrative agent for itself and the other
Lenders (as defined below) (in such capacity, "Mortgagee"), whose address
is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. References to this
"Mortgage" shall mean this instrument and any and all renewals,
modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements of this instrument.
Background
A. BCP/Essex Holdings, Inc., Mortgagor, the banks and other
financial institutions parties thereto and Chemical Bank (as predecessor-
in-interest to Mortgagee), as agent, are parties to the Credit Agreement,
dated as of April 12, 1995 (as amended through the date hereof, the
"Existing Credit Agreement"). BCP/Essex Holdings, Inc. and ▇▇▇▇▇▇▇▇▇ have
requested that the Existing Credit Agreement be terminated on the
Effective Date.
B. Mortgagor has requested that (i) the Lenders make
revolving credit loans (the "Loans") to Mortgagor in an aggregate
principal amount not to exceed $ , the proceeds of which shall be
used (a) to refund loans outstanding under the Existing Credit Agreement
on the Effective Date, (b) to finance the working capital requirements of
Mortgagor and its Subsidiaries, (c) to finance the acquisition and
assumption of substantially all of the assets and certain related
liabilities of certain businesses of Triangle Wire & Cable, Inc. and
related costs and expenses, (d) to pay reasonable fees and expenses in
connection with the transactions contemplated hereby and (e) for general
corporate purposes, and (ii) the Issuing Lender issue Letters of Credit
for the account of Mortgagor in an aggregate amount not to exceed
$25,000,000 at any time outstanding.
C. BCP/Essex Holdings Inc., Mortgagor, the several banks
and financial institutions from time to time parties thereto (the
"Lenders") and Mortgagee have entered into that certain Credit Agreement
dated as of the date hereof (as the same may be amended, supplemented,
modified, extended, restated or replaced from time to time, the "Credit
Agreement"). Capitalized terms used herein but not defined herein shall
have the respective meanings assigned to such terms in the Credit
Agreement. References in this Mortgage to the "Default Rate" shall mean
the interest rate provided for in Section 2.11(d) of the Credit Agreement.
▇. ▇▇▇▇▇▇▇▇▇ is the owner of the parcel(s) of real property
described on Schedule A attached (such real property, together with all of
the buildings, improvements, structures and fixtures now or subsequently
located thereon (the "Improvements"), being collectively referred to as
the "Real Estate").
▇. ▇▇▇▇▇▇▇▇ to the terms of the Credit Agreement, the
Lenders have agreed to make the Loans and the Issuing ▇▇▇▇▇▇ has agreed to
2
issue Letters of Credit, on the condition, among others, that the Loans,
all amounts due in connection with the Letters of Credit and all other
obligations of Mortgagor to Mortgagee and the Lenders under the Credit
Agreement and the other Loan Documents (as defined below) be secured by a
mortgage lien upon, and a security interest in, the Mortgaged Property (as
defined below). The Loans mature on or before the Revolving Credit
Termination Date. The Credit Agreement is hereby incorporated into and
made a part of this Mortgage.
F. In order to satisfy the condition referred to in the
immediately preceding recital, ▇▇▇▇▇▇▇▇▇ has agreed to execute and deliver
this Mortgage.
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, ▇▇▇▇▇▇▇▇▇ agrees that to
secure:
(a) (i) the repayment of the Loans, (ii) the payment of all
interest on, and fees payable in connection with, the Loans, (iii)
the payment of any and all reimbursement obligations in respect of,
and all other amounts due in connection with, the Letters of Credit
and/or the Applications, including, without limitation, all fees and
costs related thereto, (iv) payment of all commitment fees and other
amounts payable by Mortgagor pursuant to the terms of the Credit
Agreement and (v) all amounts payable by Mortgagor to the Lenders or
any affiliate thereof pursuant to the terms of any interest rate
swap agreements or other interest rate protection products entered
into by Mortgagor and the Lenders (the items set forth in clauses
(i) through and including (v) being referred to collectively as the
"Indebtedness");
(b) the performance of all covenants, agreements,
obligations and liabilities of Mortgagor (the "Obligations") under
or pursuant to the provisions of the Credit Agreement, the Letters
of Credit, the Applications, this Mortgage, any other document
securing payment of the Indebtedness (such other documents securing
payment of the Indebtedness together with this Mortgage,
collectively, the "Security Documents") and any amendments,
supplements, extensions, renewals, restatements, replacements or
modifications of any of the foregoing (the Credit Agreement, the
Letters of Credit, the Applications, the Security Documents and all
other documents and instruments from time to time evidencing,
securing or guaranteeing the payment of the Indebtedness or the
performance of the Obligations, as any of the same may be amended,
supplemented, extended, renewed, restated, replaced or modified from
time to time, are collectively referred to as the "Loan Documents");
and
(c) this Mortgage shall secure: (i) the maximum principal
amount, exclusive of any items described in (ii) below, of Six
Hundred Million Dollars ($600,000,000), including any additional
advances made from time to time after the date hereof pursuant to
this Mortgage or the Credit Agreement whether made as an obligation,
made at the option of the Mortgagee and/or the Lenders, made after a
reduction to a zero (0) or other balance, or made otherwise, (ii)
3
all other amounts payable by ▇▇▇▇▇▇▇▇▇, or advanced by Mortgagee
and/or the Lenders for the account, or on behalf, of Mortgagor,
pursuant to the Security Documents or the other Loan Documents,
including, without limitation, amounts advanced with respect to the
Mortgaged Property (as defined below) for the payment of taxes,
assessments and insurance premiums and costs incurred for the
protection of the Mortgaged Property to the same extent as if the
future obligations and advances were made on the date of execution
of this Mortgage; and (iii) future modifications, extensions, and
renewals of any Indebtedness or Obligations secured by this
Mortgage; pursuant to Indiana Code 32-8-11-9, the lien of this
Mortgage with respect to future advances, modifications, extensions,
and renewals referred to herein shall have the same priority to
which this Mortgage otherwise would be entitled as of the date this
Mortgage is executed and recorded without regard to the fact that
the future advance, modification, extension, or renewal may occur
after the Mortgage is executed and/or recorded;
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST
IN, AND HEREBY MORTGAGES, WARRANTS, GRANTS, ASSIGNS, TRANSFERS AND SETS
OVER TO MORTGAGEE:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever
of Mortgagor, in possession or expectancy, in and to the Real Estate
or any part thereof;
(C) all right, title and interest of Mortgagor in, to and
under all easements, rights of way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water courses, water and
riparian rights, development rights, air rights, mineral rights and
all estates, rights, titles, interests, privileges, licenses,
tenements, hereditaments and appurtenances belonging, relating or
appertaining to the Real Estate, and any reversions, remainders,
rents, issues, profits and revenue thereof and all land lying in the
bed of any street, road or avenue, in front of or adjoining the Real
Estate to the center line thereof;
(D) all of the fixtures, chattels, business machines,
machinery, apparatus, equipment, furnishings, fittings and articles
of personal property of every kind and nature whatsoever, and all
appurtenances and additions thereto and substitutions or
replacements thereof (together with, in each case, attachments,
components, parts and accessories) currently owned or subsequently
acquired by Mortgagor and now or subsequently attached to, or
contained in or used or usable in any way in connection with any
operation or letting of the Real Estate, including but without
limiting the generality of the foregoing, all screens, awnings,
shades, blinds, curtains, draperies, artwork, carpets, rugs, storm
doors and windows, furniture and furnishings, heating, electrical,
and mechanical equipment, lighting, switchboards, plumbing,
ventilating, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators,
loading and unloading equipment and systems, stoves, ranges, laundry
equipment, cleaning systems (including window cleaning apparatus),
telephones, communication systems (including satellite dishes and
4
antennae), televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security
systems, motors, engines, machinery, pipes, pumps, tanks, conduits,
appliances, fittings and fixtures of every kind and description (all
of the foregoing in this paragraph (D) being referred to as the
"Equipment");
(E) all right, title and interest of ▇▇▇▇▇▇▇▇▇ in and to all
substitutes and replacements of, and all additions and improvements
to, the Real Estate and the Equipment, subsequently acquired by or
released to Mortgagor or constructed, assembled or placed by
Mortgagor on the Real Estate, immediately upon such acquisition,
release, construction, assembling or placement, including, without
limitation, any and all building materials whether stored at the
Real Estate or offsite, and, in each such case, without any further
mortgage, conveyance, assignment or other act by Mortgagor;
(F) all right, title and interest of Mortgagor, as lessor,
in, to and under all leases, subleases, underlettings, concession
agreements, management agreements, licenses and other agreements
relating to the use or occupancy of the Real Estate or the Equipment
or any part thereof, now existing or subsequently entered into by
Mortgagor and whether written or oral and all guarantees of any of
the foregoing (collectively, as any of the foregoing may be amended,
restated, extended, renewed or modified from time to time, the
"Leases"), and all rights of Mortgagor in respect of cash and
securities deposited thereunder and the right to receive and collect
the revenues, income, rents, issues and profits thereof, together
with all other rents, royalties, issues, profits, revenue, income
and other benefits arising from the use and enjoyment of the
Mortgaged Property (as defined below) (collectively, the "Rents");
(G) all right, title and interest of ▇▇▇▇▇▇▇▇▇ in and to all
trade names, trade marks, logos, copyrights, good will and books and
records relating to or used in connection with the operation of the
Real Estate or the Equipment or any part thereof; all general
intangibles related to the operation of the Improvements now
existing or hereafter arising;
(H) all unearned premiums under insurance policies now or
subsequently obtained by Mortgagor relating to the Real Estate or
Equipment and ▇▇▇▇▇▇▇▇▇'s interest in and to all proceeds of any
such insurance policies (including title insurance policies)
including the right to collect and receive such proceeds, subject to
the provisions relating to insurance generally set forth below; and
all awards and other compensation, including the interest payable
thereon and the right to collect and receive the same, made to the
present or any subsequent owner of the Real Estate or Equipment for
the taking by eminent domain, condemnation or otherwise, of all or
any part of the Real Estate or any easement or other right therein;
(I) all right, title and interest of ▇▇▇▇▇▇▇▇▇ in and to (i)
all contracts from time to time executed by ▇▇▇▇▇▇▇▇▇ or any manager
or agent on its behalf relating to the ownership, construction,
maintenance, repair, operation, occupancy, sale or financing of the
Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate
5
or any property which is adjacent or peripheral to the Real Estate,
together with the right to exercise such options and all leases of
Equipment (collectively, the "Contracts"), (ii) all consents,
licenses, building permits, certificates of occupancy and other
governmental approvals relating to construction, completion,
occupancy, use or operation of the Real Estate or any part thereof
(collectively, the "Permits") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real
Estate (collectively, the "Plans");
(J) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by
Mortgagee as provided in this Mortgage; and
(K) all proceeds, both cash and noncash, of the foregoing
(except to the extent otherwise provided in the Credit Agreement);
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by ▇▇▇▇▇▇▇▇▇ and described in the
foregoing clauses (A) through (E) are collectively referred to as the
"Premises", and those described in the foregoing clauses (A) through (K)
are collectively referred to as the "Mortgaged Property").
