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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) April 1, 1998
______________________________
EVENFLO & SPALDING HOLDINGS CORPORATION
________________________________________________________________________________
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 333-14569 59-2439656
________________________________________________________________________________
(State or Other Jurisdiction of Commission (I.R.S. Employer
Incorporation or Organization) File Number Identification No.)
601 South Harbour Island Boulevard, Suite 200, Tampa, Florida 33602-3141
________________________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (813) 204-5200
________________________
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Item 5. Other Events.
Evenflo & Spalding Holdings Corporation announced on April 1, 1998, that it has
reached an agreement with its bank syndicate to amend its senior credit
agreement and to provide Spalding & Evenflo Companies, Inc., a subsidiary of
the Company, with an additional $25 million senior secured credit facility
through August 31, 1998.
Item 7. Financial Statements and Exhibits
(c) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
Exhibit Description
10.1 Credit Agreement Amendment No. 2, dated March 31, 1998, to the
Credit Agreement dated September 30, 1996, among Evenflo &
Spalding Holdings Corporation, as the Borrower, the Lenders and
Bank of America National Trust & Savings Association, as the
administrative agent for the Lenders.
10.2 Security Agreement dated as of March 31, 1998, among Evenflo &
Spalding Holdings Corporation, as the Borrower, Spalding & Evenflo
Companies, Inc., Evenflo Company, Inc., Etonic Worldwide
Corporation, Lisco, Inc., S&E Finance Co., Inc., Spalding Sports
Centers, Inc., Etonic Lisco, Inc., Lisco Furniture, Inc., Lisco
Feeding, Inc., and Lisco Sports, Inc. as Subsidiary Grantors, and
Bank of America National Trust & Savings Association, as
Administrative Agent for the Lenders.
10.3 Amended and Restated Pledge Agreement, dated as of March 31, 1998,
to the Credit Agreement dated September 30, 1996, made by Evenflo
& Spalding Holdings Corporation, as the Borrower, Spalding &
Evenflo Companies, Inc., Evenflo Company, Inc., Etonic Worldwide
Corporation, Lisco, Inc., S&E Finance Co., Inc., Spalding
Sports Centers, Inc., Etonic Lisco, Inc., Lisco Furniture, Inc.,
Lisco Feeding, Inc., and Lisco Sports, Inc. as Subsidiary
Pledgors, in favor of Bank of America National Trust & Savings
Association, as Administrative Agent for the Lenders.
10.4 Supplement No. 1, dated March 31, 1998, to the Guaranty, dated as
of September 30, 1996, made by Spalding Sports Centers, Inc. in
favor of Bank of America National Trust & Savings Association,
as Administrative Agent for the Lenders.
2
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10.5 $25,000,000 Liquidity Facility, dated as of March 30, 1998, among
Evenflo & Spalding Holdings Corporation, as a Guarantor, Spalding
& Evenflo Companies, Inc. as the Borrower, Bank of America
National Trust & Savings Association, as Administrative Agent,
Merrill Lynch Capital Corporation, as Documentation Agent,
NationsBank N.A. as Syndication Agent, and Lenders.
10.6 Security Agreement, dated as of March 30, 1998, among Evenflo &
Spalding Holdings Corporation, Spalding & Evenflo Companies, Inc.,
as the Borrower, Evenflo Company, Inc., Etonic Worldwide
Corporation, Lisco, Inc., S&E Finance Co., Inc., Spalding Sports
Centers, Inc., Etonic Lisco, Inc., Lisco Furniture, Inc., Lisco
Feeding, Inc., and Lisco Sports, Inc. as Subsidiary Grantors, and
Bank of America National Trust & Savings Association, as
Administrative Agent for the Lenders to the Liquidity Facility
dated as of March 30, 1998.
10.7 Pledge Agreement, dated as of March 30, 1998, among Evenflo &
Spalding Holdings Corporation, Spalding & Evenflo Companies, Inc.,
as the Borrower, Evenflo Company, Inc., Etonic Worldwide
Corporation, Lisco, Inc., S&E Finance Co., Inc., Spalding Sports
Centers, Inc., Etonic Lisco, Inc., Lisco Furniture, Inc., Lisco
Feeding, Inc., and Lisco Sports, Inc. as Subsidiary Grantors, and
Bank of America National Trust & Savings Association, as
Administrative Agent for the Lenders to the Liquidity Facility
dated as of March 30, 1998.
10.8 Guaranty, dated as of March 30, 1998, among Evenflo & Spalding
Holdings Corporation, Spalding & Evenflo Companies, Inc., as the
Borrower, Evenflo Company, Inc., Etonic Worldwide Corporation,
Lisco, Inc., S&E Finance Co., Inc., Spalding Sports Centers,
Inc., Etonic Lisco, Inc., Lisco Furniture, Inc., Lisco Feeding,
Inc., and Lisco Sports, Inc. as Subsidiary Grantors, and Bank of
America National Trust & Savings Association, as Administrative
Agent for the Lenders to the Liquidity Facility dated as of March
30, 1998.
99.1 News release dated April 1, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Evenflo & Spalding Holdings Corporation
(Registrant)
Date: April 13, 1998 By: /s/ W. Michael Kipphut
--------------------------------
W. Michael Kipphut
Vice President and Treasurer
(a Principal Financial Officer
and authorized signatory)
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[EXECUTION COPY]
CREDIT AGREEMENT AMENDMENT NO. 2
THIS CREDIT AGREEMENT AMENDMENT NO. 2, dated as of March 31, 1998
(this "Amendment"), is made by and among Evenflo & Spalding Holdings
Corporation (formerly known as E&S Holdings Corporation), a company organized
under the laws of Delaware (the "Borrower"), the Lenders (as defined below) and
Bank of America National Trust & Savings Association ("Bank of America"), as
the administrative agent (the "Administrative Agent") for the Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower, the various financial institutions parties
thereto from time to time (collectively, the "Lenders"), Bank of America, as
swing line lender, as fronting lender and as administrative agent for the
Lenders, Merrill Lynch Capital Corporation, as documentation agent for the
Lenders, and NationsBank N.A. South, as syndication agent for the Lenders, have
heretofore entered into that certain Credit Agreement, dated as of September
30, 1996 (as amended by the First Amendment to Credit Agreement, dated as of
December 11, 1996, the "Existing Credit Agreement"); and
WHEREAS, the Borrower has requested, and the Lenders and the
Administrative Agent are willing, subject to the terms and conditions set forth
below, to amend the Existing Credit Agreement as provided below (the Existing
Credit Agreement, as amended pursuant to the terms of this Amendment, being
referred to as the "Amended Credit Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Borrower, the Lenders and the Administrative
Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
SUBPART 1.1. Certain Definitions. The following terms (whether or
not underscored) when used in this Amendment shall have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Administrative Agent" is defined in the preamble.
"Amended Credit Agreement" is defined in the second recital.
"Amendment" is defined in the preamble.
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"Amendment Effective Date Certificate" means the amendment effective
date certificate executed and delivered by the Borrower pursuant to Subpart
3.8, substantially in the form of Annex I hereto.
"Borrower" is defined in the preamble.
"Existing Credit Agreement" is defined in the first recital.
"Lenders" is defined in the first recital.
"Second Amendment Effective Date" is defined in Subpart 3.1.
"Security Agreement" means the Security Agreement executed and
delivered by the Borrower and each Domestic Subsidiary pursuant to Subpart 3.6,
substantially in the form of Exhibit A hereto, as amended, supplemented,
amended and restated or otherwise modified from time to time.
SUBPART 1.2. Other Definitions. Terms for which meanings are
provided in the Amended Credit Agreement are, unless otherwise defined herein
or the context otherwise requires, used in this Amendment with such meanings.
ARTICLE II
AMENDMENTS
Effective on (and subject to the occurrence of) the Second Amendment
Effective Date, certain provisions of the Existing Credit Agreement are hereby
amended in accordance with this Article II; except expressly as so amended by
this Amendment, the Existing Credit Agreement shall continue in full force and
effect in accordance with its terms.
SUBPART 2.1. Amendments to Article I of the Existing Credit
Agreement. Article I of the Existing Credit Agreement ("Definitions") is
amended in accordance with Subparts 2.1.1 and 2.1.2.
SUBPART 2.1.1. Section 1.1 of the Existing Credit Agreement ("Certain
Defined Terms") is amended by inserting in such Section the following
definitions in the appropriate alphabetical order:
"Bank Book" means the Bank Book, dated March 23, 1998 and
delivered by the Borrower to the Lenders on such date.
"Casualty Event" means the damage, destruction or
condemnation, as the case may be, of any property of the Borrower or
any of its Subsidiaries.
"Casualty Proceeds" means, with respect to any Casualty Event,
the amount of any insurance proceeds or condemnation awards received
by the Borrower or any of its Subsidiaries in connection therewith.
"Liquidity Facility" means the Liquidity Facility, dated as of
March 30, 1998, among Spalding & Evenflo Companies, Inc., as the
borrower, the lenders parties thereto, Bank of
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America National Trust & Savings Association, as the administrative
agent, Merrill Lynch Capital Corporation, as the documentation agent
and NationsBank N.A. South as the syndication agent, as such Liquidity
Facility may be amended, modified, amended and restated or extended in
accordance with its terms.
"Mortgage" means, collectively, each mortgage or deed of trust
or leasehold mortgage executed and delivered by the Borrower or any
other Obligor in favor of the Administrative Agent for the benefit of
the Lenders pursuant to the requirements of this Agreement, in form
and substance reasonably satisfactory to the Administrative Agent, in
each case as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Refinancing" has the meaning set forth in Section 8.4(m).
"Second Amendment" means the Credit Agreement Amendment No. 2,
dated as of March 31, 1998, among the Borrower, the Lenders parties
thereto and the Administrative Agent.
"Security Agreement" means the Security Agreement executed and
delivered pursuant to this Agreement, substantially in the form of
Exhibit A to the Second Amendment, as amended, supplemented, amended
and restated or otherwise modified from time to time.
SUBPART 2.1.2. The following definitions in Section 1.1 of the
Existing Credit Agreement ("Certain Defined Terms") are amended as follows:
(a) "Agreement": the definition of "Agreement" is hereby
amended and restated as follows:
"'Agreement" means this Credit Agreement, as amended
(including as previously amended), supplemented,
amended and restated or otherwise modified from time
to time."
(b) "Applicable Margin": the definition of "Applicable
Margin" is hereby amended and restated as follows:
"'Applicable Margin' means, with respect to the
Revolving Loans, the Tranche A Term Loans or the
Commitment Fee, as of any date, the rate per annum
determined pursuant to the following pricing grid
(expressed in basis points), subject to the
provisions of this definition set forth below:
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PRICING GRID
<TABLE>
<CAPTION>
RATIO OF CONSOLIDATED
TOTAL DEBT TO
CONSOLIDATED EBITDA EURODOLLAR RATE MARGIN BASE RATE MARGIN COMMITMENT FEE
<S> <C> <C> <C>
X > 6.0 250.0 150.0 50.0
X < 6.0, but > 5.5 225.0 125.0 42.5
-
X < 5.5, but > 5.0 200.0 100.0 37.5
-
X < 5.0, but > 4.5 162.5 62.5 37.5
-
X < 4.5, but > 4.0 137.5 37.5 35.0
-
X < 4.0, but > 3.5 112.5 12.5 30.0
-
X < 3.5, but > 3.0 87.5 0.0 25.0
-
X < 3.0 62.5 0.0 20.0
-
</TABLE>
The Applicable Margin for Tranche B Term Loans shall
be: (i) for so long as the ratio of Consolidated Total Debt to
Consolidated EBITDA is greater than 6.0:1.0: 3.00% for
Eurodollar Loans and 2.00% for Base Rate Loans, and (ii) for
so long as the ratio of Consolidated Total Debt to
Consolidated EBITDA is less than or equal to 6.0:1.0: 2.75%
for Eurodollar Loans and 1.75% for Base Rate Loans.
The Applicable Margin for Tranche C Term Loans shall
be: (i) for so long as the ratio of Consolidated Total Debt to
Consolidated EBITDA is greater than 6.0:1.0: 3.50% for
Eurodollar Loans and 2.50% for Base Rate Loans, and (ii) for
so long as the ratio of Consolidated Total Debt to
Consolidated EBITDA is less than or equal to 6.0:1.0: 3.25%
for Eurodollar Loans and 2.25% for Base Rate Loans.
The Applicable Margin for Tranche D Term Loans shall
be: (i) for so long as the ratio of Consolidated Total Debt to
Consolidated EBITDA is greater than 6.0:1.0: 4.00% for
Eurodollar Loans and 3.00% for Base Rate Loans, and (ii) for
so long as the ratio of Consolidated Total Debt to
Consolidated EBITDA is less than or equal to 6.0:1.0: 3.75%
for Eurodollar Loans and 2.75% for Base Rate Loans.
The Applicable Margin for Tranche A Term Loans,
Revolving Loans and the Commitment Fee, shall be determined
pursuant to the Pricing Grid above at such time. As set forth
in the Pricing Grid, "X" refers to the ratio of Consolidated
Total Debt to Consolidated EBITDA. For the purposes of
determining the Applicable Margin with respect to any Loan,
the ratio of Consolidated Total Debt to Consolidated EBITDA
shall be determined (x) from and after the effective date
hereof to the date of the Compliance Certificate referred to
in clause (y), based on the highest such level set forth above
with respect to each Loan, and (y) on and after the date of
delivery of the Compliance Certificate delivered pursuant to
clause (b) of Section 7.2, based upon such certificate, and
shall remain in effect until such time as the next Compliance
Certificate shall be delivered (and, at such time, the
Applicable Margin shall change based on such next Compliance
Certificate); provided, however, that, if (i) any such
Compliance Certificate is not delivered to the Administrative
Agent on or prior to the date required
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pursuant to clause (b) of Section 7.2 and (ii) such Compliance
Certificate indicates a ratio of Consolidated Total Debt to
Consolidated EBITDA that would result in an Applicable Margin
which is greater than the Applicable Margin then in effect,
then (A) such greater Applicable Margin shall be deemed to be
in effect for all purposes of this Agreement from the date such
Compliance Certificate was required to be delivered to the
Administrative Agent pursuant to clause (b) of Section 7.2 and
(B) in furtherance of the other terms of this proviso, if the
Borrower shall have made any payment in respect of interest or
fees during the period from the date such Compliance
Certificate was required to be delivered to the actual date of
delivery of such Compliance Certificate, then the Borrower
shall pay in the form of a supplemental payment of interest
and/or fees, an amount which equals the difference between the
amount of interest and/or fees that would otherwise have been
paid determined as if such Compliance Certificate was delivered
on the date such Compliance Certificate was required to be
delivered and the amount of such interest and/or fees so paid,
which supplemental payment of interest and/or fees shall be due
and payable on the actual date of delivery of such Compliance
Certificate."
(c) "Capital Expenditures": clause (c) of the proviso to the
definition of "Capital Expenditures" is hereby amended and restated as
follows"
" (c) the purchase or construction of property, plant or
equipment with Casualty Proceeds within one year of the
receipt of such proceeds; and";
(d) "Consolidated EBITDA": subclause (viii) of clause (b) is
hereby amended and restated as follows:
"(viii) the amount of any restructuring charge or reserve;
provided, that for any computation of such amount with respect
to a period ending on or after March 31, 1998, the maximum
aggregate amount of any such restructuring charge or reserve
shall be limited to the aggregate amounts projected as of
March 23, 1998 in the Bank Book (and, without duplication,
such charges taken or disclosed in the Bank Book in respect of
periods ending prior to March 31, 1998)";
(e) "Interest Period": the definition of "Interest Period" is
amended by deleting the words "three or six months thereafter (or
ending 9 or 12 months thereafter if available to all Lenders making
such Loans as determined by such Lenders in good faith based on
prevailing market conditions)" beginning in the third line thereof and
by inserting the words "or three months thereafter" after the words
"on the date one, two," appearing in the third line thereof;
(f) "Loan Documents": the definition of "Loan Documents" is
hereby amended and restated as follows:
"'Loan Documents" means this Agreement, any
Notes, the Guaranty, the Pledge Agreement, each
Mortgage, the Security Agreement and the Fee
Letter.'"
(g) "Pledge Agreement": the definition of "Pledge Agreement"
is hereby amended and restated as follows:
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"'Pledge Agreement' means the Pledge
Agreement to be duly executed and delivered by the Borrower
and each Domestic Subsidiary which is a Material
Subsidiary, substantially in the form of Exhibit F, as amended,
supplemented, amended and restated or otherwise modified from
time to time."
(h) "Restricted Subsidiary": the definition of "Restricted
Subsidiary" is amended by deleting the words "which is not an
Unrestricted Subsidiary" in the Credit Agreement; and
(i) "Unrestricted Subsidiary": the definition of
"Unrestricted Subsidiary" is deleted from Section 1.1 of the Credit
Agreement, and all references to "Unrestricted Subsidiary" shall be
deleted.