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for
the uses and purposes set forth, until the Indebtedness is fully paid and
the Obligations fully performed.
Terms and Conditions
▇▇▇▇▇▇▇▇▇ further represents, warrants, covenants and agrees
with Mortgagee as follows:
1. Warranty of Title. ▇▇▇▇▇▇▇▇▇ warrants that Mortgagor has
good title to the Real Estate in fee simple and good title to the rest of
the Mortgaged Property, subject only to the matters that are set forth in
Schedule B of the title insurance policy or policies being issued to
Mortgagee to insure the lien of this Mortgage and the matters referred to
in Section 7.3 of the Credit Agreement (the "Permitted Exceptions") and
Mortgagor shall warrant, defend and preserve such title and the lien of
the Mortgage thereon against all claims of all persons and entities.
Mortgagor further warrants that it has the right to mortgage the Mortgaged
Property.
2. Payment of Indebtedness. Mortgagor shall pay the
Indebtedness at the times and places and in the manner specified in the
Credit Agreement and shall perform all the Obligations, without relief
from applicable valuation and appraisement laws.
3. Requirements.
(a) Mortgagor shall promptly comply with, or cause to be
complied with, and conform to all present and future laws, statutes,
codes, ordinances, orders, judgments, decrees, rules, regulations and
requirements, and irrespective of the nature of the work to be done, of
6
each of the United States of America, any State and any municipality,
local government or other political subdivision thereof and any agency,
department, bureau, board, commission or other instrumentality of any of
them, now existing or subsequently created (collectively, "Governmental
Authority") which has jurisdiction over the Mortgaged Property and all
covenants, restrictions and conditions now or later of record which may be
applicable to any of the Mortgaged Property, or to the use, manner of use,
occupancy, possession, operation, maintenance, alteration, repair or
reconstruction of any of the Mortgaged Property. All present and future
laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements of every Governmental Authority applicable to
Mortgagor or to any of the Mortgaged Property and all covenants,
restrictions, and conditions which now or later may be applicable to any
of the Mortgaged Property are collectively referred to as the "Legal
Requirements".
(b) From and after the date of this Mortgage, Mortgagor shall
not by act or omission permit any building or other improvement on any
premises not subject to the lien of this Mortgage to encroach upon or be
served by the Premises or any part thereof or any interest therein to
fulfill any Legal Requirement (except to the extent such encroachment or
service is pursuant to a Permitted Exception), and Mortgagor hereby
assigns to Mortgagee any and all rights to give consent for all or any
portion of the Premises or any interest therein to be so used. Mortgagor
shall not by act or omission impair the integrity of any of the Real
Estate as a single zoning lot separate and apart from all other premises.
Mortgagor represents that each parcel of the Real Estate constitutes a
legally subdivided lot, in compliance with all subdivision laws and
similar Legal Requirements. Any act or omission by Mortgagor which would
result in a violation of any of the provisions of this Section shall be
void.
4. Payment of Taxes and Other Impositions. 1. Mortgagor
shall pay and discharge, no later than the last day when same may be paid
without interest or penalty, all taxes of every kind and nature
(including, without limitation, all real and personal property, income,
franchise, withholding, transfer, gains, profits and gross receipts
taxes), all charges for any easement or agreement maintained for the
benefit of any of the Mortgaged Property, all general and special
assessments, levies, permits, inspection and license fees, all water and
sewer rents and charges and all other public charges even if unforeseen or
extraordinary, imposed upon or assessed against or which may become a lien
on any of the Mortgaged Property, or arising in respect of the occupancy,
use or possession thereof, together with any penalties or interest on any
of the foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Mortgagor shall, within 30 days of specific request of
Mortgagee (which shall not be made prior to the earlier of the last day
when the Imposition in question may be paid without interest or penalty or
the date such Imposition is actually paid), deliver to Mortgagee (i)
original or copies of receipted bills and canceled checks evidencing
payment of such Imposition if it is a real estate tax or other public
charge or (ii) evidence reasonably acceptable to Mortgagee showing the
payment of any other such Imposition. If by law any Imposition, at
▇▇▇▇▇▇▇▇▇'s option, may be paid in installments (whether or not interest
shall accrue on the unpaid balance of such Imposition), Mortgagor may
elect to pay such Imposition in such installments and shall be responsible
for the payment of such installments with interest, if any.
7
(b) Nothing herein shall affect any right or remedy of
Mortgagee under this Mortgage or otherwise, without notice or demand to
Mortgagor, to pay, if an Event of Default shall have occurred and be
continuing, any Imposition after the date such Imposition shall have
become due, and to add to the Indebtedness the amount so paid, together
with interest from the time of payment at the Default Rate. Any sums paid
by Mortgagee in discharge of any Impositions shall be (i) a lien on the
Premises secured hereby prior to any right or title to, interest in, or
claim upon the Premises subordinate to the lien of this Mortgage, and (ii)
payable on demand by ▇▇▇▇▇▇▇▇▇ to Mortgagee together with interest at the
Default Rate as set forth above.
(c) Mortgagor shall not claim, demand or be entitled to
receive any credit or credits toward the satisfaction of this Mortgage or
on any interest payable thereon for any taxes assessed against the
Mortgaged Property or any part thereof. Mortgagor shall not claim any
deduction from the taxable value of the Mortgaged Property by reason of
this Mortgage to the extent the same may or will result in any expense,
cost or loss to Mortgagee.
5. Insurance. (a) Mortgagor shall maintain or cause to be
maintained on all of the Premises insurance as required under Section 6.5
(Maintenance of Property; Insurance) of the Credit Agreement. Each
insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent
available) shall (i) provide (to the extent that such provisions are
generally commercially available from insurance companies having an A.M.
Best Company, Inc. rating of A or higher and a financial size category of
not less than XI) that it shall not be canceled, non-renewed or materially
amended without 30-days' prior written notice to Mortgagee, and (ii) with
respect to all property insurance, may provide for deductibles in
commercially reasonable amounts, and contain a "Replacement Cost
Endorsement" without any deduction made for depreciation and with no co-
insurance penalty (or attaching an agreed amount endorsement satisfactory
to Mortgagee), with loss payable solely to Mortgagee (except as otherwise
provided in Section 5(e) below) as Mortgagee's interest may appear, under
a "standard" or "New York" mortgagee clause acceptable to Mortgagee and be
written by insurance companies having an A.M. Best Company, Inc. rating of
A or higher and a financial size category of not less than XI, or
otherwise as approved by Mortgagee. Liability insurance policies shall
name Mortgagee as an additional insured. The amounts of each insurance
policy and the form of each such policy shall at all times be reasonably
satisfactory to Mortgagee. Each policy shall expressly provide that any
proceeds which are payable to Mortgagee (pursuant to the terms of Section
5(e) below) shall be paid by check payable to the order of Mortgagee only
and require the endorsement of Mortgagee only. If any required insurance
shall expire, be withdrawn, become void by breach of any condition thereof
by Mortgagor or by any lessee of any part of the Mortgaged Property or
become void or unsafe by reason of the failure or impairment of the
capital of any insurer, or if for any other reason whatsoever (sufficient
in Mortgagee's reasonable judgment) such insurance shall become
unsatisfactory to Mortgagee, Mortgagor shall promptly obtain new or
additional insurance satisfactory to Mortgagee (after notice from
Mortgagee in the case that ▇▇▇▇▇▇▇▇▇'s obligation so to obtain new or
additional insurance results solely from the fact that such insurance in
Mortgagee's reasonable judgment has become unsatisfactory to Mortgagee).
Mortgagor shall not take out any separate or additional insurance which is
8
contributing in the event of loss unless it is properly endorsed and
otherwise reasonably satisfactory to Mortgagee in all respects.
(b) Mortgagor shall deliver to Mortgagee a certificate or
certificates of the insurance required to be maintained hereunder
reasonably acceptable to Mortgagee. Mortgagor shall (i) pay all premiums
for insurance not later than the earlier of (A) 30 days after the
effective date or renewal date, as the case may be, of each insurance
policy or (B) 30 days after the date (not earlier than such effective or
renewal date, as the case may be) on which the bill for the premium for
such insurance is rendered by the insurer with respect thereto (but in any
event, not later than the last day before which the policy would be
terminated for failure to pay such premium) and (ii) not later than the
date of renewal of each policy to be furnished pursuant to the provisions
of this Section, deliver a renewed certificate of insurance with standard
non-contributory mortgage clauses in favor of and acceptable to Mortgagee.
Within 30 days of specific request of Mortgagee (which shall not be made
prior to the earlier of the date the payment is required to be made
hereunder or the date payment is actually made), Mortgagor shall deliver
to Mortgagee evidence of payment of the premium for such insurance
reasonably satisfactory to Mortgagee. In no event shall Mortgagor permit
the cancellation of the insurance coverage herein required due to non-
payment of premiums.
(c) If Mortgagor is in default beyond the applicable grace
period provided in the Credit Agreement of its obligations to insure or
deliver any such prepaid policy or policies, then Mortgagee, at its option
and without notice, may effect such insurance from year to year, and pay
the premium or premiums therefor, and Mortgagor shall pay to Mortgagee on
demand such premium or premiums so paid by Mortgagee with interest from
the time of payment at the Default Rate and the same shall be deemed to be
secured by this Mortgage and shall be collectible in the same manner as
the Indebtedness secured by this Mortgage.
(d) Mortgagor promptly shall comply with and conform to (i)
all provisions of each such insurance policy, and (ii) all requirements of
the insurers applicable to Mortgagor or to any of the Mortgaged Property
or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration or repair of any of the Mortgaged Property.
Mortgagor shall not use or permit the use of the Mortgaged Property in any
manner which would permit any insurer to cancel any fire or "all-risks"
insurance policy or void the coverage provided thereunder. Mortgagor
shall not use or permit the use of the Mortgaged Property in any manner
which would permit any insurer to cancel any other insurance policy or
void coverage provided thereunder unless Mortgagor promptly replaces such
policy or coverage, as the case may be, with a policy or coverage, as the
case may be, in conformity with the provisions hereof and in the Credit
Agreement pertaining to insurance.
(e) If the Mortgaged Property, or any part thereof, shall be
destroyed or damaged by fire or any other casualty, whether insured or
uninsured, or in the event any material claim is made against Mortgagor
for any personal injury, bodily injury or property damage incurred on or
about the Premises, Mortgagor shall give prompt notice thereof to
Mortgagee. If the Mortgaged Property is damaged by fire or other casualty
and the reasonably estimated cost to repair such damage is less than the
lesser of (i) 50% of the replacement cost of the Improvements at the
9
affected Real Estate site and (ii) $1,000,000, then provided that no Event
of Default shall have occurred and be continuing, Mortgagor shall have the
right to adjust such loss, and the insurance proceeds relating to such
loss shall be paid over to Mortgagor; provided that Mortgagor shall,
promptly after any such damage and adjustment of the insurance loss, if
any, repair all such damage regardless of whether any insurance proceeds
have been received or whether such proceeds, if received, are sufficient
to pay for the costs of repair. If the Mortgaged Property is damaged by
fire or other casualty and an Event of Default shall have occurred and be
continuing, then Mortgagor authorizes and empowers Mortgagee, at
Mortgagee's option and in Mortgagee's sole discretion, as attorney-in-fact
for ▇▇▇▇▇▇▇▇▇, to make proof of loss, to adjust and compromise any claim
under any insurance policy, to appear in and prosecute any action arising
from any policy, to collect and receive insurance proceeds and to deduct
therefrom Mortgagee's expenses incurred in the collection process. Each
insurance company concerned is hereby authorized and directed to make
payment for loss directly to Mortgagee if the Mortgaged Property is
damaged by fire or other casualty and the cost to repair such damage
exceeds the above limit or if an Event of Default shall have occurred and
is continuing. Unless such Mortgaged Property is described in Section
7.6(a) of the Credit Agreement, and except as otherwise provided in the
Credit Agreement, Mortgagee shall have the right to require Mortgagor to
repair or restore the Mortgaged Property, and, if an Event of Default
shall have occurred and be continuing, Mortgagor hereby designates
Mortgagee as its attorney-in-fact for the purpose of making any election
required or permitted under any insurance policy relating to repair or
restoration. The insurance proceeds or any part thereof received by
Mortgagee shall be applied by Mortgagee toward reimbursement of all costs
and expenses of Mortgagee in collecting such proceeds, and the balance,
(i) if an Event of Default shall have occurred and is continuing, at
Mortgagee's option in its sole and absolute discretion, to the principal
and interest due or to become due in respect of the Loans (in the manner
set forth for mandatory prepayments in Section 2.8(c) of the Credit
Agreement), to fulfill any other Obligation of Mortgagor, to the
restoration or repair of the property damaged, or released to Mortgagor or
(ii) if an Event of Default shall not have occurred and be continuing,
released to Mortgagor. In the event Mortgagee elects (or in accordance
with clause (ii) of the immediately preceding sentence, is obligated) to
release such proceeds to Mortgagor, Mortgagor shall be obligated to use
such proceeds to restore or repair the Mortgaged Property (except to the
extent otherwise provided in the Credit Agreement). Application by
Mortgagee of any insurance proceeds toward the last maturing installments
of principal and interest due or to become due under the Loans shall not
excuse Mortgagor from making any regularly scheduled payments due
thereunder, nor shall such application extend or reduce the amount of such
payments.
(f) In the event of foreclosure of this Mortgage or other
transfer of title to the Mortgaged Property in extinguishment of the
Indebtedness, all right, title and interest of Mortgagor in and to any
insurance policies then in force shall pass to the purchaser or grantee
and Mortgagor hereby appoints Mortgagee its attorney-in-fact, in
Mortgagor's name, to assign and transfer all such policies and proceeds to
such purchaser or grantee.
(g) Mortgagor may maintain insurance required under this
Mortgage by means of one or more blanket insurance policies maintained by
10
▇▇▇▇▇▇▇▇▇; provided, however, that (A) any such policy (to the extent
generally commercially available from insurance companies having an A.M.
Best Company, Inc. rating of A or higher and a financial size category of
not less than XI) shall specify, or Mortgagor shall furnish to Mortgagee a
written statement from the insurer so specifying, the maximum amount of
the total insurance afforded by such blanket policy that is allocated to
the Premises and the other Mortgaged Property and any sublimits in such
blanket policy applicable to the Premises and the other Mortgaged
Property, (B) each such blanket policy shall include an endorsement
providing that, in the event of a loss resulting from an insured peril,
property insurance coverage shall be allocated to the Mortgaged Property
in an amount equal to the replacement value of the Mortgaged Property and
liability insurance shall be allocated to the Mortgaged Property in an
amount equal to coverage required as provided above, and (C) the
protection afforded under any such blanket policy shall be no less than
that which would have been afforded under a separate policy or policies
relating only to the Mortgaged Property.
6. Restrictions on Liens and Encumbrances. Except as
permitted under Section 7.3 (Limitation on Liens) of the Credit Agreement,
except for the Liens of the Security Agreements and except for the lien of
this Mortgage and the Permitted Exceptions, Mortgagor shall not further
mortgage, nor otherwise encumber the Mortgaged Property nor create or
suffer to exist any lien, charge or encumbrance on the Mortgaged Property,
or any part thereof, whether superior or subordinate to the lien of this
Mortgage and whether recourse or non-recourse.
7. Due on Sale and Other Transfer Restrictions. Except as
permitted under Section 7.6 (Limitation on Sale of Assets) of the Credit
Agreement, Mortgagor shall not sell, transfer, convey or assign all or any
portion of, or any interest in, the Mortgaged Property.
8. Maintenance; No Alteration; Inspection; Utilities. (a)
Mortgagor shall maintain or cause to be maintained all the Improvements in
good condition and repair and shall not commit or suffer any waste of the
Improvements. Mortgagor shall repair, restore, replace or rebuild
promptly after adjustment of any applicable insurance claim of a loss any
part of the Premises which may be damaged or destroyed by any casualty
whatsoever except to the extent the same is no longer required for the
conduct of ▇▇▇▇▇▇▇▇▇'s business and Mortgagor has not received insurance
proceeds with respect thereto. The Improvements shall not be demolished
or materially altered without the prior written consent of Mortgagee;
provided, that Mortgagee shall not unreasonably withhold its consent to
any such alteration.
(b) Mortgagee and any persons authorized by Mortgagee shall
have the right to enter and inspect the Premises and the right to inspect
all work done, labor performed and materials furnished in and about the
Improvements and the right to inspect and make copies of all books,
contracts and records of Mortgagor relating to the Mortgaged Property.
(c) Mortgagor shall pay or cause to be paid when due all
utility charges which are incurred for gas, electricity, water or sewer
services furnished to the Premises and all other assessments or charges of
a similar nature, whether public or private, affecting the Premises or any
portion thereof, whether or not such assessments or charges are liens
thereon; provided, however, that such payment shall not be required with
11
respect to any such charge or assessment so long as (i) the validity or
amount of such charge or assessment shall be contested by Mortgagor in
good faith by proceedings that are, in Mortgagee's reasonable discretion,
appropriate, (ii) Mortgagor shall have given to Mortgagee prior notice of
such contest, (iii) Mortgagor shall have set aside on its books adequate
reserves as required by GAAP with respect thereto and (iv) Mortgagee shall
have determined, in its reasonable discretion, that (A) payment of the
Indebtedness and performance of the Obligations, (B) the liens and
security interests created hereby and (C) Mortgagee's rights and remedies
hereunder will not be impaired or endangered thereby in any material
respect.
9. Condemnation/Eminent Domain. Promptly after obtaining
knowledge of the institution of any proceedings for the condemnation of
the Mortgaged Property, or any portion thereof, Mortgagor will notify
Mortgagee of the pendency of such proceedings. After an Event of Default
shall have occurred and while such Event of Default is continuing,
▇▇▇▇▇▇▇▇▇ authorizes Mortgagee, at Mortgagee's option and in Mortgagee's
sole discretion, as attorney-in-fact for Mortgagor, to commence, appear in
and prosecute, in Mortgagee's or ▇▇▇▇▇▇▇▇▇'s name, any action or
proceeding relating to any condemnation of the Mortgaged Property, or any
portion thereof, and to settle or compromise any claim in connection with
such condemnation. If Mortgagee does not participate in such condemnation
proceeding, then Mortgagor shall, at its expense, diligently prosecute any
such proceeding and shall consult with Mortgagee, its attorneys and
experts and cooperate with them in any defense of any such proceedings.
All awards and proceeds of condemnation shall be assigned to Mortgagee to
be applied in the same manner as insurance proceeds, as provided above,
and ▇▇▇▇▇▇▇▇▇ agrees to execute any such assignments of all such awards as
Mortgagee may request.