SUBPART 2.2. Amendments to Article II of the Existing Credit
Agreement. Article II of the Existing Credit Agreement ("The Credits") is
amended in accordance with Subpart 2.2.1.
SUBPART 2.2.1. Section 2.8 of the Existing Credit Agreement
("Mandatory Prepayments of Loans") is amended as follows:
(a) clause (a) thereof is hereby amended and restated as
follows:
"(a) Asset Dispositions. In the event that the Net
Disposition Proceeds of any Disposition (such Disposition, a
"Current Disposition") (other than a Disposition permitted
pursuant to clause (a), (b) or (c) of Section 8.2), and of all
prior Dispositions as to which a prepayment has not yet been
made under this clause (a), shall equal or exceed $250,000
then, the Borrower or such Restricted Subsidiary shall,
concurrently with the receipt of the Net Disposition Proceeds
of the Current Disposition, apply 100% of the Net Disposition
Proceeds of the Current Disposition and all such prior
Dispositions in accordance with clause (f).";
(b) clause (b) thereof is hereby amended by replacing the
words "Term Loans" in the fourth line thereof with the words "Loans
and certain other Indebtedness in accordance with clause (f),";
(c) clause (c) is amended by replacing the words "Term Loans"
in the sixth line thereof with the words "Loans and certain other
Indebtedness in accordance with clause (f),";
(d) a new clause (d) is added as follows:
"(d) Casualty Proceeds. If during any Fiscal Year one
or more Casualty Events shall have occurred for which the
Borrower or any Restricted Subsidiary shall receive Casualty
Proceeds in excess of $1,000,000 during such Fiscal Year, then
the Borrower or such Restricted Subsidiary may (provided that
no payment Default or Event of Default is continuing at such
time), within 365 days after the receipt by the Borrower or
such Restricted Subsidiary of such Casualty Proceeds, reinvest
up to 100% of such Casualty Proceeds to replace or repair the
assets that were the subject of such Casualty Event(s). Any
Casualty Proceeds that are not reinvested in accordance with
the previous sentence shall be applied to prepay Loans and
certain other Indebtedness in accordance with clause (f), (x)
in the case of the continuance of a
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payment Default or an Event of Default at such time, on the day
such Casualty Proceeds are received, in an amount equal to
100% of such Casualty Proceeds, and (y) otherwise on the
Business Day immediately succeeding the last day of such
365-day period, in an aggregate amount equal to the portion of
such Casualty Proceeds not so reinvested.";
(e) the previously existing clause (d) thereof is relettered
as "clause (f)" and is hereby amended and restated as follows:
"(f) Application of Proceeds. Any prepayment made
pursuant to clauses (a), (b), (c) and (d) shall be applied
first, to prepay Term Loans, allocated among the Term Loans as
follows: (i) first, to the next two scheduled and unpaid
principal installments of the Tranche A Term Loans (and any
Tranche B Term Loan, Tranche C Term Loan and Tranche D Term
Loan installments payable on or before such installment payment
dates) in direct order of maturities, and (ii) second, to the
remaining installments of the Term Loans pro rata, and, in each
case, related interest on the Term Loans, second, to reduce
outstandings under the Commitment Amount (as defined in the
Liquidity Facility) under the Liquidity Facility, third to any
other Obligations (as defined in the Liquidity Facility) under
the Liquidity Facility, fourth, to prepay Revolving Loans and
reduce the related Revolving Commitment and fifth, to pay any
other Obligations"; and
(f) the previously existing clause (f) thereof is relettered
as "clause (h)" and is amended by deleting in its entirety the
parenthetical in the first sentence thereof.
SUBPART 2.3. Amendments to Article VII of the Existing Credit
Agreement. Article VII of the Existing Credit Agreement ("Affirmative
Covenants") is amended in accordance with Subparts 2.3.1 through 2.3.4.
SUBPART 2.3.1. Section 7.1 of the Existing Credit Agreement
("Financial Statements") is amended as follows:
(a) a new clause (c) is added as follows:
"(c) promptly after available, but not later than 30
days after the end of each calendar month, a copy of (i) the
unaudited consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as of the end of such month and the
related consolidated statements of earnings, cash flows and,
to the extent prepared, shareholders' equity for the period
commencing on the first day and ending on the last day of such
month and (ii) such divisional and segment net sales and
EBITDA reporting information prepared by the Borrower
consistent with the Borrower's normal monthly internal
reporting, certified by a Responsible Officer as fairly
presenting in all material respects (subject to year-end audit
adjustments) the financial position and the results of
operations of the Borrower and its Restricted Subsidiaries as
of the date thereof."
SUBPART 2.3.2. Section 7.11 of the Existing Credit Agreement ("Future
Subsidiaries") is amended and restated as follows:
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"7.11 Future Subsidiaries. Without limiting the effect of any
provision contained herein (including Section 8.3), upon any
Person becoming, after the date hereof, a Subsidiary of the
Borrower (other than any Subsidiary that is not a Material
Subsidiary), including any Person that was a Restricted
Subsidiary, but not a Material Subsidiary, but which becomes a
Material Subsidiary through internal growth or otherwise, or
upon the Borrower or any Subsidiary acquiring additional
capital stock of any existing Subsidiary which is then pledged
under the Pledge Agreement, at the Borrower's expense:
(a) regardless of whether such Person is a Material
Subsidiary, in the event such Person is a Domestic Subsidiary,
the Borrower shall cause such Person, if not theretofore a
party to the Guaranty, to execute a supplement to (i) the
Guaranty for the purpose of becoming a guarantor thereunder
and (ii) the Security Agreement for the purpose of becoming a
grantor thereunder, together with acknowledgment copies of
Uniform Commercial Code financing statements (form UCC-1)
executed and delivered by such Subsidiary naming such
Subsidiary as the debtor and the Administrative Agent as the
secured party, or other similar instruments or documents,
filed under the Uniform Commercial Code of all jurisdictions
as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect the security interest of the
Administrative Agent pursuant to the Security Agreement; and
(b) (i) in the event such Person is a Domestic
Subsidiary of the Borrower or a Material Subsidiary which is a
direct Foreign Subsidiary of the Borrower or a Domestic
Subsidiary of the Borrower, the Borrower or such applicable
Domestic Subsidiary shall, pursuant to the Pledge Agreement,
pledge to the Administrative Agent for the benefit of the
Lenders (free and clear of any other pledges relating to such
Person or any of its Subsidiaries) all of the outstanding
shares of such capital stock of such Subsidiary owned directly
by it (provided, that, in the event such Subsidiary is a
Foreign Subsidiary, the Borrower or Domestic Subsidiary shall
not be required to pledge more than 65% of the outstanding
shares of the capital stock of such Foreign Subsidiary), along
with undated stock powers for such certificates, executed in
blank (or, if any such shares of capital stock are
uncertificated, confirmation and evidence satisfactory to the
Administrative Agent that the security interest in such
uncertificated securities has been perfected by the
Administrative Agent in accordance with Section 9-115 of the
Uniform Commercial Code as in effect in the State of New York
or any similar law which may be applicable); and
(ii) in the event such Person is a Material Subsidiary and a
direct Foreign Subsidiary of the Borrower or any Domestic
Subsidiary of the Borrower, the Borrower or such applicable
Domestic Subsidiary shall, within 60 days of such Person
having become a Material Subsidiary of the Borrower or such
Domestic Subsidiary (and, in the case of any such existing
direct Foreign Subsidiary which is a Material Subsidiary as of
the Second Amendment Effective Date, within 60 days of the
Second Amendment Effective Date) execute and deliver a
supplement to the Pledge Agreement, which supplement shall,
under the law of incorporation of such Foreign Subsidiary, be
effective to create and perfect a valid security interest in
65% of the outstanding shares of the capital stock of such
Foreign Subsidiary, accompanied by legal opinions of outside
counsel to the Borrower in respect of such collateral,
reasonably satisfactory to the Agents."
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SUBPART 2.3.3. A new Section 7.15 is added as follows
"7.15. Real Estate. Within 45 days after the Second
Amendment Effective Date (or, with respect to the selection by
the Agents of a plant in substitution for any other single
plant specified below (and only with respect to such plant) in
accordance with the terms hereof, 45 days after the selection
of such plant), the Borrower shall cause to be delivered a
duly executed Mortgage (together with documentation requested
by and reasonably satisfactory to the Agents) with respect to
the plant located in Chicopee, Massachusetts and the plant
located in Piqua, Ohio (or any other two plants selected by
the Agents for which the provision of a security interest
thereon is reasonably practicable), accompanied by legal
opinions of outside counsel to the Borrower in respect of such
collateral, reasonably satisfactory to the Agents, all at the
Borrower's expense."
SUBPART 2.3.4. A new Section 7.16 is added as follows
"7.16. Pledged Stock of Foreign Subsidiaries.
Within 60 days after the Closing Date, the Borrower shall
promptly deliver, or cause to be delivered, appropriate
supplemental security documentation (consistent with the
corresponding terms of the Pledge Agreement) under the law of
the jurisdiction of incorporation of each Foreign Subsidiary
which is a direct Subsidiary of the Borrower or a Domestic
Subsidiary to the Administrative Agent, duly executed and
delivered by an Authorized Officer of the pledgor thereof, all
in form and substance satisfactory to the Administrative
Agent."
SUBPART 2.4. Amendments to Article VIII of the Existing Credit
Agreement. Article VIII of the Existing Credit Agreement ("Negative Covenants")
is amended in accordance with Subparts 2.4.1 through 2.4.7.
SUBPART 2.4.1. Section 8.1 of the Existing Credit Agreement
("Limitation on Liens") is amended as follows:
(a) clause (l) thereof is amended by inserting "in an
aggregate amount not to exceed $5,000,000 at any time outstanding
immediately following the word "Indebtedness" in the third line of
subclause (i) thereof;
(b) the provision set forth in clause (m) thereof is deleted
in its entirety and replaced with the word "Reserved.";
(c) clause (q) thereof is amended by inserting "under the
Liquidity Facility (including any extensions thereof and any
Refinancing permitted pursuant to Section 8.4(m) (plus accrued
interest and Obligations (as defined in the Liquidity Facility) under
the Liquidity Facility or such Refinancing from time to time) plus the
Lien on the plant located in Chicopee, Massachusetts, existing on the
date hereof and securing an aggregate principal amount not to exceed
$6,500,000;" at the end thereof; and
(d) a new clause (t) is added as follows:
-9-
<PAGE> 10
"(t) Liens placed on assets of any Foreign Subsidiary to
secure Indebtedness of a Foreign Subsidiary permitted pursuant
to Section 8.4(g), up to an aggregate principal amount at any
time of $50,000,000 and only to the extent that such
Indebtedness is not guaranteed by the Borrower or a Domestic
Subsidiary (without duplication)."
SUBPART 2.4.2. Section 8.2 of the Existing Credit Agreement
("Consolidations and Mergers; Sales of Assets") is amended as follows:
(a) clause (b) thereof is amended by inserting "; provided
that neither the Borrower nor any Domestic Subsidiary may sell or
otherwise transfer (i) its assets to any Foreign Subsidiary other than
in the ordinary course of business or (ii) material assets to one or
more Subsidiaries which are not Guarantors" at the end thereof;
(b) subclause (ii) of the proviso to clause (d) thereof is
amended by adding the words "; provided that in no event shall more
than 15% of the total consideration for any such Disposition consist
of non-cash consideration" at the end of such subclause; and
(c) clause (d) thereof is amended by adding a new subclause
(iv) to the proviso thereof as follows:
"(iv) any Disposition to an Affiliate of the Borrower
or any Restricted Subsidiary having an aggregate purchase
price of $10,000,000 or more shall require in advance of such
Disposition an independent fairness opinion with respect
thereto, a copy of which shall be delivered in advance of such
Disposition to the Lenders, from a firm reasonably acceptable
to the Agents."
SUBPART 2.4.3. Section 8.3 of the Existing Credit Agreement ("Loans,
Acquisitions and Investments") is amended as follows:
(a) clause (b) thereof is amended and restated as follows:
"(b) Investments in the Borrower or in any of its
Subsidiaries as reasonably necessary to conduct its business
operations or as necessary to effect the restructuring of the
Borrower and its Subsidiaries as contemplated;"
(b) clause (d) thereof is amended by deleting the number
"$5,000,000" appearing therein and inserting "$2,000,000" in
replacement therefor;
Section 8.3(h) is amended and restated as follows:
"(h) Investments by the Borrower or any Subsidiary
constituting an Acquisition which has been approved in writing by the
Majority Lenders (any such Acquisition so approved, a "Permitted
Acquisition");"; and
(c) clause (i) thereof is hereby amended and restated as
follows:
"(i) so long as no Event of Default or payment
Default exists and is continuing at the time of the making of
such Investment (or would occur immediately after giving
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<PAGE> 11
effect thereto), additional Investments by the Borrower or its
Restricted Subsidiaries in an aggregate amount not to exceed
$1,000,000 at any time."
SUBPART 2.4.4. Section 8.4 of the Existing Credit Agreement
("Limitation on Indebtedness") is amended as follows:
(a) clause (c) thereof is amended by inserting "; provided
that such Indebtedness shall (i) if it is Indebtedness of the
Borrower, be subordinated to the Obligations and the Indebtedness
under the Liquidity Facility on terms reasonably satisfactory to the
Agents and (ii) to the extent it is Indebtedness held by the Borrower,
be evidenced by one or more promissory notes in form and substance
reasonably satisfactory to the Administrative Agent, which have been
duly executed, delivered and endorsed to the order of the
Administrative Agent in pledge pursuant to the Pledge Agreement;" at
the end thereof;
(b) subclause (ii) of the proviso to clause (d) is amended by
substituting the number "$75,000,000" with the number "$50,000,000"
and by adding at the end of such subclause the words "less the
principal amount of any such Indebtedness which is secured by a Lien
permitted pursuant to Section 8.1(t)";
(c) clause (e) thereof is amended by inserting "and the tenor
thereof is not in any respect shortened" immediately following the
parenthetical in subclause (i) of the proviso thereof;
(d) the provision set forth in clause (h) thereof is deleted
in its entirety and replaced with the word "Reserved.";
(e) the provision set forth in clause (i) thereof is deleted
in its entirety and replaced with the word "Reserved.";
(f) clause (l) thereof is amended by adding the word
"unsecured" after the word "additional" and by deleting the number
"$50,000,000" appearing therein and inserting "$25,000,000"; and
(g) a new clause (m) will be added as follows:
"(m) additional first-priority secured Indebtedness
of the Borrower and its Restricted Subsidiaries not to exceed
$25,000,000 in principal amount at any time outstanding,
incurred under the Liquidity Facility (as amended or
extended) and any refinancing thereof (the "Refinancing")
provided, that, as to any Refinancing, (i) the Liquidity
Facility has been repaid (or, concurrently with the
Refinancing, will be repaid) in full, (ii) the principal
amount of the Refinancing is not greater than $25,000,000,
(iii) prior to the Refinancing, the Borrower shall have
requested the Agents to amend or extend the Liquidity Facility
and one or more of the Agents have not agreed to such
amendment or extension, (iv) the institutions providing the
Refinancing shall not include any person which is not a Lender
under this Agreement immediately prior to the Refinancing, and
(v) the Lien on any property securing the Refinancing shall
not be prior to the Lien securing the Obligations."
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<PAGE> 12
SUBPART 2.4.5. Section 8.5 of the Existing Credit Agreement
("Restricted Payments") is amended as follows:
(a) the provision set forth in clause (b) thereof is deleted
in its entirety and replaced with the word "Reserved.";
(b) the provision set forth in clause (c) thereof is deleted
in its entirety and replaced with the word "Reserved.";
(c) clause (e) thereof is amended by inserting "all as in
effect on the Second Amendment Effective Date (as defined in the
Second Amendment)" at the end thereof; and
(d) a new clause (g) will be added as follows:
"(g) Notwithstanding anything to the contrary in this
Section 8.5, no Subsidiary shall declare or make any dividend
payment unless such dividend is payable to the Borrower or a
wholly-owned Subsidiary of the Borrower."