10. Restoration. If Mortgagee elects (or, in accordance with
Section 5(e) above, is obligated) to release funds to Mortgagor for
restoration of any of the Real Estate, then such restoration shall be
performed only in accordance with the following conditions:
(i) prior to the commencement of any restoration, the plans and
specifications for such restoration, and the budgeted costs, shall
be submitted to and approved by Mortgagee in its reasonable
discretion;
(ii) prior to making any advance of restoration funds, Mortgagee
shall be satisfied that the remaining restoration funds are
sufficient to complete the restoration;
(iii) at the time of any disbursement of the restoration funds, (A)
no Event of Default shall then exist and (B) if the amount of such
disbursement is $1,000,000 or more, a satisfactory bring-down or
continuation of title insurance on the Premises shall be delivered
to Mortgagee;
(iv) disbursements shall be made from time to time in an amount not
exceeding the cost of the work completed since the last disbursement
(which costs shall include the cost of materials installed or
delivered to the site and architectural, engineering and other
similar professional fees incurred in connection with the
restoration), upon receipt of a satisfactory architect's certificate
12
certifying as to the stage of completion and of performance of the
work in a good and workmanlike manner and in accordance with the
contracts, plans and specifications acceptable to Mortgagee;
(v) the restoration funds shall bear no interest and may be
commingled with Mortgagee's other funds;
(vi) except to the extent otherwise provided in the Credit
Agreement, any restoration funds remaining after ▇▇▇▇▇▇▇▇▇ has been
reimbursed for the restoration costs it incurred which are
reimbursable hereunder shall be retained by ▇▇▇▇▇▇▇▇▇ and may be
applied by Mortgagee, in its sole discretion, to the Indebtedness in
the inverse order of maturity.
11. Leases. Except as permitted under Sections 7.3(n), 7.6
(Limitation of Sale of Assets) and 7.7 (Limitation on Leases) of the
Credit Agreement, Mortgagor shall not (i) execute an assignment or pledge
of any Lease relating to all or any portion of the Mortgaged Property
other than in favor of Mortgagee, or (ii) without the prior written
consent of Mortgagee, execute or permit to exist any Lease of any of the
Mortgaged Property.
12. Further Assurances. To further assure ▇▇▇▇▇▇▇▇▇'s rights
under this Mortgage, ▇▇▇▇▇▇▇▇▇ agrees upon demand of Mortgagee to do any
act or execute any additional documents (including, but not limited to,
security agreements on any personalty included or to be included in the
Mortgaged Property and a separate assignment of each Lease in recordable
form) as may be reasonably required by Mortgagee to confirm the lien of
this Mortgage and all other rights or benefits conferred on Mortgagee.
13. Mortgagee's Right to Perform. If Mortgagor fails to perform
any of the covenants or agreements of Mortgagor after an Event of Default
shall have occurred and be continuing, Mortgagee, without waiving or
releasing Mortgagor from any obligation or default under this Mortgage,
may, at any time (but shall be under no obligation to) pay or perform the
same, and the amount or cost thereof, with interest at the Default Rate,
shall immediately be due from Mortgagor to Mortgagee and the same shall be
secured by this Mortgage and shall be a lien on the Mortgaged Property
prior to any right, title to, interest in or claim upon the Mortgaged
Property attaching subsequent to the lien of this Mortgage. No payment or
advance of money by Mortgagee under this Section shall be deemed or
construed to cure Mortgagor's default or waive any right or remedy of
Mortgagee.
14. Events of Default. The occurrence of any one or more of the
following events shall constitute an event of default (an "Event of
Default") hereunder:
(a) if any of the Mortgaged Property (other than any Mortgaged
Property which is described in Section 7.6(a) of the Credit Agreement)
is materially damaged or destroyed by an uninsured casualty and
▇▇▇▇▇▇▇▇▇ does not promptly provide funds for the restoration of the
damage caused by such casualty; or
(b) if, except as permitted under Section 7.3 (Limitation on
Liens) of the Credit Agreement, except for the Liens of the Security
Agreements and except for the lien of this Mortgage and the Permitted
13
Exceptions, ▇▇▇▇▇▇▇▇▇ shall further mortgage, pledge or otherwise
encumber the Mortgaged Property or any part thereof or any interest
therein or create or suffer to exist any lien, charge or other
encumbrance on the Mortgaged Property or any part thereof, whether
superior or subordinate to the lien of this Mortgage, whether recourse
or non-recourse; or
(c) if, except as permitted under Section 7.6 (Limitation on Sale
of Assets) of the Credit Agreement, Mortgagor shall sell, transfer,
convey or assign the Mortgaged Property or any part thereof or any
interest therein (by operation of law or otherwise); or
(d) an "Event of Default", as defined in the Credit Agreement,
shall occur under the Credit Agreement.
15. Remedies. (a) Upon the occurrence of any Event of Default,
in addition to any other rights and remedies Mortgagee may have pursuant
to the Loan Documents, or as provided by law, and without limitation, (a)
if such event is an "Event of Default" specified in clause (i) or (ii) of
Section 8(f) of the Credit Agreement with respect to Mortgagor,
automatically the Indebtedness and all other amounts payable with respect
to the Loans, and payable under the Credit Agreement, this Mortgage and
the other Security Documents immediately shall become due and payable, and
(b) if such event is any other Event of Default, by notice to Mortgagor,
Mortgagee may declare the Indebtedness (together with accrued interest
thereon) and all other amounts payable with respect to the Loans, and
payable under the Credit Agreement, this Mortgage and the other Security
Documents to be immediately due and payable. Except as expressly provided
above in this Section, presentment, demand, protest and all other notices
of any kind are hereby expressly waived. In addition, upon the occurrence
of any Event of Default, Mortgagee may immediately take such action,
without notice or demand, as it deems advisable to protect and enforce its
rights against Mortgagor and in and to the Mortgaged Property, including,
but not limited to, the following actions, each of which may be pursued
concurrently or otherwise, at such time and in such manner as Mortgagee
may determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law, (A)
institute and maintain an action of mortgage foreclosure against all or
any part of the Mortgaged Property, (B) institute and maintain an action
with respect to the Loans under the Credit Agreement, (C) sell all or
part of the Mortgaged Property (Mortgagor expressly granting to
Mortgagee the power of sale), or (D) take such other action at law or in
equity for the enforcement of this Mortgage or any of the Loan Documents
as the law may allow. Mortgagee may proceed in any such action to final
judgment and execution thereon for all sums due hereunder, together with
interest thereon at the Default Rate and all costs of suit, including,
without limitation, reasonable attorneys' fees and disbursements.
Interest at the Default Rate shall be due on any judgment obtained by
Mortgagee from the date of judgment until actual payment is made of the
full amount of the judgment.
(ii) Mortgagee may, to the extent permitted by applicable law,
personally, or by its agents, attorneys and employees and without regard
to the adequacy or inadequacy of the Mortgaged Property or any other
collateral as security for the Indebtedness and Obligations enter into
14
and upon the Mortgaged Property and each and every part thereof and
exclude Mortgagor and its agents and employees therefrom without
liability for trespass, damage or otherwise (Mortgagor hereby agreeing
to surrender possession of the Mortgaged Property to Mortgagee upon
demand at any such time) and use, operate, manage, maintain and control
the Mortgaged Property and every part thereof. Following such entry and
taking of possession, Mortgagee shall be entitled, without limitation,
(x) to lease all or any part or parts of the Mortgaged Property for such
periods of time and upon such conditions as Mortgagee may, in its
discretion, deem proper, (y) to enforce, cancel or modify any Lease and
(z) generally to execute, do and perform any other act, deed, matter or
thing concerning the Mortgaged Property as Mortgagee shall deem
appropriate as fully as Mortgagor might do.
(b) The holder of this Mortgage, in any action to foreclose it,
shall be entitled, to the extent permitted by applicable law, to the
appointment of a receiver. In case of a foreclosure sale, the Real Estate
may be sold, at Mortgagee's election, in one parcel or in more than one
parcel and Mortgagee is specifically empowered, (without being required to
do so, and in its sole and absolute discretion) to cause successive sales
of portions of the Mortgaged Property to be held.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Mortgage, and
notwithstanding to the contrary any exculpatory or non-recourse language
which may be contained herein, Mortgagee shall be entitled to enjoin such
breach and obtain specific performance of any covenant, agreement, term or
condition and Mortgagee shall have the right to invoke any equitable right
or remedy as though other remedies were not provided for in this Mortgage.
(d) To the extent applicable laws limit (i) the availability of
the exercise of any of the remedies set forth herein, including without
limitation the remedies involving a power of sale on the part of Mortgagee
and the right of Mortgagee to exercise self-help in connection with the
enforcement of the terms of this Mortgage, or (ii) the enforcement of
waivers and indemnities made by Mortgagor, such remedies, waivers, or
indemnities shall be exercisable or enforceable, any provisions in this
Mortgage to the contrary notwithstanding, if, and to the extent, permitted
by the laws in force at the time of the exercise of such remedies or the
enforcement of such waivers or indemnities without regard to the
enforceability of such remedies, waivers or indemnities at the time of the
execution and delivery of this Mortgage.
16. Right of Mortgagee to Credit Sale. Upon the occurrence of
any sale made under this Mortgage, whether made under the power of sale or
by virtue of judicial proceedings or of a judgment or decree of
foreclosure and sale, Mortgagee may bid for and acquire the Mortgaged
Property or any part thereof. In lieu of paying cash therefor, Mortgagee
may make settlement for the purchase price by crediting upon the
Indebtedness or other sums secured by this Mortgage the net sales price
after deducting therefrom the expenses of sale and the cost of the action
and any other sums which Mortgagee is authorized to deduct under this
Mortgage. In such event, this Mortgage and any documents evidencing the
Loans or any expenditures secured hereby may be presented to the person or
persons conducting the sale in order that the amount so used or applied
may be credited upon the Indebtedness as having been paid.
15
17. Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Mortgagee as a matter of right and without
notice to Mortgagor, unless otherwise required by applicable law, and
without regard to the adequacy or inadequacy of the Mortgaged Property or
any other collateral as security for the Indebtedness and Obligations or
the interest of Mortgagor therein, shall have the right, to the extent
permitted by applicable law, to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Mortgaged
Property, and ▇▇▇▇▇▇▇▇▇ hereby irrevocably consents to such appointment
and waives notice of any application therefor (except as may be required
by law). Any such receiver or receivers shall have all the usual powers
and duties of receivers in like or similar cases and all the powers and
duties of Mortgagee in case of entry as provided in this Mortgage,
including, without limitation and to the extent permitted by law, the
right to enter into leases of all or any part of the Mortgaged Property,
and shall continue as such and exercise all such powers until the date of
confirmation of sale of the Mortgaged Property unless such receivership is
sooner terminated.