SUBPART 2.4.6. Section 8.6 of the Existing Credit Agreement
("Financial Covenants") is amended as follows:
(a) the table appearing in clause (a) thereof is amended as
follows: (i) the ratio set forth opposite "March 31, 1998" shall be
amended to be "1.35 : 1.00", (ii) the ratio set forth opposite "June
30, 1998" shall be amended to be "1.30 : 1.00", and (iii) the ratio
set forth opposite the "September 30, 1998" shall be amended to be
"1.25 : 1.00";
(b) the table appearing in clause (b) thereof is amended and
restated in its entirety to read as follows:
-12-
<PAGE> 13
<TABLE>
<CAPTION>
"Date Ratio
---- -----
<S> <C>
September 30, 1997
and the last day of each
December, March, June and
September thereafter through
June 30, 1998 1.25 : 1.00
September 30, 1998 1.00 : 1.00
December 31, 1998
and the last day of each
December, March, June and
September thereafter through
June 30, 2000 1.25 : 1.00
September 30, 2000
and the last day of each
December, March, June and
September thereafter 1.35 : 1.00"
</TABLE>
(c) the table appearing in clause (c) thereof is amended as
follows: (i) the ratio set forth opposite "March 31, 1998" shall be
amended to be "7.75 : 1.00", (ii) the ratio set forth opposite "June
30, 1998" shall be amended to be "7.75 : 1.00", and (iii) the ratio
set forth opposite the "September 30, 1998" shall be amended to be
"7.75 : 1.00";
SUBPART 2.4.7. A new Section 8.9 of the Existing Credit Agreement is
added as follows:
"8.9 Assets of the Borrower. The Borrower shall not own
beneficially or of record any material assets other than the capital
stock of its Subsidiaries (and the assets represented by the ownership
of such capital stock)."
SUBPART 2.5. Amendments to Article IX of the Existing Credit
Agreement. Article IX of the Existing Credit Agreement ("Events of Default") is
amended in accordance with Subpart 2.5.1.
SUBPART 2.5.1. Section 9.1 of the Existing Credit Agreement ("Event
of Default") is amended as follows:
(a) clause (c) thereof is hereby amended and restated as
follows:
" (c) Specific Defaults. The Borrower fails to perform
or observe any term, covenant or agreement
contained in any of clause (a)(i) of Section 7.3 or
Sections 8.1, 8.2 through 8.8, Section 4 of the
Security Agreement or Section 8 of the Pledge
Agreement; or"
(b) clause (d) thereof is amended by (i) deleting "Borrower
fails to perform or observe any term, covenant or agreement contained
in Section 8.1 and such default shall continue
-13-
<PAGE> 14
unremedied for 10 days after the date upon which a Responsible Officer
of the Borrower has actual knowledge or receives written notice
thereof; or the", and (ii) inserting "(i) a Responsible Officer of
the Borrower has actual knowledge thereof or (ii)" immediately
following the words "upon which" appearing in the sixth line thereof;
(c) clause (k) thereof is amended and restated as follows:
"(k) Collateral. Any provision of the Pledge
Agreement, the Security Agreement or any Mortgage shall for
any reason (other than as a result of acts or omissions of the
Administrative Agent or any Lender) cease to create a valid
security interest in the collateral purported to be covered
thereby (other than as to any such collateral which is
immaterial) or any material provision of the Pledge Agreement,
the Security Agreement, any Mortgage or the Guaranty shall
cease to be valid and binding on or enforceable against the
Borrower or any other Obligor party thereto, or the Borrower or
any other Obligor shall deny or disaffirm in writing its
obligations under the Pledge Agreement, the Security Agreement,
any Mortgage or the Guaranty."
SUBPART 2.6. Amendments to Article X of the Existing Credit
Agreement. Article X of the Existing Credit Agreement ("The Agents") is amended
in accordance with Subpart 2.6.1.
SUBPART 2.6.1. Section 10.11(a) of the Existing Credit Agreement
("Collateral Matters") is amended by adding the words ", the Security Agreement,
the Mortgages" after the words "to take any action with respect to any
collateral security" in the third line thereof.
ARTICLE III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1. Second Amendment Effective Date. This Amendment, and
the amendments and modifications contained herein, shall be and become effective
on the date (the "Second Amendment Effective Date") when each of the conditions
set forth in this Article III shall have been fulfilled to the satisfaction of
the Administrative Agent.
SUBPART 3.2. Execution of Counterparts. The Administrative Agent
shall have received counterparts of this Amendment, duly executed and delivered
on behalf of the Borrower and each of the Majority Lenders.
SUBPART 3.3. Resolutions; Incumbency. The Administrative Agent shall
have received (i) copies of the resolutions of the board of directors of the
Borrower authorizing the execution, delivery and performance of this Amendment,
each other Loan Document to be delivered by the Borrower in connection herewith
and the transactions contemplated hereby and thereby, certified as of the Second
Amendment Effective Date by the Secretary or an Assistant Secretary of the
Borrower, together with a certificate of the Secretary or Assistant Secretary of
the Borrower dated the Second Amendment Effective Date, certifying the names and
true signatures of the officers of the Borrower authorized to execute, deliver
and perform, as applicable, this Amendment, and such other Loan Documents to be
delivered by it in connection herewith; and (ii) copies of the resolutions of
the board of directors of each Subsidiary authorizing the delivery, execution
and performance by such Subsidiary of the Loan
-14-
<PAGE> 15
Documents to be delivered by it in connection herewith, certified as of the
Second Amendment Effective Date by the Secretary or an Assistant Secretary of
such Subsidiary, together with a certificate of the Secretary or Assistant
Secretary of such Subsidiary dated the Second Amendment Effective Date,
certifying the names and true signatures of the officers of such Subsidiary
authorized to execute, deliver and perform such Loan Documents.
SUBPART 3.4. Organization Documents. The Administrative Agent shall
have received the articles or certificate of incorporation and the bylaws of
each of Obligors for which such documents have not previously been delivered and
certified, in each case, as in effect on the Second Amendment Effective Date,
certified by the Secretary or Assistant Secretary of such Person as of the
Second Amendment Effective Date, together with a certification that any
documents which were previously delivered are in full force and effect and have
not, since the date of such delivery, been amended.
SUBPART 3.5. Approvals. All necessary material governmental,
shareholders' and third-party approvals in connection with the execution,
delivery and performance of this Amendment and the other Loan Documents
delivered in connection herewith.
SUBPART 3.6. Other Loan Documents. The Administrative Agent shall
have received:
(a) (x) an affirmation and consent by each of the Guarantors
and (x) a supplement to the Guaranty to add one or more additional
Guarantors thereunder and, in the case of (x) and (y), confirming that
upon the sale or other disposition of any Guarantor thereunder in
accordance with the terms of the Amended Credit Agreement, such
Guarantor shall be automatically released from all obligations
thereunder to the extent that such sale or other disposition causes
such Guarantor to cease being a Domestic Subsidiary of the Borrower,
(b) a Pledge Agreement by the Borrower and each applicable
Domestic Subsidiary, together with (i) the certificates, evidencing
all of the issued and outstanding shares of capital stock of the
Subsidiary being pledged thereby and (ii) executed blank undated stock
powers, and
(c) a Security Agreement, executed by the Borrower and each
Domestic Subsidiary in favor of the Administrative Agent.
SUBPART 3.7. Filings. All UCC and intellectual property filings
necessary or, in the opinion of the Administrative Agent, desirable to perfect
and/or to maintain the perfection of the Liens (as defined in the Loan
Documents) provided for in the Loan Documents shall have been executed by the
Borrower and each applicable Subsidiary and delivered to the Administrative
Agent for filing at the Borrower's expense.
SUBPART 3.8. Amendment Effective Date Certificate. The
Administrative Agent shall have received, with counterparts for each Agent, the
Amendment Effective Date Certificate, dated the Second Amendment Effective Date
and duly executed and delivered by an Authorized Officer of the Borrower, in
which certificate the Borrower shall agree and acknowledge that the statements
made therein shall be deemed to be true and correct (in all material respects)
representations and warranties of the Borrower made as of such date, and, at the
time each such certificate is delivered, such statements shall in fact be true
and correct.
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<PAGE> 16
SUBPART 3.9. Legal Opinions. The Administrative Agent shall have
received a favorable legal opinion of (i) Simpson Thacher & Bartlett, special
counsel to the Obligors and (ii) the General Counsel to the Borrower, in each
case, addressed to the Administrative Agent and the Lenders and dated the Second
Amendment Effective Date, substantially in the forms of Annex A-1 and Annex A-2,
respectively.
SUBPART 3.10. Fees and Expenses. The Administrative Agent shall have
received all costs, fees (including, for each Lender party hereto, an amendment
fee equal to .25% of such Lender's Commitment) and expenses due and payable
pursuant to Subpart 5.4 (to the extent then invoiced) and pursuant to the
Existing Credit Agreement (including all previously invoiced fees and
expenses).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SUBPART 4.1. Representations and Warranties. In order to induce the
Lenders and the Administrative Agent to enter into this Amendment, the Borrower
hereby represents and warrants to each Agent and each Lender, as of the date
hereof, as follows:
(a) the representations and warranties contained in Article
VI of the Existing Credit Agreement (after giving effect to the
amendments set forth herein) and in each of the other Loan Documents
are true and correct in all material respects on and as of such date,
as though made on and as of such date (except to the extent such
representations and warranties expressly refer to an earlier date, in
which case they shall be true and correct in all material respects as
of such earlier date);
(b) no Default or Event of Default exists or would result
from the amendments or modifications set forth in Article II or the
other transactions contemplated hereby or from the grant or perfection
of the Lien of the Administrative Agent and the Lenders on the
collateral security provided under the Loan Documents delivered in
connection herewith;
(c) except as disclosed to the Lenders on March 23, 1998 or as
disclosed in the Bank Book, no Material Adverse Change has occurred
since September 30, 1997 and no material adverse change has occurred
since September 30, 1997 with respect to the business, assets,
operations, results of operations, condition (financial or otherwise)
or prospects of the Borrower or the Borrower and its Subsidiaries,
taken as a whole; and
(d) neither the Borrower nor any of its Subsidiaries is
subject to any material litigation or governmental proceeding with
respect to the transactions contemplated hereby and no injunction or
restraining order exists with respect to such transactions.
SUBPART 4.2. Full Disclosure. (a) All factual information (taken as
a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrower or any of its Subsidiaries in writing to any Agent and/or any Lender on
or before the Secondment Amendment Effective Date (including all information
contained herein and in the other Loan Documents delivered in connection
herewith) for purposes of or in connection with this Amendment or any
transactions contemplated herein is true and complete in all material respects
on the date as of which such information is dated or certified and not
-16-
<PAGE> 17
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided, it being understood and
agreed that for purposes of this clause (a), such factual information shall not
include projections and pro forma financial information.
(b) The projections and pro forma financial information contained in
the factual information referred to in clause (a) above were or are based on
good faith estimates and assumptions believed to be reasonable at the time
made, it being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ significantly from the
projected results.
ARTICLE V
MISCELLANEOUS
SUBPART 5.1. Full Force and Effect; Limited Amendment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants, conditions and other provisions of the Existing Credit Agreement and
the other Loan Documents shall remain unamended and unwaived and shall continue
to be, and shall remain, in full force and effect in accordance with their
respective terms. The amendments set forth herein shall be limited precisely as
provided for herein to the provisions expressly amended herein and shall not be
deemed to be an amendment to, consent to or modification of any other term or
provision of the Existing Credit Agreement, any other Loan Document referred to
therein or herein or of any transaction or further or future action on the part
of the Borrower or any other Obligor which would require the consent of the
Lenders under the Existing Credit Agreement or any of the other Loan Documents.
SUBPART 5.2. Loan Document Pursuant to Existing Credit Agreement.
This Amendment is a Loan Document executed pursuant to the Existing Credit
Agreement and shall be construed, administered and applied in accordance with
all of the terms and provisions of the Existing Credit Agreement (and, following
the date hereof, the Amended Credit Agreement). Any breach of any
representation or warranty or covenant or agreement contained in this Amendment
shall be deemed to be an Event of Default for all purposes of the Existing
Credit Agreement and the other Loan Documents.
SUBPART 5.3. Further Assurances. The Borrower hereby agrees that it
will take any action that from time to time may be reasonably necessary to
effectuate the agreements contemplated herein.
SUBPART 5.4. Fees and Expenses. The Borrower shall pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent in
connection with the preparation, negotiation, execution and delivery of this
Amendment and the documents and transactions contemplated hereby, including the
reasonable fees and disbursements of Mayer, Brown, and Platt, as counsel for the
Administrative Agent and of Wachtell, Lipton, Rosen & Katz, as counsel for the
Administrative Agent.
SUBPART 5.5. Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of this Amendment or any provisions hereof.
-17-
<PAGE> 18
SUBPART 5.6. Counterparts. This Amendment may be executed in any
number of separate counterparts, each of which, when so executed, shall be
deemed an original, and all of said counterparts taken together shall be deemed
to constitute but one and the same instrument.
SUBPART 5.7. Cross-References. References in this Amendment to any
Article or Subpart are, unless otherwise specified or otherwise required by the
context, to such Article or Subpart of this Amendment.
SUBPART 5.8. Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SUBPART 5.9. No Third Parties Benefited. This Amendment is made and
entered into for the sole protection and legal benefit of the Borrower, the
Lenders, each Agent and the Agent-Related Persons, and their permitted
successors and assigns, and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Amendment or any of the other Loan Documents.
SUBPART 5.10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
-18-
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
EVENFLO & SPALDING HOLDINGS
CORPORATION (formerly known as
E&S Holdings Corporation), as the Borrower
By ______________________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as
Administrative Agent
By ______________________________________
Name:
Title:
Lenders:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By ______________________________________
Name:
Title:
MERRILL LYNCH CAPITAL CORPORATION
By ______________________________________
Name:
Title:
<PAGE> 20
MERRILL LYNCH DEBT STRATEGY FUND
By ______________________________________
Name:
Title:
MERRILL LYNCH DEBT STRATEGY PORTFOLIO
By ______________________________________
Name:
Title:
NATIONSBANK N.A. SOUTH
By ______________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By ______________________________________
Name:
Title:
BANKERS TRUST COMPANY
By ______________________________________
Name:
Title:
<PAGE> 21
CITY NATIONAL BANK
By ______________________________________
Name:
Title:
FLEET NATIONAL BANK
By ______________________________________
Name:
Title:
SOCIETE GENERALE
By ______________________________________
Name:
Title:
WELLS FARGO BANK, N.A.
By ______________________________________
Name:
Title:
CIBC, INC.
By ______________________________________
Name:
Title:
ROYAL BANK OF CANADA
By ______________________________________
Name:
Title:
<PAGE> 22
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By ______________________________________
Name:
Title:
VAN KAMPEN AMERICAN CLO I LTD.
By ______________________________________
Name:
Title:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By ______________________________________
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By ______________________________________
Name:
Title:
LTCB TRUST COMPANY
By ______________________________________
Name:
Title:
<PAGE> 23
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By ____________________________________
Name:
Title:
OAK HILL SECURITIES FUND, L.P.
By Oak Hill Securities GenPar, L.P.,
its General Partner
By Oak Hill Securities MGP, Inc.,
its General Partner
By _____________________________
Name:
Title:
PRIME INCOME TRUST
By ______________________________________
Name:
Title:
AERIES FINANCE, LTD.
By ______________________________________
Name:
Title:
<PAGE> 24
ABN AMRO BANK N.V.
By ______________________________________
Name:
Title:
By ______________________________________
Name:
Title:
BANK OF TOKYO -- MITSUBISHI TRUST COMPANY
By ______________________________________
Name:
Title:
BANQUE PARIBAS
By ______________________________________
Name:
Title:
By ______________________________________
Name:
Title:
BAYBANK, N.A.
By ______________________________________
Name:
Title:
<PAGE> 25
CAPTIVA FINANCE, LTD.
By ______________________________________
Name:
Title:
CREDIT AGRICOLE INDOSUEZ
By ______________________________________
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By ______________________________________
Name:
Title:
CYPRESS TREE INVESTMENT MANAGEMENT CO.
By ______________________________________
Name:
Title:
THE DAI-ICHI KANGYO BANK, LTD.
By ______________________________________
Name:
Title:
<PAGE> 26
DLJ CAPITAL FUNDING, INC.
By ______________________________________
Name:
Title:
FIRST NATIONAL BANK OF BOSTON
By ______________________________________
Name:
Title:
GOLDMAN SACHS CREDIT PARTNERS L.P.
By ______________________________________
Name:
Title:
KZH HOLDING CORPORATION
By ______________________________________
Name:
Title:
LEHMAN SYNDICATED LOANS, INC.
By ______________________________________
Name:
Title:
<PAGE> 27
MEDICAL LIABILITY MUTUAL
By ______________________________________
Name:
Title:
MERRILL LYNCH CBO IV (CAYMAN) LTD.
By ______________________________________
Name:
Title:
MORGAN STANLEY SENIOR
FUNDING, INC.
By ______________________________________
Name:
Title:
NATIONAL CITY BANK
By ______________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By ______________________________________
Name:
Title:
OCTAGON LOAN TRUST
(a unit of Chase Manhattan Bank)
By ______________________________________
Name:
Title:
<PAGE> 28
ORIX USA CORPORATION
By ______________________________________
Name:
Title:
PAMCO CAYMAN, LTD.
By ______________________________________
Name:
Title:
ROYALTON COMPANY, LTD. (c/o Pacific
Investment Management Co.)
By ______________________________________
Name:
Title:
SENIOR DEBT PORTFOLIO
(c/o Boston Management and Research Co.)
By ______________________________________
Name:
Title:
<PAGE> 1
[EXECUTION COPY]
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of March 30, 1998, among EVENFLO
& SPALDING HOLDINGS CORPORATION, a Delaware corporation
("Holdings"), SPALDING & EVENFLO COMPANIES, INC., a Delaware
corporation (the "Borrower"), the undersigned Subsidiaries of
the Borrower (each a "Subsidiary Grantor" and collectively,
the "Subsidiary Grantors"; Holdings, the Borrower and the
Subsidiary Grantors, collectively, the "Grantors") and BANK OF
AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION ("BofA"), as
administrative agent (in such capacity, the "Administrative
Agent") for the lenders (the "Lenders") from time to time
parties to the Liquidity Facility dated as of March 30, 1998
(as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time, the
"Liquidity Facility"), among the Borrower, the Lenders,
Merrill Lynch Capital Corporation, as documentation agent (in
such capacity, the "Documentation Agent") for the Lenders,
NationsBank N.A. South, as syndication agent (in such
capacity, the "Syndication Agent") and the Administrative
Agent.
W I T N E S S E T H
WHEREAS, pursuant to the Liquidity Facility, the Lenders have
severally agreed to make Loans to the Borrower upon the terms and subject to
the conditions set forth therein;
WHEREAS, (a) Holdings owns 100% of the capital stock of the
Borrower, (b) each Subsidiary Grantor is a Subsidiary of the Borrower and (c)
Holdings and each Subsidiary Grantor has, pursuant to the Guaranty, guaranteed
to the Administrative Agent, for the ratable benefit of the Secured Parties and
their respective successors, endorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations;
WHEREAS, the proceeds of the Loans will be used in part to
enable the Borrower to make valuable transfers to the Subsidiary Grantors in
connection with the operation of their respective businesses;
WHEREAS, Holdings, the Borrower and the Subsidiary Grantors
are engaged in related businesses, and each Grantor will derive substantial
direct and indirect benefit from the making of the Loans; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower under the Liquidity
Facility that Holdings, the Borrower and the Subsidiary Grantors shall have
executed and delivered this Security Agreement to the Administrative Agent for
the ratable benefit of the Secured Parties;
NOW, THEREFORE, in consideration of the premises and to induce
the Secured Parties (as defined below) to enter into the Liquidity Facility and
to induce the Lenders to make their respective
<PAGE> 2
Loans, each of the Grantors hereby agrees with the Administrative Agent, for
the ratable benefit of the Secured Parties, as follows:
1. Defined Terms.
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Liquidity Facility and used herein shall have the meanings given
in the Liquidity Facility, and the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined: Chattel Paper, Farm Products, Instruments and
Investment property.
(b) The following terms shall have the following meanings:
"Accounts": with respect to each Grantor, any and all right,
title and interest of such Grantor to payment for goods and services
sold or leased, including any such right evidenced by Chattel Paper,
whether due or to become due, whether or not it has been earned or
performed, and whether now or hereafter acquired or arising in the
future, including, without limitation, accounts receivable from
Affiliates of such person, except to the extent that the grant of a
security interest in Accounts owed by Affiliates not incorporated or
otherwise organized in the United States of America would result in
material adverse tax or legal consequences to such Grantor.
"Accounts Receivable": with respect to each Grantor, all
right, title and interest of such Grantor to Accounts and all of its
right, title and interest in any returned goods, together with all
rights, titles, securities and guaranties with respect thereto,
including any rights to stoppage in transit, replevin, reclamation and
resales, and all related security interests, liens and pledges,
whether voluntary or involuntary in each case whether due or become
due, whether now or hereafter arising in the future.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by or is
under common control with, such Person. A Person shall be deemed
to control another Person if the controlling Person possesses,
directly or indirectly, the power (a) to vote 10% or more of the
securities having ordinary voting power for the election
of directors of such other Person or (b) to direct or cause the
direction of the management and policies of the other Person,
whether through the ownership of voting securities, membership
interests, by contract or otherwise.
"Agreement": this Security Agreement, as the same may be
amended, amended and restated, modified or otherwise supplemented
from time to time.
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 2.1 of this Agreement.
"Collateral Account": any collateral account established by
the Administrative Agent as provided in Section 5.3 or Section 7.2.
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<PAGE> 3
"Computer Hardware and Software Collateral" means
with respect to each Grantor, its interests in the following, in each
case to the extent the grant by such Grantor of a security interest
pursuant to this Agreement is not prohibited without the consent of
any other Person:
(a) all computer and other electronic data
processing hardware, integrated computer systems, central
processing units, memory units, display terminals, printers,
features, computer elements, card readers, tape drives, hard
and soft disk drives, cables, electrical supply hardware,
generators, power equalizers, accessories and all peripheral
devices and other related computer hardware;
(b) all software programs (including both source
code, object code and all related applications and data
files), whether now owned, licensed or leased or hereafter
acquired by each Grantor, designed for use on the computers
and electronic data processing hardware described in clause
(a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic
diagrams, manuals, guides and specifications) with respect to
such hardware, software and firmware described in the
preceding clauses (a) through (c); and
(e) all rights with respect to all of the foregoing,
including any and all copyrights, licenses, options,
warranties, service contracts, program services, test rights,
maintenance rights, support rights, improvement rights,
renewal rights and indemnifications and any substitutions,
replacements, additions or model conversions of any of the
foregoing.
"Contracts": with respect to each Grantor, all rights of such
Grantor under contracts and agreements to which such Grantor is a
party or under which such Grantor has any right, title or interest or
to which such Grantor or any property of such Grantor is subject, as
the same may from time to time be amended, supplemented or otherwise
modified, including, without limitation, (a) all rights of such
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (b) all rights of such Grantor to damages
arising out of, or for, breach or default in respect thereof and (c)
all rights of such Grantor to exercise all remedies thereunder, in
each case to the extent the grant by such Grantor of a security
interest pursuant to this Agreement in its rights under such contract
or agreement is not prohibited without the consent of any other
person, or is permitted with consent if all necessary consents to such
grant of a security interest have been obtained from all such other
persons.
"Copyright Collateral" means with respect to each Grantor, its
interests in the following, in each case to the extent the grant by
such Grantor of a security interest pursuant to this Agreement is not
prohibited without the consent of any other Person:
(a) all copyrights (including copyrights for
semi-conductor chip product mask works) of each Grantor,
whether statutory or common law, registered or unregistered,
now or hereafter in force throughout the world including,
without limitation, all of each Grantor's right, title and
interest in and to all copyrights and mask works registered in
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<PAGE> 4
the United States Copyright Office or anywhere else in the
world and also including, without limitation, the
copyrights and mask works referred to in Item A of Schedule IV
attached hereto, and all applications for registration thereof
(including pending applications), including the copyright and
mask works registrations and applications referred to in Item
A of Schedule IV attached hereto, if any, and all copyrights
resulting from such applications;
(b) all extensions and renewals of any of the items
described in clause (a);
(c) all copyright and mask works licenses and other
agreements providing each Grantor with the right to use any of
the items of the type referred to in clauses (a) and (b),
including each copyright license referred to in Item B of
Schedule IV attached hereto, if any;
(d) the right to sue third parties for past, present
and future infringements of any of the Copyright Collateral
referred to in clauses (a) and (b) and, to the extent
applicable, clause (c); and
(e) all proceeds of, and rights associated with, the
foregoing, including, without limitation, licenses, royalties,
income, payments, claims, damages and proceeds of infringement
suits and all rights corresponding thereto throughout the
world.
"Deposit Accounts" means any and all demand, time, savings,
passbook or other accounts with a bank or other financial institution.
"Documents": with respect to each Grantor, all Instruments,
files, records, ledger sheets and documents covering or relating to
any of the Accounts, Equipment, General Intangibles, Intellectual
Property, Inventory or Proceeds.
"Equipment": with respect to each Grantor, all equipment,
furniture and furnishings, tools, accessories, parts and supplies of
every kind and description, wherever located, now or hereafter
existing, and all improvements, accessions or appurtenances thereto,
including Fixtures, and all other tangible personal property whether
or not similar to any of the foregoing items which are now or
hereafter acquired by such Grantor.
"Fixtures": with respect to each Grantor, all items that
would otherwise constitute items of Collateral, whether now owned or
hereafter acquired, that become so related to particular real estate
that an interest in them arises under any real estate law applicable
thereto to the extent that a security interest therein may be
perfected by filing a financing statement in the applicable
jurisdiction set forth on Schedule I hereto.
"General Intangibles": with respect to each Grantor, as
defined in the Uniform Commercial Code in effect in the State of New
York on the date hereof to the extent, in the case of any General
Intangibles arising under any contract or agreement, that the grant by
such Grantor of a security interest pursuant to this Agreement in its
rights under such contract or agreement is not prohibited without the
consent of any other person, or is permitted with consent if all
necessary consents to such grant of a security interest have been
obtained from all such
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<PAGE> 5
other persons (it being understood that the foregoing shall not be
deemed to obligate such Grantor to obtain such consents), provided,
that the foregoing limitation shall not affect, limit, restrict or
impair the grant by such Grantor of a security interest pursuant to
this Agreement in any Account or General Intangible or any money or
other amounts due or to become due under any such contract or
agreement to the extent provided in Section 9-318 of the Code as in
effect on the date hereof, and provided, further, that "General
Intangibles" shall not include any of the items within Section 2.1(h)
herein and any General Intangibles owed by Affiliates not incorporated
or otherwise organized in the United States of America to the extent
that the grant of a security interest in such General Intangibles
would result in material adverse tax or legal consequences to such
Grantor.
"Indemnitee": the Secured Parties and their respective
officers, directors, trustees, affiliates and controlling persons.
"Intellectual Property Collateral" means, collectively, the
Computer Hardware and Software Collateral, the Copyright Collateral,
the Patent Collateral, the Trademark Collateral and the Trade Secrets
Collateral.
"Inventory": with respect to each Grantor, all right, title
and interest of such Grantor in and to goods intended for sale or
lease by such person, or consumed in such person's business
(including, without limitation, all operating parts and supplies),
together with all raw materials and finished goods, whether now owned
or hereafter acquired or arising.
"Junior Security Agreement": means the Security Agreement to
be executed by the Grantors in favor of BofA, as administrative agent
under, and for the ratable benefit of the administrative agent, the
documentation agent, the syndication agent, the swing line lender, the
fronting lender and the other lenders, in each case, parties to, the
Holdings Credit Agreement.
"Material Intellectual Property Collateral": means the
following Trademarks: Spalding, Top-Flite, Etonic, Evenflo, Snugli,
Gerry, Dudley, Strata and Hogan.
"Obligations": the collective reference to the unpaid
principal of and interest on the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or any Lender
(including, without limitation, interest accruing at the
then-applicable rate provided in the Liquidity Facility after the
maturity of the Loans and interest accruing at the then-applicable
rate provided in the Liquidity Facility after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether
or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter incurred, that may
arise under, out of, or in connection with, the Liquidity Facility,
the other Loan Documents or any other documents made, delivered or
given in connection therewith, whether on account of principal,
interest, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid by
Holdings, the Borrower or any Subsidiary Grantor pursuant to the terms
of the Liquidity Facility or any other Loan Document) and all
obligations of each Obligor (other than the Borrower) now or hereafter
existing under this Agreement and each other Loan Document to which it
is or may become a party.
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<PAGE> 6
"Patent Collateral" means with respect to each
Grantor, its interests owned in the following, in each case to the
extent the grant by such Grantor of a security interest pursuant to
this Agreement is not prohibited without the consent of any other
Person:
(a) all letters patent and applications for letters
patent throughout the world, including all patent applications
in preparation for filing anywhere in the world and including
each patent and patent application referred to in Item A of
Schedule V attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations
of any of the items described in clause (a);
(c) all patent licenses and other agreements
providing each Grantor with the right to use any of the items
of the type referred to in clauses (a) and (b), including each
patent license referred to in Item B of Schedule V attached
hereto;
(d) the right to sue third parties for past, present
or future infringements of any Patent Collateral described in
clauses (a) and (b) and, to the extent applicable, clause (c);
and
(e) all proceeds of, and rights associated with, the
foregoing (including license royalties and proceeds of
infringement suits), the right to sue third parties for past,
present or future infringements of any patent or patent
application, including any patent or patent application
referred to in Item A of Schedule V attached hereto, and for
breach or enforcement of any patent license, including any
patent license referred to in Item B of Schedule V attached
hereto, and all rights corresponding thereto throughout the
world.
"Person" means an individual, a partnership, a corporation, a
limited liability company, a business trust, a joint stock company, a
trust, an unincorporated association, a joint venture or
Governmental Authority.
"Proceeds": with respect to each Grantor, any consideration
received from the sale, exchange or other disposition of any asset or
property which constitutes Collateral, any value received as a
consequence of the possession of any Collateral and any payment
received from any insurer or other person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of
whatever nature of any asset or property which constitutes Collateral,
and shall include, without limitation, (a) all cash and negotiable
Instruments received or held on behalf of the Administrative Agent
pursuant to Section 5.3 and (b) any claim of such Grantor against a
third party for (and the right to sue and recover for and the rights
to damages or profits due or accrued arising out of or in connection
with) any and all amounts from time to time paid or payable under or
in connection with any of the Collateral.
"Secured Parties": (a) the Lenders, (b) the Administrative
Agent, (c) the Documentation Agent and (d) the Syndication Agent.
"Select Liens": means Liens permitted pursuant to
Section 8.1 of the Holdings Credit Agreement, incorporated by
reference in Article VIII of the Liquidity Facility, other than
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<PAGE> 7
Specified Liens and Liens permitted pursuant to Section 8.1(a)
of the Holdings Credit Agreement.
"Specified Equipment" means Equipment, the aggregate book
value of which does not exceed $100,000, consisting of certain
injection mold machinery.
"Specified Liens" means Liens permitted pursuant to Sections
8.1(b), (f), (h), (l), (q) and (r) of the Holdings Credit Agreement,
incorporated by reference in Article VIII of the Liquidity Facility,
which Liens do not as of the Closing Date, in the aggregate, secure
obligations valued in excess of $5,000,000.
"Subject IP Collateral" is defined in clause (a) of Section
3.7.
"Subsidiary": a Subsidiary incorporated or otherwise
organized in the United States of America.
"Trademark Collateral" means with respect to each Grantor, its
interests owned in the following, in each case to the extent the grant
by such Grantor of a security interest pursuant to this Agreement is
not prohibited without the consent of any other Person:
(a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names,
trade styles, trade dress, service marks, certification marks,
collective marks, logos, other source of business identifiers,
prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature
and designs (all of the foregoing items in this clause (a)
being collectively called a "Trademark"), now existing in the
United States or hereafter adopted or acquired in the United
States, and all registrations and recordings thereof and all
applications in connection therewith, including registrations,
recordings and applications in the United States Patent and
Trademarks Office, including those referred to in Item A of
Schedule VI attached hereto, and all renewals thereof;
(b) all Trademark licenses and other agreements
providing each Grantor with the right to use any items of the
type described in clause (a), including each Trademark license
referred to in Item B of Schedule VI attached hereto, and all
renewals thereof;
(c) all of the goodwill of the business connected
with the use of, and symbolized by the items described in,
clause (a);
(d) the right to sue third parties for past, present
and future infringements of any Trademark Collateral described
in clause (a) and, to the extent applicable, clause (b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by each Grantor against third
parties for past, present or future infringement or dilution
of any Trademark, Trademark registration or Trademark license,
including any Trademark, Trademark registration or Trademark
license referred to in Item A and Item B of Schedule VI
attached hereto, or for any injury to the goodwill associated
with the
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<PAGE> 8
use of any such Trademark or for breach or enforcement of any
Trademark license and all rights corresponding thereto
throughout the world.
"Trade Secrets Collateral" means with respect to each Grantor,
its interests in the following, in each case to the extent the grant
by such Grantor of a security interest pursuant to this Agreement is
not prohibited without the consent of any other Person: all common law
and statutory trade secrets and all other confidential or proprietary
or useful information (to the extent such confidential, proprietary or
useful information is protected by each Grantor against disclosure and
is not readily ascertainable) and all know-how obtained by or used in
or contemplated at any time for use in the business of each Grantor
(all of the foregoing being collectively called a "Trade Secret"),
whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying,
incorporating or referring in any way to such Trade Secret, all Trade
Secret licenses, including each Trade Secret license referred to in
Schedule VII attached hereto, and including the right to sue for and
to enjoin and to collect damages for the actual or threatened
misappropriation of any Trade Secret and for the breach or enforcement
of any such Trade Secret license.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section references are to this Agreement
unless otherwise specified. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation".