18. Extension, Release, etc. (a) Without affecting the lien or
charge of this Mortgage upon any portion of the Mortgaged Property not
then or theretofore released as security for the full amount of the
Indebtedness, Mortgagee may, from time to time and without notice, agree
to (i) release any person liable for the Indebtedness, (ii) extend the
maturity or alter any of the terms of the Indebtedness or any guaranty
thereof, (iii) grant other indulgences, (iv) release or reconvey, or cause
to be released or reconveyed at any time at Mortgagee's option any parcel,
portion or all of the Mortgaged Property, (v) take or release any other or
additional security for any obligation herein mentioned, or (vi) make
compositions or other arrangements with debtors in relation thereto. If
at any time this Mortgage shall secure less than all of the principal
amount of the Indebtedness, it is expressly agreed that any repayments of
the principal amount of the Indebtedness shall not reduce the amount of
the lien of this Mortgage until the lien amount shall equal the principal
amount of the Indebtedness outstanding.
(b) No recovery of any judgment by ▇▇▇▇▇▇▇▇▇ and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this Mortgage,
Mortgagor authorizes Mortgagee at its option to foreclose the lien of this
Mortgage subject to the rights of any tenants of the Mortgaged Property.
The failure to make any such tenants parties defendant to any such
foreclosure proceeding and to foreclose their rights will not be asserted
by ▇▇▇▇▇▇▇▇▇ as a defense to any proceeding instituted by Mortgagee to
collect the Indebtedness or to foreclose the lien of this Mortgage.
(d) Unless expressly provided otherwise, in the event that
ownership of this Mortgage and title to the Mortgaged Property or any
estate therein shall become vested in the same person or entity, this
Mortgage shall not merge in such title but shall continue as a valid lien
on the Mortgaged Property for the amount secured hereby.
16
19. Security Agreement under Uniform Commercial Code. (a) It is
the intention of the parties hereto that this Mortgage shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code (the
"Code") of the State in which the Mortgaged Property is located. If an
Event of Default shall occur and be continuing under this Mortgage, then
in addition to having any other right or remedy available at law or in
equity, Mortgagee shall have the option of either (i) proceeding under the
Code and exercising such rights and remedies as may be provided to a
secured party by the Code with respect to all or any portion of the
Mortgaged Property which is personal property (including, without
limitation, taking possession of and selling such property) or (ii)
treating such property as real property and proceeding with respect to
both the real and personal property constituting the Mortgaged Property in
accordance with Mortgagee's rights, powers and remedies with respect to
the real property (in which event the default provisions of the Code shall
not apply). If Mortgagee shall elect to proceed under the Code, then ten
days' notice of sale of the personal property shall be deemed reasonable
notice and the reasonable expenses of retaking, holding, preparing for
sale, selling and the like incurred by Mortgagee shall include, but not be
limited to, attorneys' fees and legal expenses. At Mortgagee's request,
▇▇▇▇▇▇▇▇▇ shall assemble the personal property and make it available to
Mortgagee at a place designated by Mortgagee which is reasonably
convenient to both parties.
(b) ▇▇▇▇▇▇▇▇▇ and Mortgagee agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the
word "Equipment" are or are to become fixtures on the Real Estate; (ii)
this Mortgage upon recording or registration in the real estate records of
the proper office shall constitute a financing statement filed as a
"fixture filing" within the meaning of Sections 9-313 and 9-402 of the
Code; (iii) Mortgagor is the record owner of the Real Estate; and (iv) the
addresses of Mortgagor and Mortgagee are as set forth on the first page of
this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time, shall
execute, acknowledge and deliver to Mortgagee one or more separate
security agreements, in form satisfactory to Mortgagee, covering all or
any part of the Mortgaged Property and will further execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, any
financing statement, affidavit, continuation statement or certificate or
other document as Mortgagee may request in order to perfect, preserve,
maintain, continue or extend the security interest under and the priority
of this Mortgage and such security instrument. ▇▇▇▇▇▇▇▇▇ further agrees
to pay to Mortgagee on demand all costs and expenses incurred by Mortgagee
in connection with the preparation, execution, recording, filing and re-
filing of any such document and all reasonable costs and expenses of any
record searches for financing statements Mortgagee shall reasonably
require. Mortgagor shall from time to time, on request of Mortgagee,
deliver to Mortgagee an inventory in reasonable detail of any of the
Mortgaged Property which constitutes personal property. If Mortgagor
shall fail to furnish any financing or continuation statement within 10
days after request by Mortgagee, then pursuant to the provisions of the
Code, Mortgagor hereby authorizes Mortgagee, without the signature of
▇▇▇▇▇▇▇▇▇, to execute and file any such financing and continuation
statements. The filing of any financing or continuation statements in the
records relating to personal property or chattels shall not be construed
as in any way impairing the right of Mortgagee to proceed against any
17
personal property encumbered by this Mortgage as real property, as set
forth above.
(d) With respect to the items of Mortgaged Property which are
also encumbered by the Company Security Agreement (other than those items
which are exclusively real property interests), to the extent that the
provisions under this Section conflict with the provisions of the Company
Security Agreement, the provisions of the Company Security Agreement shall
prevail.
20. Assignment of Rents. Mortgagor hereby assigns to Mortgagee
the Rents as further security for the payment of the Indebtedness and
performance of the Obligations, and Mortgagor grants to Mortgagee the
right to enter the Mortgaged Property for the purpose of collecting the
same and to let the Mortgaged Property or any part thereof, and to apply
the Rents on account of the Indebtedness. The foregoing assignment and
grant is present and absolute, to the extent permitted by applicable law,
and shall continue in effect until the Indebtedness is paid in full, but
Mortgagee hereby waives the right to enter the Mortgaged Property for the
purpose of collecting the Rents and Mortgagor shall be entitled to
collect, receive, use and retain the Rents until the occurrence of an
Event of Default under this Mortgage; such right of Mortgagor to collect,
receive, use and retain the Rents may be revoked by Mortgagee upon the
occurrence of any Event of Default under this Mortgage by giving not less
than five days' written notice of such revocation to Mortgagor; in the
event such notice is given, Mortgagor shall pay over to Mortgagee, or to
any receiver appointed to collect the Rents, any lease security deposits,
and shall pay monthly in advance to Mortgagee, or to any such receiver,
the fair and reasonable rental value as determined by Mortgagee for the
use and occupancy of the Mortgaged Property or of such part thereof as may
be in the possession of Mortgagor or any affiliate of Mortgagor, and upon
default in any such payment Mortgagor and any such affiliate will vacate
and surrender the possession of the Mortgaged Property to Mortgagee or to
such receiver, and in default thereof may be evicted by summary
proceedings or otherwise. Mortgagor shall not accept prepayments of
installments of Rent to become due for a period of more than one month in
advance (except for security deposits and estimated payments of percentage
rent, if any).
21. Trust Funds. All lease security deposits of the Real Estate
shall be treated as trust funds not to be commingled with any other funds
of Mortgagor. Within 30 days after request by Mortgagee, Mortgagor shall
furnish Mortgagee reasonably satisfactory evidence of compliance with this
Section, together with a statement of all lease security deposits by
lessees and copies of all Leases not previously delivered to Mortgagee,
which statement shall be certified by Mortgagor.
22. Additional Rights. The holder of any subordinate lien on the
Mortgaged Property shall have no right to terminate any Lease whether or
not such Lease is subordinate to this Mortgage nor shall any holder of any
subordinate lien join any tenant under any Lease in any action to
foreclose the lien or modify, interfere with, disturb or terminate the
rights of any tenant under any Lease. By recordation of this Mortgage all
subordinate lienholders are subject to and notified of this provision, and
any action taken by any such lienholder contrary to this provision shall
be null and void. Upon the occurrence of any Event of Default, Mortgagee
may, in its sole discretion and without regard to the adequacy of its
18
security under this Mortgage, apply all or any part of any amounts on
deposit with Mortgagee under this Mortgage against all or any part of the
Indebtedness. Any such application shall not be construed to cure or
waive any Default or Event of Default or invalidate any act taken by
Mortgagee on account of such Default or Event of Default.
23. Changes in Method of Taxation. In the event of the passage
after the date hereof of any law of any Governmental Authority deducting
from the value of the Premises for the purposes of taxation any lien
thereon, or changing in any way the laws for the taxation of mortgages or
debts secured thereby for federal, state or local purposes, or the manner
of collection of any such taxes, and imposing a tax, either directly or
indirectly, on mortgages or debts secured thereby, the holder of this
Mortgage shall have the right to declare the Indebtedness due on a date to
be specified by not less than 30 days' written notice to be given to
Mortgagor unless within such 30-day period Mortgagor shall assume as an
Obligation hereunder the payment of any tax so imposed until full payment
of the Indebtedness and such assumption shall be permitted by law.
24. Notices. All notices, requests, demands and other
communications hereunder shall be given in accordance with the terms of
the Credit Agreement.
25. No Oral Modification. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after
the date of this Mortgage relating to this Mortgage shall be superior to
the rights of the holder of any intervening or subordinate lien or
encumbrance.
26. Partial Invalidity. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision
hereof, but each shall be construed as if such invalid, illegal or
unenforceable provision had never been included. Notwithstanding anything
contained in this Mortgage or in any provisions of the Indebtedness or
Loan Documents to the contrary, the obligations of Mortgagor and of any
other obligor under the Indebtedness or Loan Documents shall be subject to
the limitation that Mortgagee shall not charge, take or receive, nor shall
Mortgagor or any other obligor be obligated to pay to Mortgagee, any
amounts constituting interest in excess of the maximum rate permitted by
law to be charged by Mortgagee.