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
2. Security Interest.
2.1 Grant of Security Interest. As collateral security for
the prompt and complete payment and performance when due, whether at the stated
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise of the Obligations (including the payment of all amounts that
constitute part of the Obligations and would be owed by the Obligors to the
Administrative Agent or the Secured Parties under the Loan Documents but for
the fact that they are unenforceable or not allowable due to the existence of
an Insolvency Proceeding involving any such Obligor), each Grantor hereby
grants to the Administrative Agent, for the ratable benefit of the Secured
Parties, a first priority security interest in all of the following property
now owned or at any time hereafter acquired by such Grantor, subject only to
Liens permitted pursuant to Section 3.3 hereof (collectively, with respect to
each Grantor, the "Collateral"):
(a) all Accounts Receivable;
(b) all Contracts;
(c) all Documents;
(d) all Equipment;
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<PAGE> 9
(e) all General Intangibles;
(f) all Instruments;
(g) all Inventory;
(h) all Intellectual Property Collateral;
(i) all Investment property;
(j) all books and records pertaining to the Collateral;
(k) all other personal property in which a security interest
may be perfected by filing a financing statement in the applicable
jurisdictions set forth in Schedule I hereto; and
(l) to the extent not otherwise included, all Proceeds,
products, offspring, rents, issues, profits, returns and income of any and all
of the foregoing.
Notwithstanding anything contained in this Agreement or any Loan Document to
the contrary, "Collateral" shall not include any property of the type specified
in Sections 2.1(b), (d) (to the extent such Equipment constitutes Fixtures),
(e), (f), (g) and (h) if the granting of a Lien by such Grantor hereunder would
violate the terms of, or otherwise constitute a default under, any document or
instrument to which any Grantor is a party (other than those documents or
Instruments between or among any of the Grantors only) relating to the
ownership of, or pertaining to any rights or interests held in, such property.
Such security interests are granted as security only and shall
not subject any Secured Party to, or in any way alter or modify, any obligation
or liability of any Grantor with respect to or arising out of the Collateral.
2.2 Security Interest Absolute. All rights of the
Administrative Agent and the security interests granted to the Administrative
Agent hereunder, and all Obligations of the Grantors hereunder, shall be
absolute and unconditional, irrespective of
(a) any lack of validity or enforceability of the Liquidity
Facility, any Note or any other Loan Document,
(b) the failure of any Secured Party,
(i) to assert any claim or demand or to enforce any
right or remedy against the Borrower, any other Obligor or any
other Person under the provisions of the Liquidity Facility,
any Note, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any
guarantor of, or collateral securing, any Obligations,
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations or any other
extension, compromise or renewal of any Obligation,
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<PAGE> 10
(d) any reduction, limitation, impairment or termination of
any Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and each Grantor hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Obligations or otherwise,
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to or departure from, any of the terms
of the Liquidity Facility, any Note or any other Loan Document,
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Obligations, or
(g) any other circumstances which might otherwise constitute
a defense available to, or a legal or equitable discharge of, the
Borrower, any other Obligor, any surety or any guarantor.
2.3 Postponement of Subrogation, etc. No Grantor will
exercise any rights which it may acquire by reason of any payment made
hereunder, whether by way of subrogation, reimbursement or otherwise, until the
prior payment, in full and in cash, of all Obligations, the irrevocable
termination of all Commitments. Any amount paid to a Grantor on account of any
payment made hereunder prior to the payment in full in cash of all Obligations
and the irrevocable termination of all Commitments shall be held in trust for
the benefit of the Secured Parties and shall immediately be paid to the Secured
Parties and credited and applied against the Obligations, whether matured or
unmatured, in accordance with the terms of Section 7.3; provided, however, that
if
(a) any Grantor has made payment to the Secured Parties of
all or any part of the Obligations, and
(b) all Obligations have been paid in full in cash, all
Commitments have been irrevocably terminated,
each Secured Party agrees that, at such Grantor's request and expense, the
Secured Parties will execute and deliver to the applicable Grantor appropriate
documents (without recourse and without representation or warranty) necessary
to evidence the transfer by subrogation to such Grantor of an interest in the
Obligations resulting from such payment by such Grantor. In furtherance of the
foregoing, for so long as any Obligations remain outstanding or Commitments
remain outstanding, each Grantor shall refrain from taking any action or
commencing any proceeding against the Borrower or any other Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in respect of payments made under this
Agreement to any Secured Party.
3. Representations and Warranties. Each Grantor hereby
represents as follows:
3.1 Title; No Other Liens. Except for the security interest
granted to the Administrative Agent for the ratable benefit of the Secured
Parties pursuant to this Agreement and any other Liens permitted to exist
pursuant to the Liquidity Facility, if any (the "Permitted Liens"), each
Grantor owns each item of the Collateral free and clear of any and all Liens or
claims of others. No security agreement,
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<PAGE> 11
financing statement or other public notice with respect to all or any part of
such Collateral is on file or of record in any public office, except such as
have been filed, pursuant to this Agreement, in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties, or in respect of
Permitted Liens.
3.2 Authority. Each Grantor has full power and authority to
grant to the Administrative Agent the security interest in the Collateral
pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of
any other person other than any consent or approval that has been obtained.
3.3 Enforceable Obligation; Perfected, First Priority
Security Interests. This Agreement constitutes a legal, valid and binding
obligation of each Grantor, enforceable against such Grantor in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting creditors' rights
generally and except as enforceability may be limited by general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law), and the security interests granted pursuant to this
Agreement (a) upon-completion of the filings and other actions specified in
Schedule I hereto shall constitute perfected security interests in the
Collateral (other than as to the Specified Equipment) in favor of the
Administrative Agent for the ratable benefit of the Secured Parties, and (b)
are prior to all other Liens on the Collateral in existence on the date hereof,
except for any Specified Liens and Select Liens.
3.4 Inventory and Equipment. The Inventory and the Equipment
owned by such Grantor are kept at the locations listed in Schedule II hereto,
which shall be updated from time to time in accordance with Section 4.5 of this
Agreement, or at such other locations as shall be permitted by Section 4.4.
3.5 Chief Executive Office. As of the Closing Date, each
Grantor's chief executive office and chief place of business is located at the
location under its signature set forth below.
3.6 Intentionally Omitted.
3.7 Intellectual Property Collateral. With respect to any
Material Intellectual Property Collateral maintained in the United States and
any other market material to the Borrower's and its Subsidiaries' businesses,
each Grantor has kept such Material Intellectual Property Collateral registered
with the applicable federal, state or foreign authority, as the case may be,
with an appropriate notice of such registration and has taken all reasonable
steps to maintain such Material Intellectual Property Collateral and any and
all rights with respect thereto and has not abandoned, or permitted to become
unenforceable, any Material Intellectual Property Collateral, in each case,
except where the same could not reasonably be expected to have a Material
Adverse Effect. No consent of any other Person is required in order for any
Grantor to grant a first priority security interest in the Material
Intellectual Property Collateral to the Administrative Agent pursuant to this
Agreement.
4. Covenants. Each Grantor covenants and agrees with the
Secured Parties that, from and after the date of this Agreement until (a) the
payment in full in cash of all Obligations, (b) this Agreement is terminated
and the security interests created hereby are released and (c) all Commitments
are terminated, such Grantor will perform, comply with and be bound by the
obligations set forth in this Section:
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<PAGE> 12
4.1 Delivery of Instruments and Chattel Paper. If an Event
of Default shall have occurred and be continuing and if any amount payable
under or in connection with any of the Collateral owned by such Grantor shall
be or become evidenced by any promissory note, other instrument or Chattel
Paper, upon the request of the Administrative Agent, such promissory note,
instrument or Chattel Paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner reasonably satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement.
4.2 Maintenance of Insurance. Each Grantor shall maintain
insurance policies in accordance with the requirements of Section 7.1 of the
Liquidity Facility. Within thirty (30) days of the date hereof, the Borrower
shall provide the Administrative Agent with a certificate of the Secretary or
Assistant Secretary of the Borrower setting forth the nature and extent of all
insurance maintained by the Borrower and its Subsidiaries, which certificate
shall also indicate where appropriate any such insurance policy for which the
Administrative Agent is named as "loss payee" or "additional insured", in
accordance with customary practice for transactions of this type, in each case,
as reasonably satisfactory to the Administrative Agent and as customary for
transactions of this type.
4.3 Maintenance of Perfected Security Interest; Further
Documentation. (a) Each Grantor shall cause all filings and other actions
listed in Schedule I to be taken. Each Grantor shall maintain the security
interests created by this Agreement as first, perfected security interests
subject only to Liens permitted pursuant to Section 3.3 hereof, and shall
defend such security interests against all claims and demands of all persons
whomsoever (other than those pursuant to Liens permitted pursuant to Section
3.3 hereof).
(b) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of a Grantor, such
Grantor shall 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 Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements
under the Uniform Commercial Code in effect in any jurisdiction with respect to
the security interests created hereby.
4.4 Changes in Locations, Name, etc. A Grantor shall not,
except (x) upon ten (10) days' prior written notice to the Administrative Agent
and delivery to the Administrative Agent of a written supplement to Schedule II
showing the additional location or locations at which Inventory or Equipment
shall be kept, and (y) if filings under the Code or otherwise have been made
which maintain in favor of the Administrative Agent a valid, legal and
perfected security interest in the Collateral subject to no Liens, other than
Liens permitted pursuant to Section 3.3 hereof,
(a) permit any of the Inventory or Equipment to be kept at a
location other than those listed in Schedule II hereto, except for
Inventory and Equipment (i) in transit between locations described in
this paragraph (a), (ii) in transit as part of a delivery to a
purchaser thereof, (iii) as to Specified Equipment only, when, as part
of such Grantor's ordinary course of business, such Specified
Equipment is located in jurisdictions where no financing statement in
favor of the Administrative Agent has been duly filed, or (iv)
transferred to a Foreign Subsidiary in a transaction, in each case, as
permitted by the Liquidity Facility;
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(b) change the location of its chief executive office and
chief place of business from that specified in Section 3.5; or
(c) change its (i) corporate name or any trade name used to
identify it in its conduct of business or in the ownership of its
properties, (ii) identity or (iii) corporate structure to such an
extent that any financing statement filed in favor of the
Administrative Agent in connection with this Agreement would become
seriously misleading.
4.5 Further Identification of Collateral. Each Grantor shall
furnish to the Administrative Agent from time to time statements and schedules
further identifying and describing the Collateral and, subject to Section 4.9
hereof, Deposit Accounts, and such other reports in connection with such
Collateral and Deposit Accounts as the Administrative Agent may reasonably
request, all in reasonable detail.
4.6 Notices. A Grantor shall advise the Administrative Agent
promptly in reasonable detail, at its address set forth pursuant to Section
11.2 of the Liquidity Facility of:
(a) any Lien (other than security interests created hereby or
Permitted Liens) on, any material portion of the Collateral;
(b) the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the security interests created
hereby or on the aggregate value of (i) the Collateral and (ii) all other
Collateral (as such term is defined in the Pledge Agreements) of Holdings, the
Borrower and its Subsidiaries taken as a whole; and
(c) the changing of the location of any Deposit Account and
the creation of a new, and the closing of a theretofore existing, Deposit
Account.
4.7 Administrative Agent's Liabilities and Expenses;
Indemnification. (a) Notwithstanding anything to the contrary provided
herein, the Administrative Agent assumes no liabilities with respect to any
claims regarding each Grantor's ownership (or purported ownership) of, or
rights or obligations (or purported rights or obligations) arising from, the
Collateral or any use (or actual or alleged misuse) whether arising out of any
past, current or future event, circumstance, act or omission or otherwise, or
any claim, suit, loss, damage, expense or liability of any kind or nature
arising out of or in connection with the Collateral or the production,
marketing, delivery, sale or provision of goods or services under or in
connection with any of the Collateral. All of such liabilities shall, as
between the Administrative Agent and the Grantors, be borne exclusively by the
Grantors.
(b) Each Grantor hereby agrees to pay all expenses of the
Administrative Agent and to indemnify the Administrative Agent with respect to
any and all losses, claims, damages, liabilities and related expenses in
respect of this Agreement or the Collateral in each case to the extent the
Borrower is required to do so pursuant to Section 10.7 of the Liquidity
Facility.
(c) Any amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the Pledge Agreements. Without
prejudice to the survival of any other agreements contained herein, all
indemnification and reimbursement obligations contained herein shall survive
the
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<PAGE> 14
payment in cash in full of the principal and interest under the Liquidity
Facility and the termination of the Commitments or this Agreement.
4.8 Use and Disposition of Collateral. A Grantor shall not
(a) make or permit to be made an assignment, pledge or hypothecation of the
Collateral, and shall grant no other security interest in such Collateral
(other than (i) pursuant hereto, (ii) any Permitted Liens or (iii) pursuant to
the Junior Security Agreement) or (b) make or permit to be made any transfer of
such Collateral, and shall remain at all times in possession thereof other than
transfers to the Administrative Agent pursuant to the provisions hereof;
notwithstanding the foregoing, such Grantor may use and dispose of such
Collateral in any lawful manner not in violation of the provisions of this
Agreement, the Liquidity Facility or any other Loan Document, unless the
Administrative Agent shall, after an Event of Default shall have occurred and
during the continuance thereof, notify such Grantor not to sell, convey, lease,
assign, transfer or otherwise dispose of any such Collateral other than
Inventory in the ordinary course of business and other than any other transfers
between the Grantors.
4.9 Deposit Accounts. Within thirty (30) days of the date
hereof, the Borrower shall provide the Administrative Agent with a schedule
(which schedule shall (x) be delivered to the Administrative Agent for
safekeeping purposes only, and (y) not be delivered to the Lenders except upon
their written request therefor in connection with the exercise of rights and
remedies pursuant to this Agreement), substantially in the form of Schedule
VIII hereto, which schedule shall identify all Deposit Accounts owned by the
Grantors and the financial institutions and the locations where such Deposit
Accounts are maintained, which schedule shall be updated from time to time in
accordance with Sections 4.5 and 4.6 of this Agreement. Subject to, and
without limiting the effect of, Section 7.2, following the occurrence and
continuance of an Event of Default and at the direction of the Majority
Lenders, each Grantor shall make its reasonable best efforts to maintain each
of its Deposit Accounts pursuant to a deposit account agreement which is in all
respects satisfactory to the Administrative Agent and which provides, among
other things, that (a) until the deposit account bank shall have received
written notice from the Administrative Agent pursuant to this clause, the
deposit account bank will make all payments from the Deposit Account as
specified by the applicable Grantor, and, after any such notice, the deposit
account bank will make all payments from such Deposit Account to the
Administrative Agent for credit to the Collateral Account, (b) the deposit
account bank (if other than the Administrative Agent or a Lender) waives all
setoff rights (other than setoff rights for reasonable and customary account
service charges and fees and amounts based on items that are dishonored by the
payor thereof and returned to the deposit account bank), and (c) such deposit
account agreement may not be amended without the written consent of the
Administrative Agent. The Administrative Agent will not give the notice
referred to in the preceding clause (a) unless it has given, or is
contemporaneously giving, notice pursuant to Section 7.2. In the event that a
deposit account bank refuses to enter into a deposit account agreement in
accordance with the above listed terms within thirty (30) days of a Grantor's
request, the Administrative Agent shall have the right to direct each Grantor
to transfer the assets in that deposit account to a bank which will enter into
a deposit account agreement in accordance with the above listed terms.
4.10 As to Intellectual Property Collateral. With respect to
any Material Intellectual Property Collateral maintained in the United States
and any other market material to the Borrower's and its Subsidiaries'
businesses, each Grantor covenants and agrees to keep such Material
Intellectual Property Collateral registered with the applicable federal, state
or foreign authority, as the case may be, with an appropriate notice of such
registration and covenants and agrees to take all reasonable steps to maintain
such Material Intellectual Property Collateral and any and all rights with
respect thereto and
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<PAGE> 15
will not abandon, or permit to become unenforceable, any Material Intellectual
Property Collateral, in each case, except where the same could not reasonably
be expected to have a Material Adverse Effect. If any Grantor shall own any
Intellectual Property, such Grantor shall execute and deliver to the
Administrative Agent any documents required to acknowledge or register or
perfect the Administrative Agent's interest in any part of the Intellectual
Property Collateral.