27. Mortgagor's Waiver of Rights. To the fullest extent
permitted by law, Mortgagor waives the benefit of all laws now existing or
that may subsequently be enacted providing for (i) any appraisement before
sale of any portion of the Mortgaged Property, (ii) any extension of the
time for the enforcement of the collection of the Indebtedness or the
creation or extension of a period of redemption from any sale made in
collecting such debt and (iii) exemption of the Mortgaged Property from
attachment, levy or sale under execution or exemption from civil process.
To the full extent Mortgagor may do so, ▇▇▇▇▇▇▇▇▇ agrees that ▇▇▇▇▇▇▇▇▇
will not at any time insist upon, plead, claim or take the benefit or
advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, extension or redemption, or
requiring foreclosure of this Mortgage before exercising any other remedy
granted hereunder and Mortgagor, for Mortgagor and its successors and
19
assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and
releases all rights of redemption, valuation, appraisement, stay of
execution, notice of election to mature or declare due the whole of the
secured indebtedness and marshalling in the event of foreclosure of the
liens hereby created. Notwithstanding anything contained herein or in
Indiana Code 32-8-16-1.5 to the contrary, no waiver made by Mortgagor in
this Section 28 or anywhere else in this Mortgage or in any of the other
terms and provisions of the Loan Documents or Security Documents shall
constitute the consideration for or be deemed to be a waiver or release by
Mortgagee or any judgment holder of the Indebtedness or Obligations hereby
secured of the right to seek a deficiency judgment against the Mortgagor
or any other person or entity who may be personally liable for the
Indebtedness or Obligations hereby secured, which right to seek a
deficiency judgment is hereby reserved, preserved and retained by
Mortgagee and its successors and assigns.
28. Remedies Not Exclusive. Mortgagee shall be entitled to
enforce payment of the Indebtedness and performance of the Obligations and
to exercise all rights and powers under this Mortgage or under any of the
other Loan Documents or other agreement or any laws now or hereafter in
force, notwithstanding some or all of the Indebtedness and Obligations may
now or hereafter be otherwise secured, whether by mortgage, security
agreement, pledge, lien, assignment or otherwise. Neither the acceptance
of this Mortgage nor its enforcement, shall prejudice or in any manner
affect Mortgagee's right to realize upon or enforce any other security now
or hereafter held by Mortgagee, it being agreed that Mortgagee shall be
entitled to enforce this Mortgage and any other security now or hereafter
held by Mortgagee in such order and manner as Mortgagee may determine in
its absolute discretion. No remedy herein conferred upon or reserved to
Mortgagee is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute. Every power or remedy given
by any of the Loan Documents to Mortgagee or to which it may otherwise be
entitled, may be exercised, concurrently or independently, to the extent
permitted by applicable law, from time to time and as often as may be
deemed expedient by Mortgagee. In no event shall Mortgagee, in the
exercise of the remedies provided in this Mortgage (including, without
limitation, in connection with the assignment of Rents to Mortgagee, or
the appointment of a receiver and the entry of such receiver on to all or
any part of the Mortgaged Property), be deemed a "mortgagee in
possession," and Mortgagee shall not in any way be made liable for any
act, either of commission or omission, in connection with the exercise of
such remedies.
29. Multiple Security. If (a) the Premises shall consist of one
or more parcels, whether or not contiguous and whether or not located in
the same county, or (b) in addition to this Mortgage, Mortgagee shall now
or hereafter hold one or more additional mortgages, liens, deeds of trust
or other security (directly or indirectly) for the Indebtedness upon other
property in the State in which the Premises are located (whether or not
such property is owned by Mortgagor or by others) or (c) both the
circumstances described in clauses (a) and (b) shall be true, then to the
fullest extent permitted by law, Mortgagee may, at its election, commence
or consolidate in a single foreclosure action all foreclosure proceedings
against all such collateral securing the Indebtedness (including the
20
Mortgaged Property), which action may be brought or consolidated in the
courts of any county in which any of such collateral is located.
Mortgagor acknowledges that the right to maintain a consolidated
foreclosure action is a specific inducement to Mortgagee to extend the
Indebtedness, and Mortgagor expressly and irrevocably waives any
objections to the commencement or consolidation of the foreclosure
proceedings in a single action and any objections to the laying of venue
or based on the grounds of forum non conveniens which it may now or
hereafter have. Mortgagor further agrees that if Mortgagee shall be
prosecuting one or more foreclosure or other proceedings against a portion
of the Mortgaged Property or against any collateral other than the
Mortgaged Property, which collateral directly or indirectly secures the
Indebtedness, or if Mortgagee shall have obtained a judgment of
foreclosure and sale or similar judgment against such collateral, then,
whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Premises are located,
Mortgagee may commence or continue foreclosure proceedings and exercise
its other remedies granted in this Mortgage against all or any part of the
Mortgaged Property and Mortgagor waives any objections to the commencement
or continuation of a foreclosure of this Mortgage or exercise of any other
remedies hereunder based on such other proceedings or judgments, and
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either any action under this Mortgage or such other proceedings on such
basis. Neither the commencement nor continuation of proceedings to
foreclose this Mortgage nor the exercise of any other rights hereunder nor
the recovery of any judgment by Mortgagee in any such proceedings shall
prejudice, limit or preclude Mortgagee's right to commence or continue one
or more foreclosure or other proceedings or obtain a judgment against any
other collateral (either in or outside the State in which the Premises are
located) which directly or indirectly secures the Indebtedness, and
▇▇▇▇▇▇▇▇▇ expressly waives any objections to the commencement of,
continuation of, or entry of a judgment in such other proceedings or
exercise of any remedies in such proceedings based upon any action or
judgment connected to this Mortgage, and ▇▇▇▇▇▇▇▇▇ also waives any right
to seek to dismiss, stay, remove, transfer or consolidate either such
other proceedings or any action under this Mortgage on such basis. It is
expressly understood and agreed that to the fullest extent permitted by
law, Mortgagee may, at its election, cause the sale of all collateral
which is the subject of a single foreclosure action at either a single
sale or at multiple sales conducted simultaneously and take such other
measures as are appropriate in order to effect the agreement of the
parties to dispose of and administer all collateral securing the
Indebtedness (directly or indirectly) in the most economical and least
time-consuming manner.
30. Expenses; Indemnification. (a) Mortgagor shall pay or
reimburse Mortgagee for all expenses incurred by Mortgagee after the date
of this Mortgage with respect to any and all transactions contemplated by
this Mortgage including without limitation, the preparation of any
document reasonably required hereunder or any amendment, modification,
restatement or supplement to this Mortgage, the delivery of any consent,
non-disturbance agreement or similar document in connection with this
Mortgage or the enforcement of any of Mortgagee's rights. Such expenses
shall include, without limitation, all title and conveyancing charges,
recording and filing fees and taxes, mortgage taxes, intangible personal
property taxes, escrow fees, revenue and tax stamp expenses, insurance
premiums (including title insurance premiums), title search and title
21
rundown charges, brokerage commissions, finders' fees, placement fees,
court costs, reasonable fees and disbursements of surveyors,
photographers, appraisers, architects, engineers, consulting
professionals, accountants and attorneys. ▇▇▇▇▇▇▇▇▇ acknowledges that
from time to time Mortgagor may receive statements for such expenses,
including without limitation attorneys' fees and disbursements. Mortgagor
shall pay such statements promptly upon receipt.
(b) If (i) any action or proceeding shall be commenced by
Mortgagee (including but not limited to any action to foreclose this
Mortgage or to collect the Indebtedness), or any action or proceeding is
commenced to which Mortgagee is made a party, or in which it becomes
necessary to defend or uphold the lien of this Mortgage (including,
without limitation, any proceeding or other action relating to the
bankruptcy, insolvency or reorganization of Mortgagor or any other Loan
Party), or in which Mortgagee is served with any legal process, discovery
notice or subpoena and (ii) in each of the foregoing instances such action
or proceeding in any manner relates to or arises out of this Mortgage or
Mortgagee's lending to Mortgagor or acceptance of a guaranty from a
guarantor of the Indebtedness or of any of the Obligations or any of the
transactions contemplated by this Mortgage, then Mortgagor will
immediately reimburse or pay to Mortgagee all of the expenses which have
been or may be incurred by Mortgagee with respect to the foregoing
(including reasonable counsel fees and disbursements), together with
interest thereon at the Default Rate, and any such sum and the interest
thereon shall be a lien on the Mortgaged Property, prior to any right, or
title to, interest in or claim upon the Mortgaged Property attaching or
accruing subsequent to the lien of this Mortgage, and shall be deemed to
be secured by this Mortgage. In any action or proceeding to foreclose
this Mortgage, or to recover or collect the Indebtedness, the provisions
of law respecting the recovering of costs, disbursements and allowances
shall prevail unaffected by this covenant.
(c) Mortgagor shall indemnify and hold harmless Mortgagee and
Mortgagee's affiliates, and the respective directors, officers, agents and
employees of Mortgagee and its affiliates from and against all claims,
damages, losses and liabilities (including, without limitation, reasonable
attorneys' fees and expenses) arising out of or based upon any matter
related to this Mortgage, the Mortgaged Property or the occupancy,
ownership, maintenance or management of the Mortgaged Property by
Mortgagor, including, without limitation, any claims based on the alleged
acts or omissions of any employee or agent of Mortgagor, provided that
Mortgagor shall have no obligation hereunder to Mortgagee or Mortgagee's
affiliates or any of their respective directors, officers, agents and
employees with respect to indemnified liabilities to the extent such
indemnified liabilities are found by a final and nonappealable decision of
a court of competent jurisdiction to have resulted primarily from the
gross negligence or willful misconduct of Mortgagee or Mortgagee's
affiliates or any of their respective directors, officers, agents and
employees. This indemnification shall be in addition to any other
liability which Mortgagor may otherwise have to Mortgagee.