5. Provisions Relating to Accounts.
5.1 Grantors Remain Liable under Accounts. Anything herein
to the contrary notwithstanding, a Grantor shall remain liable under each of
the Accounts 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. No Secured Party shall have
any obligation or liability under any Account (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any Secured Party of any payment relating to such
Account pursuant hereto, nor shall any Secured Party be obligated in any manner
to perform any of the obligations of a Grantor under or pursuant to any Account
(or any agreement giving rise thereto), to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party under any Account (or any
agreement giving rise thereto), to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
5.2 Analysis of Accounts. The Administrative Agent shall
have the right upon the occurrence and during the continuance of an Event of
Default to make test verifications of the Accounts in any manner and through
any medium that it considers reasonably advisable, and each Grantor shall
furnish all such assistance and information as the Administrative Agent may
reasonably require in connection with such test verifications. At any time and
from time to time upon the occurrence and during the continuance of an Event of
Default, upon the Administrative Agent's reasonable request and at the expense
of each Grantor, each Grantor shall cause independent public accountants or
others reasonably 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. Upon the occurrence
and during the continuance of an Event of Default, the Administrative Agent in
its own name or in the name of others may communicate with account debtors on
the Accounts to verify with them to the Administrative Agent's reasonable
satisfaction the existence, amount and terms of any Accounts.
5.3 Collections on Accounts. (a) The Administrative Agent
hereby authorizes each Grantor to collect the Accounts, and the Administrative
Agent may curtail or terminate said authority at any time after the occurrence
and during the continuance of an Event of Default. If required by the
Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Accounts, when collected by
a Grantor during the continuance of such Event of Default, (i) shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Administrative Agent if required, in a Collateral Account maintained under the
sole dominion and control of and on terms and conditions reasonably
satisfactory to the Administrative Agent, subject to withdrawal by the
Administrative Agent as provided in Section 7.3, and (ii) until so turned over,
shall be held by such Grantor in trust for the Secured Parties, segregated from
other funds of such Grantor.
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<PAGE> 16
(b) At the Administrative Agent's reasonable request after
the occurrence and during the continuance of an Event of Default, each Grantor
shall deliver to 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.
5.4 Representations and Warranties. As of the Closing Date,
the place where each Grantor keeps its records concerning its Accounts is at
the location listed in Schedule III hereto.
5.5 Covenants. (a) The amount represented by each Grantor
to the Secured Parties from time to time as owing by each account debtor or by
all account debtors in respect of the Accounts shall at such time be in all
material respects the correct amount actually owing by such account debtor or
debtors thereunder.
(b) Upon the occurrence and during the continuance of an
Event of Default, a Grantor shall not grant any extension of the time of
payment of any of the Accounts Receivable, compromise, compound or settle the
same for less than the full amount thereof, release, wholly or partly, any
person liable for the payment thereof, or allow any credit or discount
whatsoever thereon other than in the ordinary course of such Grantor's
business, in each case if the Administrative Agent has instructed such Grantor
not to do so.
(c) Unless a Grantor shall deliver ten (10) days' prior
written notice identifying the change of location for its books and records,
such Grantor shall not remove its books and records from the location specified
in Section 5.4.
6. Provisions Relating to Contracts.
6.1 Grantors Remain Liable Under Contracts. Anything herein
to the contrary notwithstanding, each Grantor shall remain liable under each
Contract to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of such Contract. No Secured Party shall have any
obligation or liability under any Contract by reason of or arising out of this
Agreement or the receipt by any such Secured Party of any payment relating to
such Contract pursuant hereto, nor shall any Secured Party be obligated in any
manner to perform any of the obligations of a Grantor 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 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.
6.2 Communication With Contracting Parties. Upon the
occurrence and during the continuance of an Event of Default, the
Administrative Agent in its own name or in the name of others may communicate
with parties to the Contracts to verify with them to the Administrative Agent's
satisfaction the existence, amount and terms of any Contracts.
7. Remedies.
7.1 Notice to Account Debtors and Contract Parties. Upon the
request of the Administrative Agent at any time after the occurrence and during
the continuance of an Event of Default,
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a Grantor 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 Secured Parties and that
payments in respect thereof during the continuance of such an Event of Default
shall be made directly to the Administrative Agent.
7.2 Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Administrative Agent and the Secured Parties
specified in Section 5.3 with respect to payments of Accounts, if an Event of
Default shall occur and be continuing all Proceeds received by a Grantor
consisting of cash, checks and other near-cash items shall upon the
Administrative Agent's request be held by such Grantor in trust for the Secured
Parties, segregated from other funds of such Grantor, and shall, upon the
Administrative Agent's request (it being understood that the exercise of
remedies by the Secured Parties in connection with an Event of Default under
Sections 9.1(f) or (g) of the Liquidity Facility, shall be deemed to constitute
a request by the Administrative Agent for the purposes of this sentence)
forthwith upon receipt by such Grantor, be turned over to the Administrative
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Administrative Agent, if required) and held by the Administrative Agent
in a Collateral Account maintained under the sole dominion and control of the
Administrative Agent and on terms and conditions reasonably satisfactory to the
Administrative Agent. All Proceeds while held by the Administrative Agent in a
Collateral Account (or by such Grantor in trust for the Administrative Agent
and the Secured Parties) shall subject to Section 7.3 continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 7.3.
7.3 Application of Proceeds. If an Event of Default shall
have occurred and be continuing, and the Administrative Agent shall have
requested that a Grantor take any action set forth in Section 5.3(a) or 7.2 or
the Administrative Agent shall have taken any action pursuant to Section 7.4,
the Administrative Agent shall apply the proceeds as follows:
First, to the payment of the reasonable costs and expenses of
the Administrative Agent as set forth in Sections 7.4 and 15;
Second, to the payment of all amounts of the Obligations owed
to the Secured Parties in respect of Loans made by them, pro rata as
among the Secured Parties in accordance with the amount of such
Obligations owed to them;
Third, to the payment and discharge in full of the Obligations
(other than those referred to above), pro rata as among the Secured
Parties in accordance with the amount of such Obligations owed to
them; and
Fourth, after payment in full of all obligations, to the
applicable Grantor, or its successors or assigns, or to whomsoever may
be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, any Collateral then remaining.
7.4 Code Remedies. If an Event of Default shall have
occurred and be continuing, the Administrative Agent, on behalf of the Secured
Parties may exercise, in addition to all other rights and remedies granted to
them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the Code (whether or not, because of the jurisdiction of the
Collateral, the Code applies to the applicable
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Collateral). 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 a Grantor or any other person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give an 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 any Secured Party 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. Any Secured Party shall have the right upon any such public sale
or sales, and, to the extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of (to
the extent permitted by law) any right or equity of redemption in a Grantor,
which right or equity is hereby, to the extent permitted by law, waived or
released. Each Grantor 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
Grantor's premises or elsewhere. The Administrative Agent shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all reasonable costs and expenses incurred therein or
incidental to the care or safekeeping of any of such Collateral or reasonably
relating to such Collateral or the rights of the Administrative Agent and the
Secured Parties hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of the Obligations,
in accordance with Section 7.3, 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(l)(c) of the
Code, need the Administrative Agent account for the surplus, if any, to such
Grantor. If any notice of a proposed sale or other disposition of such
Collateral shall be required by law, such notice shall be in writing and deemed
reasonable and proper if given at least ten (10) days before such sale or other
disposition. The Administrative Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
The Administrative Agent shall have absolute discretion as to
the time of application of any such proceeds, money or balances in accordance
with this Agreement. Upon any sale of the Collateral by the Administrative
Agent (including pursuant to a power of sale granted by statute or under a
judicial proceeding), the receipt of the Administrative Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Administrative Agent or such officer or be answerable in any way for the
misapplication thereof.
7.5 Waiver; Deficiency. Each Grantor waives and agrees not
to assert any rights or privileges it may acquire under Section 9-112 of the
Code. Each Grantor 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 reasonable fees and disbursements of any attorneys employed
by any Secured Party to collect such deficiency.
8. Administrative Agent's Appointment as Attorney-in-Fact;
Administrative Agent's Performance of Grantors' Obligations.
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8.1 Powers. Each Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, during the continuance of an Event of Default, as its
true and lawful attorney-in-fact, with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name from time to time in the Administrative Agent's discretion, for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement,
and, without limiting the generality of the foregoing, such Grantor hereby
gives the Administrative Agent the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, to do the following upon the
occurrence and during the continuance of an Event of Default:
(a) in the name of such Grantor or its own name, or
otherwise, to take possession of and indorse 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 money due under any
Account, Instrument, General Intangible or Contract or with respect to
any other Collateral whenever payable;
(b) to pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral (other than Permitted Liens), to
effect any repairs or any insurance called for by the terms of this
Agreement and to pay all or any part of the premiums therefor and the
costs thereof,
(c) to execute, in connection with any sale provided for in
Section 7.4 hereof, any endorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(d) (i) 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; (ii) to ask or demand for, collect,
receive payment of and receipt for, any and all money, claims and
other amounts due or to become due at any time in respect of or
arising out of any Collateral; (iii) 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; (iv) 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; (v) to defend any suit, action or proceeding brought
against any Grantor with respect to any Collateral; (vi) to settle,
compromise or adjust any such suit, action or proceeding and, in
connection therewith, to give such discharges or releases as the
Administrative Agent may deem appropriate; and (vii) generally, to
use, 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 at
the expense of such Grantor, at any time, or from time to time, all
acts and things which the Administrative Agent reasonably deems
necessary to protect, preserve or realize upon such Collateral and the
Administrative Agent's and the Secured Parties' security interests
therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.
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8.2 Performance by Administrative Agent of Grantor's
Obligations. If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation to do so, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
8.3 Grantor's Reimbursement Obligation. The expenses of the
Administrative Agent reasonably incurred in connection with actions undertaken
as provided in this Section 8, together with interest thereon at a rate per
annum equal to the default rate of interest set forth in Section 2.8(c) of the
Liquidity Facility, from the date payment is demanded by the Administrative
Agent to the date reimbursed by such Grantor, shall be payable by the Borrower
to the Administrative Agent on demand.
8.4 Ratification; Power Coupled With An Interest. Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof. All powers, authorizations and agencies contained in
this Agreement are coupled with an interest and are irrevocable until this
Agreement is terminated and the security interests created hereby are released.
9. Duty of Administrative Agent. The Administrative Agent's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar property for its own account. No Secured Party nor any of its
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 a Grantor or any other person or to take any
other action whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the Secured Parties hereunder are solely to protect the
Secured Parties' interests in the Collateral and shall not impose any duty upon
any Secured Party to exercise any such powers. The Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or wilful misconduct.
10. Execution of Financing Statements. Pursuant to Section
9-402 of the Code, each Grantor authorizes the Administrative Agent to file
financing statements with respect to the Collateral without the signature of
such Grantor in such form and in such filing offices as the Administrative
Agent reasonably determines appropriate to perfect the security interests of
the Administrative Agent under this Agreement. A carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement for
filing in any jurisdiction.
11. Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the other Secured Parties, be governed by the
Liquidity Facility 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 Grantors, the Administrative Agent shall be conclusively presumed to be
acting as agent for the other Secured Parties with full and valid authority so
to act or refrain from acting.
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12. Reinstatement. This Agreement 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 Secured Party upon the
filing or commencement of any Insolvency Proceeding in respect of any Grantor,
or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, such Grantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
13. Notices. All notices, requests and demands to or upon
the Secured Parties or the Grantors under this Agreement shall be given or made
in accordance with Section 11.2 of the Liquidity Facility and addressed as
follows:
(a) if to any Grantor other than the Borrower, in care of the
Borrower in accordance with Section 11.2 of the Liquidity Facility;
(b) if to the Borrower, in accordance with Section 11.2 of
the Liquidity Facility; and
(c) if to any Secured Party, in accordance with Section 11.2
of the Liquidity Facility.
14. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Secured Parties and shall survive the making by
the Lenders of the Loans, the execution and delivery to the Lenders of the Loan
Documents, regardless of any investigation made by the Secured Parties or on
their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan, or any fee or any other
amount payable under or in respect of this Agreement or any other Loan Document
is outstanding and unpaid and so long as the Commitments have not been
terminated.
15. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 15.
16. Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the
- 21 -
<PAGE> 22
other Loan Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any Grantor or any
Secured Party may otherwise have to bring any action or proceeding relating to
this Agreement or the other Loan Documents against any Grantor or any Secured
Party or its properties in the courts of any jurisdiction.
(b) Each Grantor and each Secured Party hereby irrevocably
and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or the other Loan Documents in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 13. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
17. Release. (a) Unless the Grantors and the Administrative
Agent otherwise agree, this Agreement and the security interest created
hereunder shall terminate when all Obligations have been fully and indefeasibly
paid in full in cash and when the Secured Parties have no further Commitments
under the Liquidity Facility, at which time the Administrative Agent shall
execute and deliver to each Grantor, or to such person or persons as such
Grantor shall reasonably designate, all at such Grantor's sole expense, all
Uniform Commercial Code termination statements and similar documents prepared
by such Grantor which such Grantor shall reasonably request to evidence such
termination. Any execution and delivery of termination statements or documents
pursuant to this Section 17(a) shall be without recourse to or warranty by the
Administrative Agent.
(b) All Collateral used, sold, transferred or otherwise
disposed of, in accordance with the terms of the Liquidity Facility (including
pursuant to a waiver or amendment of the terms thereof) shall be used, sold,
transferred or otherwise disposed of free and clear of the Lien and the
security interest created hereunder. In connection with the foregoing, (i) the
Administrative Agent shall execute and deliver to each Grantor, or to such
person or persons as such Grantor shall reasonably designate, all at such
Grantor's sole expense, all Uniform Commercial Code termination statements and
similar documents prepared by such Grantor which such Grantor shall reasonably
request to evidence the release of the Lien and security interest created
hereunder with respect to such Collateral and (ii) any representation, warranty
or covenant contained herein relating to such Collateral shall no longer be
deemed to be made with respect to such used, sold, transferred or otherwise
disposed Collateral.
18. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. The parties hereunder
shall endeavor in good-faith negotiations to replace the invalid,
- 22 -
<PAGE> 23
illegal or unenforceable provisions with valid provisions, the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
19. Amendments in Writing; No Waiver; Cumulative Remedies.
19.1 Amendments in Writing. None of the terms or provisions
of this Agreement may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by the Grantors and the Administrative
Agent (on behalf of the Lenders or the Majority Lenders, as the case may be).
19.2 No Waiver by Course of Conduct. No Secured Party shall
by any act (except by a written instrument pursuant to Section 19.1 hereof) or
delay 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, nor any delay in
exercising, on the part of any Secured Party, 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 any Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which such
Secured Party would otherwise have on any future occasion.
20. Remedies Cumulative. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
21. Section Headings. The section and Section headings used
in this Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
22. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of each Grantor and the Secured Parties and their successors and assigns,
provided that this Agreement may not be assigned by any Grantor without the
prior written consent of the Administrative Agent.
23. Loan Document, etc. This Agreement is a Loan Document
executed pursuant to the Liquidity Facility and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions of the Liquidity Facility.
24. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
25. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract.
26. Additional Grantors. Pursuant to the Liquidity Facility,
each Subsidiary that was not in existence or not a Subsidiary on the date
thereof is required to enter into this Agreement as a Grantor upon becoming a
Subsidiary. Upon execution and delivery, after the date hereof, by the
- 23 -
<PAGE> 24
Administrative Agent and such Subsidiary of an instrument in the form of Annex
1, such Subsidiary shall become a Grantor hereunder with the same force and
effect as if originally named as a Grantor hereunder. The execution and
delivery of any such instrument shall not require the consent of any Grantor
hereunder. The rights and obligations of each Grantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Grantor as a
party to this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 24 -
<PAGE> 25
IN WITNESS WHEREOF, the undersigned have caused this Security
Agreement to be duly executed and delivered as of the date first above written.
EVENFLO & SPALDING HOLDINGS
CORPORATION
SPALDING & EVENFLO COMPANIES, INC.
EVENFLO COMPANY, INC.
ETONIC WORLDWIDE CORPORATION
LISCO, INC.
S&E FINANCE CO., INC.
SPALDING SPORTS CENTERS, INC.
ETONIC LISCO, INC.
LISCO FURNITURE, INC.
LISCO FEEDING, INC.
LISCO SPORTS, INC.
By: ______________________________
Name: W. Michael Kipphut
Title: Treasurer and
Vice President
S&E FINANCE CO., INC.
By: ______________________________
Name: Paul L. Whiting
Title: President and CEO
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
as Administrative Agent
By: ______________________________
Name:
Title:
<PAGE> 26
Schedules:
Schedule I Filings and Other Actions Required to Perfect Security
Interests
Schedule II Inventory and Equipment
Schedule III Records of Accounts
Schedule IV Copyrights and Mask Works
Schedule V Patents
Schedule VI Trademarks
Schedule VII Trade Secrets
Schedule VIII Deposit Accounts
<PAGE> 27
SCHEDULE I
TO SECURITY AGREEMENT
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
Name of Grantor Filing Jurisdiction
--------------- -------------------
<PAGE> 28
SCHEDULE II
TO SECURITY AGREEMENT
INVENTORY AND EQUIPMENT LOCATIONS
Name of Grantor Location
--------------- --------
<PAGE> 29
SCHEDULE III
TO SECURITY AGREEMENT
RECORDS OF ACCOUNTS
Name of Grantor Location
--------------- --------
<PAGE> 30
SCHEDULE IV
TO SECURITY AGREEMENT
Item A. Copyrights/Mask Works
Registered Copyrights/Mask Works
--------------------------------
<TABLE>
<CAPTION>
Grantor Registration No. Registration Date Author(s) Title
- ------- ---------------- ----------------- --------- -----
<S> <C> <C> <C> <C>
</TABLE>
Copyright/Mask Work Pending Registration Applications
-----------------------------------------------------
<TABLE>
<CAPTION>
Grantor Serial No. Filing Date Author(s) Title
- ------- ---------- ----------- --------- -----
<S> <C> <C> <C> <C>
</TABLE>
Item B. Copyright/Mask Work Licenses
<TABLE>
<CAPTION>
Effective Expiration Subject
Grantor Licensor Licensee Registration No. Date Date Matter
- ------- -------- -------- ---------------- --------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 31
SCHEDULE V
TO SECURITY AGREEMENT
Item A. Patents
Issued Patents
--------------
<TABLE>
<CAPTION>
Grantor Patent No. Issue Date Inventor(s) Title
- ------- ---------- ---------- ----------- -----
<S> <C> <C> <C> <C>
</TABLE>
Pending Patent Applications
---------------------------
<TABLE>
<CAPTION>
Grantor Serial No. Filing Date Inventor(s) Title
- ------- ---------- ----------- ----------- -----
<S> <C> <C> <C> <C>
</TABLE>
Item B. Patent Licenses
<TABLE>
<CAPTION>
Effective Expiration Subject
Grantor Licensor Licensee Patent No. Date Date Matter
- ------- -------- -------- ---------- --------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 32
SCHEDULE VI
TO SECURITY AGREEMENT
Item A. Trademarks
Registered Trademarks
---------------------
<TABLE>
<CAPTION>
Grantor Trademark Registration No. Registration Date
- ------- --------- ---------------- -----------------
<S> <C> <C> <C>
</TABLE>
Pending Trademark Applications
------------------------------
<TABLE>
<CAPTION>
Grantor Trademark Serial No. Filing Date
- ------- --------- ---------- -----------
<S> <C> <C> <C>
</TABLE>
Item B. Trademark Licenses
<TABLE>
<CAPTION>
Effective Expiration
Grantor Trademark Licensor Licensee Registration No. Date Date
- ------- --------- -------- -------- ---------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 33
SCHEDULE VII
TO SECURITY AGREEMENT
Trade Secret or Know-How Licenses
---------------------------------
<TABLE>
<CAPTION>
Effective Expiration Subject
Grantor Licensor Licensee Date Date Matter
- ------- -------- -------- ---- ---- ------
<S> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 34
SCHEDULE VIII
TO SECURITY AGREEMENT
Deposit Accounts
----------------
<TABLE>
<CAPTION>
Account
Grantor Bank Address of Bank Type of Account Number
- ------- ---- --------------- --------------- ------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 35
ANNEX 1
TO SECURITY AGREEMENT
SUPPLEMENT NO. dated as of , to
the Security Agreement dated as of March 30, 1998 (the
"Security Agreement"), among EVENFLO & SPALDING HOLDINGS
CORPORATION, a Delaware corporation ("Holdings"), SPALDING &
EVENFLO COMPANIES, INC., a Delaware corporation (the
"Borrower"), each of the Subsidiaries (such term and each
other capitalized term used but not defined herein having the
meaning given it in the Security Agreement) and BANK OF
AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION, as
administrative agent (in such capacity, the "Administrative
Agent") for the Secured Parties.
A. Reference is made to the Liquidity Facility, dated as of
March 30, 1998 (as amended, amended and restated or otherwise modified from
time to time, the "Liquidity Facility"), among the Borrower, the Lenders, the
Administrative Agent, the Documentation Agent and the Syndication Agent.
B. The Grantors have entered into the Security Agreement in
order to induce the Lenders to make Loans pursuant to, and upon the terms and
subject to the conditions specified in, the Liquidity Facility. Pursuant to
the Liquidity Facility, each Subsidiary that was not in existence or not a
Subsidiary on the date thereof is required to enter into the Security Agreement
as a Grantor upon becoming a Subsidiary. Section 26 of the Security Agreement
provides that additional Subsidiaries may become Grantors under the Security
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned (the "New Grantor") is a Subsidiary of Holdings
and is executing this Supplement in accordance with the requirements of the
Liquidity Facility to become a Grantor under the Security Agreement in order to
induce the Lenders to make additional Loans and as consideration for Loans
previously made.
Accordingly, the Administrative Agent and the New Grantor
agree as follows:
SECTION 1. In accordance with Section 26 of the Security
Agreement, the New Grantor by its signature below becomes a Grantor under the
Security Agreement with the same force and effect as if originally named
therein as a Grantor and the New Grantor hereby agrees to all the terms and
provisions of the Security Agreement applicable to it as a Grantor thereunder.
Each reference to a "Grantor" in the Security Agreement shall be deemed to
include the New Grantor. The Security Agreement is hereby incorporated herein
by reference.
SECTION 2. The New Grantor represents and warrants to the
Secured Parties that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to the effects of
applicable bankruptcy, insolvency or similar laws effecting creditors' rights
generally and equitable principles of general applicability.
SECTION 3. This Supplement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument. This Supplement
shall become effective when the Administrative Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of the New Grantor and the Administrative Agent.
<PAGE> 36
SECTION 4. Except as expressly supplemented hereby, the
Security Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable
in any respect, neither party hereto shall be required to comply with such
provision for so long as such provision is held to be invalid, illegal or
unenforceable, but the validity, legality and enforceability of the remaining
provisions contained herein and in the Security Agreement shall not in any way
be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be
in writing and given as provided in the Security Agreement. All communications
and notices hereunder to the New Grantor shall be given to it at the address
set forth under its signature, with a copy to the Borrower.
IN WITNESS WHEREOF, the New Grantor and the Administrative Agent have
duly executed this Supplement to the Security Agreement as of the day and year
first above written.
[NAME OF NEW GRANTOR]
By: ______________________________
Name:
Title:
Address: _________________________
_________________________
Fax No.: _________________________
Attention:________________________
BANK OF AMERICA NATIONAL SAVINGS &
TRUST ASSOCIATION, as
Administrative Agent
By: ______________________________
Name:
Title:
Address: _________________________
_________________________
Fax No.: _________________________
Attention:________________________
-2-
<PAGE> 1
[EXECUTION COPY]
AMENDED AND RESTATED PLEDGE AGREEMENT
This AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of March 31,
1998, by EVENFLO & SPALDING HOLDINGS CORPORATION, a Delaware corporation (the
"Borrower"), the undersigned Subsidiaries of the Borrower (each a "Subsidiary
Pledgor" and collectively, the "Subsidiary Pledgors") and each other Person
which may from time to time hereafter become a party hereto pursuant to Section
16 (each an "Additional Pledgor" and collectively, the "Additional Pledgors",
and, together with; the Borrower and the Subsidiary Pledgors, collectively, the
"Pledgors"), in favor of BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION
("BofA"), as administrative agent (in such capacity, the "Administrative
Agent") for the lenders (the "Lenders") from time to time parties to the Credit
Agreement, dated as of September 30, 1996 (as amended by the First Amendment to
Credit Agreement, dated as of December 11, 1996, and as the same may be
otherwise amended, amended and restated, supplemented or modified from time to
time, the "Credit Agreement"), among the Borrower, the Lenders, BofA, as swing
line lender and as fronting lender, Merrill Lynch Capital Corporation, as
documentation agent (in such capacity, the "Documentation Agent") for the
Lenders, NationsBank N.A. South, as syndication agent (in such capacity, the
"Syndication Agent") for the Lenders, the several financial institutions
specifically identified as Co-Agents on the signature pages thereof and the
Administrative Agent, for the ratable benefit of the Secured Creditors (as
defined below).
W I T N E S S E T H:
WHEREAS, (a) pursuant to the Credit Agreement, the Lenders have
severally agreed to make Credit Extensions (such capitalized term, and other
capitalized terms used in these recitals, to have the meanings set forth, or
defined by reference, in Section 1) to the Borrower upon the terms of and
subject to the conditions set forth therein and (b) one or more Lenders
(including those of its Affiliates that have appointed the Administrative Agent
to act on such Affiliate's behalf hereunder on terms substantially similar to
those set forth in Article X of the Credit Agreement, including the provisions
relating to exculpation and indemnification therein) may from time to time
enter into Swap Contracts with the Borrower (such Affiliates, together with
such Lenders, the Administrative Agent, the Documentation Agent, the
Syndication Agent, being referred to herein as "Secured Creditors");
WHEREAS, the Borrower and the Administrative Agent are parties to the
Pledge Agreement, dated as of September 30, 1996 (as the same may have
heretofore been amended, amended and restated, supplemented or otherwise
modified, the "Existing Pledge Agreement");
WHEREAS, (a) the Borrower owns 100% of the capital stock of each
Subsidiary Pledgor and (b) each Subsidiary Pledgor has, pursuant to the
Guaranty (as the same may be amended, supplemented or otherwise modified),
guaranteed to the Administrative Agent, for the ratable benefit of the Secured
Creditors and their respective successors, endorsees, transferees and assigns,
the prompt and complete payment and performance by the Borrower when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations;
<PAGE> 2
WHEREAS, the proceeds of the Credit Extensions will be used in part to
enable the Borrower to make valuable transfers to the Subsidiary Pledgors in
connection with the operation of their respective businesses;
WHEREAS, the Borrower and the Subsidiary Pledgors are engaged in
related businesses, and each Pledgor will derive substantial direct and
indirect benefit from the making of the Credit Extensions;
WHEREAS, it is a condition precedent to the obligation of the Lenders
to continue to make their respective Credit Extensions to the Borrower under
the Credit Agreement that the Borrower and the Subsidiary Pledgors shall have
executed and delivered this Pledge Agreement to the Administrative Agent for
the ratable benefit of the Secured Creditors; and
WHEREAS, each Pledgor is the legal and beneficial owner of the shares
of stock (the "Pledged Shares") described on Schedule I hereto and attributed
to such Pledgor (as the same may be supplemented from time to time in
accordance with the requirements of the Credit Agreement) and issued by the
corporations named therein, which Pledged Shares constitute the percentage of
all the issued and outstanding shares of capital stock of such corporations
identified on such Schedule I;
NOW, THEREFORE, in consideration of the premises and to induce the
Secured Creditors to make additional Credit Extensions and as consideration for
Credit Extensions previously made and in consideration of the agreements set
forth in Amendment No. 2 to the Credit Agreement, each of the Pledgors hereby
agrees with the Administrative Agent, for the ratable benefit of the Secured
Creditors, to amend and restate the Existing Pledge Agreement as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them
in the Credit Agreement.
(b) "Existing Pledge Agreement" is defined in the second recital.
(c) "Liquidity Creditors" means those Persons parties to the Liquidity
Facility other than the borrower thereunder.
(d) "Liquidity Pledge Agreement" means the Pledge Agreement, dated as
of March 30, 1998 (as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time), entered into by the
Pledgors in favor of BofA, as administrative agent under the Liquidity
Facility, for the ratable benefit of the Liquidity Creditors.
(e) "Obligations" means the collective reference to (i) the unpaid
principal of and interest on the Credit Extensions and all other obligations
and liabilities of the Borrower to the Administrative Agent or any Lender
(including, without limitation, interest accruing at the then-applicable rate
provided in the Credit Agreement after the maturity of the Credit Extensions
and interest accruing at the then-applicable rate provided in the Credit
Agreement after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, that may arise under, out of,
or in connection with, the Credit Agreement, the other Loan Documents, the
Letters of Credit, Acceptances or any other documents made, delivered or given
in connection
-2-
<PAGE> 3
therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by the Borrower or any
Subsidiary Pledgor pursuant to the terms of the Credit Agreement or any other
Loan Document), (ii) all obligations and liabilities of the Borrower to any
Secured Creditor, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, that may arise under, out of,
or in connection with, any Swap Contract or any other document made, delivered
or given in connection therewith and (iii) all obligations of each Obligor
(other than the Borrower) now or hereafter existing under this Pledge Agreement
and each other Loan Document to which it is or may become a party.
(f) "Pledge Agreement" means this Amended and Restated Pledge
Agreement, as the same may be amended, amended and restated, supplemented or
otherwise modified from time to time.
(g) "Pledged Note Issuer" means each Person identified on Schedule
II hereto as the issuer of the Pledged Note identified opposite the name of
such Person.
(h) "Pledged Notes" means all promissory notes of any Pledged Note
Issuer in the form or substantially the form of Exhibit A hereto which are
delivered by each Pledgor to the Administrative Agent as Pledged Property
hereunder, as such promissory notes, in accordance with Section 8, are amended,
supplemented, restated or otherwise modified from time to time together with
any promissory note of any Pledged Note Issuer taken in extension or renewal
thereof or substitution therefor.
(i) "Pledged Property" means all Pledged Shares, all Pledged Notes,
and all other pledged shares of capital stock or promissory notes, all other
securities, all assignments of any amounts due or to become due with respect
thereto, all other instruments which are now being delivered by the Pledgor to
the Administrative Agent or may from time to time hereafter be delivered by the
Pledgor to the Administrative Agent for the purpose of pledge under this Pledge
Agreement or any other Loan Document, and all proceeds of any of the foregoing.
(j) "Shared Collateral" means the capital stock of Spalding & Evenflo
Companies, Inc., a Delaware corporation (and proceeds thereof) pledged by the
Borrower (i) hereunder to the Administrative Agent on behalf of the Secured
Creditors and (ii) pursuant to the Liquidity Pledge Agreement.
(k) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Pledge Agreement shall refer to this Pledge Agreement
as a whole and not to any particular provision of this Pledge Agreement, and
Section references are to Sections of this Pledge Agreement unless otherwise
specified. The word "including" is not limiting and means "including without
limitation".
(l) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Grant of Security. Each Pledgor hereby assigns, pledges and
transfers to the Administrative Agent for the ratable benefit of the Secured
Creditors, and hereby grants to the Administrative Agent
-3-
<PAGE> 4
for the ratable benefit of the Secured Creditors, a security interest in, the
following, whether now owned or existing or hereafter acquired or existing
(collectively, the "Collateral"):
(a) all promissory notes of each Pledged Note Issuer identified in
Schedule II;
(b) all other Pledged Notes issued from time to time;
(c) the Pledged Shares and the certificates representing the Pledged
Shares, any other issued and outstanding shares of the "issuers" listed on
Schedule I, and any interest of such Pledgor in the entries on the books of any
financial intermediary pertaining to the Pledged Shares or any such other
shares, and all dividends, cash, warrants, rights, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged Shares
and any such other shares; and
(d) to the extent not covered by clause (a) above, all proceeds of
any or all of the foregoing Collateral. For purposes of this Pledge Agreement,
the term "proceeds" includes whatever is receivable or received when Collateral
or proceeds are sold, exchanged, collected or otherwise disposed of, whether
such disposition is voluntary or involuntary, and includes, without limitation,
proceeds of any indemnity or guaranty payable to such Pledgor or the
Administrative Agent from time to time with respect to any of the Collateral.
3. Security for Obligations. This Pledge Agreement secures the
payment of all Obligations. Without limiting the generality of the foregoing,
this Pledge Agreement secures the payment of all amounts that constitute part
of the Obligations and would be owed by the Obligors to the Administrative
Agent or the Secured Creditors under the Loan Documents and any Swap Contracts
but for the fact that they are unenforceable or not allowable due to the
existence of an Insolvency Proceeding involving any such Obligor.
4. Delivery of the Collateral. All certificates or instruments, if
any, representing or evidencing the Shared Collateral and all Pledged Notes,
shall be delivered to and held by or on behalf of (and in the case of the
Pledged Notes, endorsed to the order of) the Administrative Agent pursuant
hereto, as to Collateral existing on the date hereof, on the date hereof and,
as to Collateral coming into existence after the date hereof, promptly
following the creation thereof, and, in each case, shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed undated
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Administrative Agent. The Administrative Agent
shall have the right, at any time after the occurrence and during the
continuance of an Event of Default and without notice to any Pledgor, to
transfer to or to register in the name of the Administrative Agent or any of
its nominees any or all of the Pledged Shares.