31. Successors and Assigns. All covenants of Mortgagor contained
in this Mortgage are imposed solely and exclusively for the benefit of
Mortgagee and its successors and assigns, and no other person or entity
shall have standing to require compliance with such covenants or be
deemed, under any circumstances, to be a beneficiary of such covenants,
22
any or all of which may be freely waived in whole or in part by Mortgagee
at any time if in its sole discretion it deems such waiver advisable. All
such covenants of Mortgagor shall run with the land and bind ▇▇▇▇▇▇▇▇▇,
the successors and assigns of Mortgagor (and each of them) and all
subsequent owners, encumbrancers and tenants of the Mortgaged Property,
and shall inure to the benefit of Mortgagee, its successors and assigns.
The word "Mortgagor" shall be construed as if it read "Mortgagors"
whenever the sense of this Mortgage so requires and if there shall be more
than one Mortgagor, the obligations of the Mortgagors shall be joint and
several.
32. No Waivers, etc. Any failure by Mortgagee to insist upon the
strict performance by ▇▇▇▇▇▇▇▇▇ of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and
provisions hereof, and Mortgagee, notwithstanding any such failure, shall
have the right thereafter to insist upon the strict performance by
▇▇▇▇▇▇▇▇▇ of any and all of the terms and provisions of this Mortgage to
be performed by ▇▇▇▇▇▇▇▇▇. Mortgagee may release, regardless of
consideration and without the necessity for any notice to or consent by
the holder of any subordinate lien on the Mortgaged Property, any part of
the security held for the obligations secured by this Mortgage without, as
to the remainder of the security, in any way impairing or affecting the
lien of this Mortgage or the priority of such lien over any subordinate
lien.
33. Governing Law, etc. This Mortgage shall be governed by and
construed in accordance with the laws of the State of Indiana, except that
Mortgagor expressly acknowledges that by its terms the Credit Agreement
shall be governed and construed in accordance with the laws of the State
of New York, without regard to principles of conflict of law, and for
purposes of consistency, ▇▇▇▇▇▇▇▇▇ agrees that in any in personam
proceeding related to this Mortgage the rights of the parties to this
Mortgage shall also be governed by and construed in accordance with the
laws of the State of New York governing contracts made and to be performed
in that State, without regard to principles of conflict of law.
34. Waiver of Trial by Jury. Mortgagor and Mortgagee each hereby
irrevocably and unconditionally waive trial by jury in any action, claim,
suit or proceeding relating to this Mortgage and for any counterclaim
brought therein. Mortgagor hereby waives all rights to interpose any
counterclaim in any suit brought by Mortgagee hereunder (unless the
nonassertion thereof, as an affirmative defense, shall operate as a waiver
thereof) and all rights to have any such suit consolidated with any
separate suit, action or proceeding.
35. Certain Definitions. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words
used in this Mortgage shall be used interchangeably in singular or plural
form and the word "Mortgagor" shall mean "each Mortgagor or any subsequent
owner or owners of the Mortgaged Property or any part thereof or interest
therein," the word "Mortgagee" shall mean "Mortgagee or any subsequent
agent for the Lenders," the word "person" shall include any individual,
corporation, partnership, trust, unincorporated association, government,
governmental authority, or other entity, and the words "Mortgaged
Property" shall include any portion of the Mortgaged Property or interest
therein. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the
23
singular form of nouns and pronouns shall include the plural and vice
versa. The captions in this Mortgage are for convenience or reference
only and in no way limit or amplify the provisions hereof.
36. Receipt of Copy. ▇▇▇▇▇▇▇▇▇ acknowledges that it has received
a true copy of this Mortgage.
37. Release Upon Payment. Notwithstanding anything to the
contrary contained herein, if the Indebtedness and all other amounts
secured hereby, and any extensions, modifications or renewals thereof,
shall be well and truly paid according to its and their tenor, the
Revolving Credit Commitments shall have terminated and there shall be no
Letters of Credit outstanding, then this Mortgage shall become null and
void and shall be released in recordable form at the cost of the Mortgagor
or the then owner of the Mortgaged Property; otherwise this Mortgage shall
remain in full force and effect.
38. Release. Upon a sale or transfer of any Mortgaged Property
which, pursuant to the terms of the Credit Agreement, Mortgagor is
permitted to sell or otherwise transfer free of the lien of the Security
Documents, Mortgagee shall release such Mortgaged Property from the lien
of this Mortgage. In connection with any such sale or transfer, the
Mortgagee shall execute and deliver to Mortgagor, or to such person or
persons as Mortgagor shall reasonably designate, at the expense of
Mortgagor, a partial or total release, as applicable, and such other
documents as Mortgagor may reasonably request to evidence the release of
this Mortgage with respect to such Mortgaged Property.
24
This Mortgage has been duly executed by ▇▇▇▇▇▇▇▇▇ on the date
first above written.
ESSEX GROUP, INC.
By:________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
This Instrument was prepared by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
Before me, a Notary Public in and for said County and State,
personally appeared ________________, the ________ President of ESSEX
GROUP, INC., a corporation organized and existing under the laws of the
State of Michigan, and acknowledged the execution of the foregoing
instrument as such officer acting for and on behalf of said corporation,
and who, having been duly sworn, stated that any representations therein
contained are true and correct.
Witness my hand and Notarial seal this __ day of April, 1995.
_________________________________
(signature)
[Notarial Seal]
Schedule A
Description of the Premises
[Attach Legal Description of all parcels]
Exhibit J
[Indiana]
[FORM OF]
MORTGAGE
from
ESSEX GROUP, INC., Mortgagor
to
THE CHASE MANHATTAN BANK, as Administrative Agent, Mortgagee
DATED AS OF OCTOBER 31, 1996
This Instrument was prepared by and
after recording, please return to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
a partnership which includes
professional corporations
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
EXHIBIT K
FORM OF COMPLIANCE CERTIFICATE
[For the Fiscal Quarter ending _____]
[For the Fiscal Year ending _____]
Pursuant to Section 6.2(b) of the Credit Agreement, dated as of October
31, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"; terms defined therein being used herein as
therein defined unless otherwise defined), among Essex Group, Inc., a
Michigan corporation (the "Company"), BCP/Essex Holdings Inc.
("Holdings"), the financial institutions from time to time parties thereto
(the "Lenders"), and The Chase Manhattan Bank, as administrative agent for
the Lenders (in such capacity, the "Administrative Agent"), the
undersigned, duly elected, qualified and acting Responsible Officers of
the Company and Holdings, respectively, hereby certify that:
(a) To the best of such Responsible Officer's knowledge, the Company
and each other Loan Party has, during the period or periods referred to
above, observed or performed in all material respects all of its covenants
and other agreements, and satisfied every condition, contained in the
Credit Agreement and the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and as of the date hereof such
Responsible Officer has obtained no knowledge of any Default or Event of
Default except as follows: ____________________.
(b) The financial statements referred to in Section 6.1(a) of the
Credit Agreement which are delivered concurrently with the delivery of
this Compliance Certificate are complete and correct in all material
respects and have been prepared in reasonable detail and in accordance
with GAAP applied consistently throughout the periods reflected therein
and with prior periods (except as approved by the accountants or such
Responsible Officer, as the case may be, and disclosed therein).]
The financial statements referred to in Section 6.1(b) of the Credit
Agreement which are delivered concurrently with the delivery of this
Compliance Certificate are complete and correct in all material respects
and fairly present the financial condition and results of operations of
Holdings or the Company, as the case may be (subject to normal year-end
audit adjustments) and have been prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods (except as approved by the accountants or
such Responsible Officer, as the case may be, and disclosed therein).]
(c) The covenants as listed and calculated below are based on the
Company's [unaudited] [audited] balance sheets and statements of
operations, shareholders' equity and cash flows for the fiscal [quarter]
[year] ended ________ __, 199_, a copy of which is attached hereto.