5. Representations and Warranties. Each Pledgor hereby represents
and warrants to each Secured Creditor as follows:
(i) The Pledged Shares set forth on Schedule I hereto represent on
the date hereof the percentage of all the issued and outstanding capital stock
of each direct Material Subsidiary of the Borrower as identified on such
Schedule I.
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<PAGE> 5
(ii) Each of the Pledgors is the legal and beneficial owner of the
Collateral, as indicated on Schedule I, pledged or assigned by such Pledgor
hereunder free and clear of any Lien, except for the Lien and security interest
(A) created by this Pledge Agreement, (B) as to the Shared Collateral only,
created by the Liquidity Pledge Agreement, or (C) Liens permitted under Section
8.
(iii) As of the date of this Pledge Agreement, the Pledged Shares
pledged by each Pledgor hereunder have been duly authorized and validly issued
and are fully paid and non-assessable.
(iv) As of the date of this Pledge Agreement, no Pledged Share is
uncertificated.
(v) The execution and delivery by the Pledgors of this Pledge
Agreement and the pledge of the Collateral pledged by such Pledgors hereunder
pursuant hereto create a valid and perfected second priority security interest
and security entitlement in the Collateral (other than the Shared Collateral)
in favor of the Administrative Agent, subject only to the Lien thereon granted
pursuant to the Liquidity Pledge Agreement, on behalf of the Secured Creditors,
securing the payment of the Obligations. As to the Shared Collateral only,
the execution and delivery by the Borrower of this Pledge Agreement and the
pledge of the Shared Collateral by the Borrower hereunder create a valid and
perfected first priority, pari passu, security interest and security
entitlement in the Shared Collateral (equal in priority to the Lien created
pursuant to the Liquidity Pledge Agreement and subject to no other Liens) in
favor of the Administrative Agent, on behalf of the Secured Creditors, securing
the payment of the Obligations.
(vi) In the case of each Pledged Note, all of such Pledged Notes
have been duly authorized, executed, endorsed, issued and delivered, and are
the legal, valid and binding obligation of the issuers thereof, and are not in
default.
(vii) Each Pledgor has full power, authority and legal right to
pledge all the Collateral pledged by such Pledgor pursuant to this Pledge
Agreement and such Pledgor will defend its and the Administrative Agent's title
or interest thereto or therein (and in the proceeds thereof) against any and
all Liens (other than (A) the Lien of this Pledge Agreement, (B) as to the
Shared Collateral only, the first priority, pari passu, Lien granted by the
Borrower pursuant to the Liquidity Pledge Agreement and (C) as to the
Collateral other than the Shared Collateral, the first priority Lien granted
pursuant to the Liquidity Pledge Agreement), however arising, and all persons
whomsoever.
(viii) The Borrower has furnished to the Administrative Agent true and
complete copies as of the date hereof of the charter and/or other
organizational documents of, and the bylaws of each Subsidiary any of the
shares of capital stock of which constitute Pledged Shares the Borrower is not
a party as of the date hereof to any shareholder agreement or other arrangement
affecting the voting rights of any capital stock of any such Subsidiary.
6. Further Assurances. Each Pledgor agrees that (a) at any time and
from time to time, at the expense of such Pledgor, it will promptly execute and
deliver all further instruments and documents, and take all further action that
may be necessary, or that the Administrative Agent may reasonably request, in
order to perfect and protect any pledge, assignment or security interest
granted or purported to be granted hereby or to enable the Administrative Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral and (b) at any time when any Pledged Shares shall become
uncertificated, the Pledgors and the Administrative Agent shall enter into good
faith negotiations to effectuate the
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<PAGE> 6
provisions of Article 8 of the UCC such that the Administrative Agent's second
priority, in the case of the Collateral other than the Shared Collateral, and
first priority, pari passu, in the case of the Shared Collateral only, security
interests granted hereunder shall be maintained. The Borrower agrees to notify
the Administrative Agent in writing on a monthly basis, such notice to be
delivered concurrently with the reports delivered by the Borrower to the
Administrative Agent in accordance with Section 7.1(c) of the Credit Agreement
of the amounts of intercompany indebtedness owing to the Borrower and the
identity of each Subsidiary obligated to repay the same.
7. Voting Rights; Dividends and Distributions; Etc. (a) So long as
no Event of Default shall have occurred and be continuing:
(i) The Pledgors shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral (as applicable)
or any part thereof for any purpose not prohibited by the terms of this Pledge
Agreement or the other Loan Documents.
(ii) The Administrative Agent shall execute and deliver (or
cause to be executed and delivered) to any Pledgor (at such Pledgor's expense)
all such proxies and other instruments as such Pledgor may reasonably request
for the purpose of enabling such Pledgor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i) above.
(b) Subject to paragraph (c) below, each Pledgor shall be entitled to
receive and retain and use, free and clear of the Lien of this Pledge
Agreement, any and all dividends, distributions and interest paid in respect of
the Collateral (as applicable); provided, however, that any and all dividends
and other distributions in equity securities included in the Collateral shall
be, and shall be forthwith delivered to the Administrative Agent to hold as,
Collateral and shall, if received by a Pledgor, be received in trust for the
benefit of the Administrative Agent, be segregated from the other property or
funds of such Pledgor and be forthwith delivered to the Administrative Agent as
Collateral in the same form as so received (with any necessary endorsement).
(c) Upon written notice to any Pledgor by the Administrative Agent
following the occurrence and during the continuance of an Event of Default:
(i) all rights of such Pledgor to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall cease, and all such
rights shall thereupon become vested in the Administrative Agent, which shall
thereupon have the sole right to exercise or refrain from exercising such
voting and other consensual rights during the continuance of such Event of
Default;
(ii) all rights of such Pledgor to receive the dividends,
distributions, principal and interest payments that such Pledgor would
otherwise be authorized to receive and retain pursuant to Section 7(b) shall
cease, and all such rights shall thereupon become vested in the Administrative
Agent, which shall thereupon have the sole right to receive and hold as
Collateral such dividends and interest payments during the continuance of such
Event of Default;
(iii) all dividends, principal and interest payments that are
received by such Pledgor contrary to the provisions of Section 7(b) shall be
received in trust for the benefit of the Administrative
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<PAGE> 7
Agent, shall be segregated from other funds of such Pledgor and shall forthwith
be paid over to the Administrative Agent as Collateral in the same form as so
received (with any necessary endorsements); and
(iv) in order to permit the Administrative Agent to receive
all dividends and other distributions to which it may be entitled under Section
7(b), to exercise the voting and other consensual rights that it may be
entitled to exercise pursuant to Section 7(c)(i), and to receive all dividends,
distributions, principal and interest payments and other distributions that it
may be entitled to receive under Section 7(c)(ii), such Pledgor shall, if
necessary, upon written notice from the Administrative Agent, from time to time
execute and deliver to the Administrative Agent, appropriate proxies, dividend
payment orders and other instruments as the Administrative Agent may reasonably
request.
8. Transfers and Other Liens; Additional Collateral; Documents; Etc.
No Pledgor shall:
(a) (i) except as permitted by the Credit Agreement, sell or otherwise
dispose of, or grant any option or warrant with respect to, any of the
Collateral or (ii) create or suffer to exist any consensual Lien upon or with
respect to any of the Collateral, except for (A) the Lien of this Pledge
Agreement, (B) as to the Shared Collateral only, the first priority, pari
passu, Lien granted by the Borrower pursuant to the Liquidity Pledge Agreement
and (C) as to the Collateral other than the Shared Collateral, the first
priority Lien granted pursuant to the Liquidity Pledge Agreement, provided that
in the event such Pledgor sells or otherwise transfers assets as permitted by
the Credit Agreement in accordance with the terms of the Credit Agreement and
such assets are or include Collateral, the Administrative Agent shall (at the
expense of such Pledgor) release such Collateral to such Pledgor free and clear
of the lien and security interest under this Pledge Agreement concurrently with
the consummation of such sale;
(b) (i) except as may be permitted by the Credit Agreement, cause any
issuer of Pledged Shares pledged by such Pledgor to issue any stock or other
securities in substitution for the Pledged Shares issued by such issuer, except
to such Pledgor, (ii) fail to pledge hereunder, immediately upon the issuance
thereof, any and all additional shares of stock or other securities of each
such issuer of Pledged Shares and (iii) permit the issuance of any additional
shares of stock of such issuer unless permitted by the Credit Agreement and, if
so permitted, any proceeds thereof required to be applied under the Credit
Agreement are so applied in accordance therewith or, if any such additional
shares are issued to such Pledgor, such additional shares are immediately
pledged hereunder upon the issuance thereof;
(c) amend, supplement or otherwise modify, or permit the amendment,
supplementation or other modification of, the charter or other organizational
documents or the bylaws of any entity any of the capital stock of which
constitute Pledged Shares of such Pledgor in any respect that would be
materially adverse to the interests or position of the Administrative Agent or
the Secured Creditors hereunder or in connection herewith, nor shall it, nor
shall it permit any entity any of the capital stock of which constitutes
Pledged Shares to, enter into or agree to any shareholder or other agreement
that would be materially adverse to the interests or position of the
Administrative Agent or the Secured Creditors hereunder or in connection
herewith; and
(d) enter into any agreement amending any provision of any Pledged
Note or forgive the obligation of the maker thereof to repay any principal or
interest due and owing thereunder;
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<PAGE> 8
provided, however, that notwithstanding any provision to the contrary contained
herein or in any other Loan Document, the Borrower shall, at all times during
the period from the date hereof until the payment in full in cash of the
Obligations, the termination of all Commitments, the termination or expiration
of all Letters of Credit and Swap Contracts and the maturing of all
Acceptances, have pledged to the Administrative Agent for the ratable benefit
of the Secured Creditors pursuant to the terms of this Pledge Agreement all of
the outstanding shares of the capital stock of each Material Subsidiary of the
Borrower, provided that, in the event such Subsidiary is a Foreign Subsidiary,
the Borrower shall not be required to have so pledged to the Administrative
Agent more than 65% of the outstanding shares of the capital stock of such
Subsidiary.
9. Administrative Agent Appointed Attorney-in-Fact. Each Pledgor
hereby irrevocably appoints the Administrative Agent as such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor
and in the name of such Pledgor or otherwise to take any action and to execute
any instrument, in each case after the occurrence and during the continuance of
an Event of Default, that the Administrative Agent may deem reasonably
necessary or advisable to accomplish the purposes of this Pledge Agreement,
including to receive, endorse and collect all instruments made payable to such
Pledgor representing any dividend, interest payment or other distribution in
respect of the Collateral or any part thereof and to give full discharge for
the same and otherwise to collect on any Collateral or enforce the rights of
the Administrative Agent with respect thereto. Each Pledgor hereby
acknowledges, consents and agrees that this power of attorney is irrevocable
and coupled with an interest.
10. The Administrative Agent's Duties. The powers conferred on the
Administrative Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Collateral in its possession and the
accounting for money actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Shares, whether or not the Administrative
Agent or any Secured Creditor has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Collateral. The
Administrative Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which the Administrative
Agent accords its own property or if the Administrative Agent decides to take
any action for such purpose that has been requested by any Pledgor (it being
understood and agreed that the failure of the Administrative Agent to comply
with any such request at any time shall not in itself be deemed a failure to
exercise reasonable care and that the Administrative Agent is not obligated to
comply with any such request unless otherwise required to do so hereunder or
under the Credit Agreement).
11. Remedies. If any Event of Default shall have occurred and be
continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured creditor
upon default under the Uniform Commercial Code in effect in the State of New
York at such time (the "UCC") and also may without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any exchange broker's board or at any of the Administrative
Agent's offices or elsewhere, for cash, on credit or for future delivery, at
such price or
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<PAGE> 9
prices and upon such other terms as are commercially reasonable irrespective of
the impact of any such sales on the market price of the Collateral. Each
purchaser at any such sale shall hold the property sold absolutely free from
any claim or right on the part of any Pledgor, and each Pledgor hereby waives
(to the extent permitted by law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. Each Pledgor agrees that,
to the extent notice of sale shall be required by law, at least ten (10) days'
notice to such Pledgor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. To the extent permitted by law, each Pledgor hereby waives any
claim against the Administrative Agent arising by reason of the fact that the
price at which any Collateral may have been sold at such a private sale was
less than the price that might have been obtained at a public sale, even if the
Administrative Agent accepts the first offer received and does not offer such
Collateral to more than one offeree.
(b) Subject to Section 18 hereof, all cash proceeds received by the
Administrative Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied (after
payment of any amounts payable to the Administrative Agent pursuant to Sections
11.4 and 11.5 of the Credit Agreement) as follows:
First, to the payment of the reasonable costs and expenses of
the Administrative Agent as set forth in Sections 7.4 and 15;
Second, to the payment of all amounts of the Obligations owed
to the Secured Creditors in respect of Credit Extensions made by them,
pro rata as among the Secured Creditors in accordance with the amount
of such Obligations owed to them;
Third, ratably against Obligations consisting of unpaid and
outstanding principal of the Loans, Obligations then due and owing
under all outstanding Swap Contracts and Obligations consisting of
unreimbursed and owing Special Facility Obligations and other similar
obligations;
Fourth, to collateralize Obligations consisting of Special
Facility Obligations and other similar obligations; and
Fifth, against any other remaining Obligations.
The Administrative Agent may assume that no Obligations are outstanding with
respect to Swap Contracts unless it has received written notice thereof in
accordance with this Pledge Agreement prior to any such application by it, and
if so notified may rely upon and deal with the Secured Creditor party to such
Swap Contract as to Obligations thereunder. Any surplus of such cash or cash
proceeds held by the Administrative Agent and remaining after payment in full
of all the Obligations (other than indemnities, costs and expenses that survive
termination of a Loan Document but as to which demand for payment has not then
been made), the termination of all Commitments, the termination or expiration
of all Letters of Credit and the maturity of all Acceptances shall be paid over
to the
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<PAGE> 10
applicable Pledgor or to any other Person notified in writing to the
Administrative Agent that may be lawfully entitled to receive such surplus.
(c) The Administrative Agent may exercise any and all rights and
remedies of each Pledgor in respect of the Collateral.
(d) All payments received by any Pledgor after the occurrence and
during the continuance of an Event of Default in respect of the Collateral
shall be received in trust for the benefit of the Administrative Agent, shall
be segregated from other funds of such Pledgor and, upon written notice to such
Pledgor from the Administrative Agent, shall be forthwith paid over to the
Administrative Agent in the same form as so received (with any necessary
endorsement).
(e) Each Pledgor shall remain liable to the extent of any deficiency.
(f) Each Pledgor agrees that in any sale of any of the Collateral in
the exercise of remedies hereunder whenever an Event of Default shall have
occurred and be continuing, the Administrative Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it
may be advised by counsel is reasonably necessary in order to avoid any
violation of applicable law (including compliance with such procedures as may
restrict the number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and restrict
such prospective bidders and purchasers to persons who will represent and agree
that they are purchasing for their own account for investment and not with a
view to the distribution or resale of such Collateral), or in order to obtain
any required approval of the sale or of the purchaser by any governmental
regulatory authority or official, and such Pledgor further agrees that such
compliance shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner, nor shall the Administrative
Agent be liable nor accountable to such Pledgor for any discount allowed by
reason of the fact that such Collateral is sold in compliance with any such
limitation or restriction.
12. Amendments, etc. with Respect to the Obligations; Waiver of
Rights. Each Pledgor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against such Pledgor and without notice to or
further assent by such Pledgor, any demand for payment of any of the
Obligations made by the Administrative Agent or any Secured Creditor may be
rescinded by such party and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any Secured Creditor, and the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith and the Swap Contracts and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Majority Lenders under the terms of the Credit
Agreement, as the case may be or, in the case of any Swap Contracts, the
Secured Creditor party thereto) may deem advisable from time to time (in
accordance with the Credit Agreement), and any collateral security, guarantee
or right of offset at any time held by the Administrative Agent or any Secured
Creditor for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Administrative Agent nor any Secured
Creditor shall have any obligation to protect, secure, perfect or insure any
Lien at any time held by it as security for the Obligations or for this Pledge
Agreement or any property subject
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thereto. When making any demand hereunder against any Pledgor, the
Administrative Agent or any Secured Creditor may, but shall be under no
obligation to, make a similar demand on any other pledgor, or any other
provider of collateral or guarantor, and any failure by the Administrative
Agent or any Secured Creditor to make any such demand or to collect any
payments from such Pledgor or any other pledgor, provider of collateral or
guarantor, and any release of such Pledgor or any other pledgor, provider of
collateral or guarantor shall not relieve such Pledgor of its 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
Secured Creditor against such Pledgor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
13. Continuing Security Interest, Assignments Under the Credit
Agreement. This