1. Current Ratio (Section 7.1(a))
The ratio of
(i) Consolidated Current Assets $ __________
of Holdings and its consolidated
3
Subsidiaries
to
(ii) Consolidated Current Liabilities $ __________
of Holdings and its consolidated
Subsidiaries
Ratio: (must be greater 2.0 to 1.0) ____________
2. Consolidated Net Worth (Section 7.1(b))
without duplication:
(i) 50% of Consolidated $ __________
Net Income of Holdings and its consolidated
Subsidiaries for each fiscal quarter
of Holdings (beginning with the fiscal
quarter ending Mar. 31, 1995) for which
Consolidated Net Income is positive
(ii) 100% of Net Cash Proceeds of Holdings $________
Common Equity Offering consummated
after the Effective Date
(iii) 100% of any capital contribution made $_______
to Holdings or the Company after the
Effective Date by any holder of its Capital
Stock
(iv) Sum of (i), (ii) and (iii) and $ _________
$80,000,000
(v) Consolidated Net Worth of Holdings $ _________
and its consolidated subsidiaries
(must be equal to or greater than
(iv) above)
(vi) Clauses (ii) and (iii) shall be $ __________
reduced to the extent
(a) such proceeds or contributions are applied to
repurchase of equity in accordance with the Credit
Agreement and (b) Consolidated Net Worth would be
reduced as a result of repurchase
3. Interest Coverage (Section 7.1(c))
The ratio of
(i) Consolidated EBITDA of Holdings $ __________
and its consolidated Subsidiaries
for the relevant Interest Coverage
Test Period
to
3
(ii) Consolidated Net Cash Interest Expense $______
of Holdings and its consolidated
Subsidiaries for such Interest Coverage
Test Period
Ratio: (must be greater 2.0 to 1.0) ____________
4. Leverage Ratio (Section 7.1(d))
The ratio of
(i) Total Debt of Holdings and its $ __________
consolidated Subsidiaries (as of
last day of any period of four
consecutive fiscal quarters
of Holdings)
to
(ii) Consolidated EBITDA of Holdings and its $______
consolidated Subsidiaries for such period
Ratio: (after the Effective Date and prior to $_______
March 31, 1995 and prior to March 31, 1998,
must be less 5.00 to 1.0; on or after March
31, 1998 and prior to March 31, 1999, must
be less than 4.50 to 1.0; March 31, 1999 and prior to
March 31, 2000, must be less than 4.25 to
1.00; and March 31, 2000 and thereafter,
must be less than 4.0 to 1.0)
5. Senior Secured Leverage Ratio (Section 7.1(e))
The ratio of
(i) Total Senior Secured Debt of Company $ _______
and its Subsidiaries (as of the last
day of any period of four consecutive
fiscal quarters of Holdings)
to
(ii) Consolidated EBITDA for such period $ ________
Ratio: (after the Effective Date and prior $_______
to March 31, 1998, must be less 3.00 to
1.0; On or after March 31, 1998 and prior
to March 31, 1999, must be less than 2.75
to 1.0; On or after March 31, 1999 and
prior to March 31, 2000, must be less
2.50 to 1.0; March 31, 2000 and thereafter,
must be less than 2.25 to 1.0)
6. Limitation on Indebtedness (Section 7.2)
(i) (A) Aggregate amount of Non-Facility
L/C obligations $ __________
4
(B) Aggregate amount of L/C Obligations
(the sum of $ __________
(A) and (B) may not exceed $25,000,000,
at any time)
(ii) Indebtedness of the Company resulting $ _______
from the delivery of a promissory note
to support Indebtedness of the Company, in connection with
the requirements of the Company's insurance carriers to
recognize
casualty insurance premiums (may not exceed $10,000,000 at any
time)
(iii) Senior Unsecured Term Loans of the $ __________
Company (may not exceed $60,000,000
at any time)
(iv) Interest Rate Protection Agreements $ ________
in respect of the Senior Notes
(may not exceed $200,000,000 at any time)
(v) Additional unsecured indebtedness not $ _______
otherwise permitted by Section 7.2
which is (a) unsecured, (b) incurred in connection with the
acquisition of assets and secured only by such assets or (c)
secured by assets acceptable to the
Required Lenders (may not exceed
$20,000,000 at any time)
(vi) Additional unsecured indebtedness not $________
otherwise permitted by Section 7.2 (may
not exceed $25,000,000 at any time)
(vii) Additional indebtedness of Essex $_______
International not otherwise permitted by
Section 7.2 (may not exceed $15,000,000
at any time)
7. Limitation on Liens (Section 7.3(g))
(i) Aggregate amount of Indebtedness secured $ ____
by ▇▇▇▇▇ incurred as described in Section 7.3(g)
(may not exceed $25,000,000 at any time and 10% of
Consolidated Net Worth of Holdings and its
consolidated Subsidiaries)
8. Limitation on Guarantee Obligations (Section 7.4)
(i) Aggregate amount of guarantees by the $ _______
Company or any of its Subsidiaries of the
obligations of joint ventures in which the Company
or any of its Subsidiaries is a party, as described
in Section 7.4(c) (may not, when added to Joint
Venture Loans, exceed $25,000,000)
(ii) Aggregate amount of surety, indemnity, $ ______
5
performance, release and appeal bonds and guarantees
thereof issued by the Company or any of its
Subsidiaries, as described in Section 7.4(d) (may
not exceed $10,000,000 at any time)
9. Limitation on Sale of Assets (7.6)
(i) Aggregate amount of the sale or other $ _______
disposition of obsolete, outdated or
surplus assets as described in Section 7.6(a)
(may not exceed $3,000,000 in fiscal year)
(ii) Aggregate amount of fair market value of $ ____
all assets sold by the Company and its Subsidiaries
as described in Section 7.6(f) during the fiscal
[quarter] [year] of the Company ending _______, 19__
(may not exceed $20,000,000 in fiscal year or
$30,000,000 during the term of the Credit Agreement)
10. Limitation on Leases (Section 7.7)
(i) Aggregate amount of lease payments $ _________
pursuant to leases listed
on Schedule 7.7(a) (including replacements) and
operating leases entered into in the ordinary course
of business (may
not exceed $20,000,000 in fiscal year)
(ii) Aggregate outstanding amount of $ __________
Capital Lease Obligations
as described in Section 7.7(c) during the fiscal
[quarter] [year] ending _______, 19__ (may not
exceed the sum of $25,000,000 and an amount equal to
10% of Consolidated Net Worth of Holdings and its
consolidated Subsidiaries at any time)
11. Limitation on Dividends (Section 7.8) $ __________
(i) Aggregate amount of dividends to $ __________
Holdings as described in Section 7.8(b) since the
beginning of the 19__ fiscal year
(ii) Aggregate amount of Net Cash $ __________
Proceeds of sale of Holdings common stock to any
officer or employee as described in Section 7.8(b)
since the Effective Date
(iii) Aggregate amount distributed to $ __________
Holdings for repurchasing Holdings common stock as
described in Section 7.8(b) during preceding fiscal
year (ending _____________, 19__)
(iv) Sum of (a) $5,000,000 and (b) (ii) $ __________
minus (iii) (amount of (iv) may not exceed (i) in
any fiscal year)
(v) Aggregate amount of cash dividends $ __________
6
paid on the Preferred Stock since
the beginning of the 19__ fiscal year (may not
exceed $5,000,000 in any fiscal year ending on or
prior to December 31, 1998 and $10,000,000 in any
fiscal year thereafter, provided that in no event
shall such dividends, when added to Capital
Expenditures made pursuant to Section 7.10(g),
exceed the EBITDA Basket Amount for such fiscal
year)
12. Limitation on Capital Expenditures, Investments, Loans and
Advances
(Section 7.10)
(i) Aggregate amount of loans and advances $______
of the Company and its Subsidiaries as described in
Section 7.10(c) (may not exceed $1,000,000)
(ii) Aggregate amount outstanding of Loans $ _____
by the Company to any Joint Venture as described in
Section 7.10(e) (may not exceed $18,000,000 at any
time)
(iii) Aggregate amount the sum of (i) $ __________
outstanding of Loans by the
Company to any Joint Venture as described in Section
7.10(e)(i) and (ii) the aggregate amount of
guarantees described in Section 7.10(e)(ii) (may not
exceed $25,000,000 at any time)
(iii) (A) (1) Aggregate amount of Capital $ _______
Expenditures of the Company
and its Subsidiaries
since the beginning of the 19__
fiscal year
(2) Basket Expenditure Amount for $ _____
19__ fiscal year (as set forth
in Section 7.10(g)
(3) Unused Basket Expenditure $ _________
Amounts carried over from each
preceding fiscal year (including
$19,800,000 for fiscal year 1995)
(4) Amount of A(1) may not exceed $ _____
the sum of A(2) and A(3)
(provided that, unless A(1) is less than
$30,000,000, the sum of A(1) and the
amount of cash dividends on the
Preferred Stock made during the current
fiscal year shall not exceed the EBITDA
Basket Amount)
(B) Investment Expenditures since the $ ______
Effective Date (may not exceed Maximum
Investment Amount then
7
in effect)
(C) (1) Capital Expenditures and $ __________
Investment Expenditures
(excluding up to $5,000,000 of Investment
Expenditures constituting capital contributions
to any Joint Venture which (a) constitute capital
contributions or other investments in any Person
that is not a Subsidiary Guarantor or (b) are
made to acquire assets which do not constitute
Collateral since the beginning of the 19__ fiscal
year (may not exceed $20,000,000 in any fiscal
year and $30,000,000 during the term of the
Credit Agreement)
(2) Investment Expenditures $ __________
constituting capital
contributions to any Joint Venture made
since the Effective Date and excluded
pursuant to (C)(1)
(iv) (A) Capital Expenditures and $ __________
Investment Expenditures
of Company and Subsidiaries as described in
7.10(h)(x) made with proceeds from Holdings
Common Equity Offering since the Effective Date
(may not exceed $100,000,000)
(B) Capital Expenditures and $ __________
Investment Expenditures
of Company and Subsidiaries as described in
7.10(h)(y) made with proceeds from Holdings
Common Equity Offering since the Effective Date
which (a) constitute capital contributions or
other investments in any Person that is not a
Subsidiary Guarantor or (b) are made to acquire
assets which do not constitute Collateral since
Effective Date (may not exceed $50,000,000)
IN WITNESS WHEREOF, we have hereto set our names.
Dated:
By:___________________________
Name:
Title: [Responsible Officer
of the Company]
By:___________________________
Name:
Title: [Responsible Officer
of the Holdings]
EXHIBIT L
[FORM OF CONFIDENTIALITY LETTER]
[BANK LETTERHEAD]
[Date]
Essex Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The Chase Manhattan Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Name and address of Lender
selling a participation or making
an assignment under the Credit
Agreement referred to below]
Dear Sirs:
We understand that The Chase Manhattan Bank ("Chase") is acting as
Administrative Agent under the Credit Agreement dated as of October 31,
1996 (the "Credit Agreement"; terms used herein and not otherwise defined
herein are used as defined therein) among Essex Group, Inc. (the
"Company"), the lenders named therein (the "Lenders") and Chase, as
Administrative Agent. In connection with our evaluation of a proposed
purchase of a participation in or acceptance of an assignment of, a
portion of the Loans, the Letters of Credit and the Revolving Credit
Commitments, Chase and/or a Lender have furnished, and will furnish, us
with a copy of the Credit Agreement and Confidential Information. We
understand that prior to receiving a copy of the Credit Agreement and
Confidential Information, we are required under Section 11.6(g) of the
Credit Agreement to execute and deliver this letter.
We agree to keep confidential (and to cause our officers, directors,
employees, agents, attorneys, accountants and professional advisors to
keep confidential) to the extent provided in Section 11.16 of the Credit
Agreement all Confidential Information. In the event we do not
participate or accept an assignment under the Credit Agreement, at
Chase's, such ▇▇▇▇▇▇'s or the Company's request, we agree to return (and
to cause such other person to return) to Chase, such Lender or the
Company, as the case may be, all written Confidential Information and all
copies thereof, extracts therefrom and analyses and other materials based
thereon, except that we shall be permitted to disclose details of the
Confidential Information (i) to the extent contemplated in Section 11.16
and (ii) to the extent Chase and the Company shall have consented to such
disclosure in writing.
We further agree that we will use the Confidential Information only in
connection with our evaluation of becoming a possible participant or
assignee under the Credit Agreement.
The undertakings contained herein are for the benefit of each of you.
2
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
[Name of Institution]
By: _______________________
Name:
Title: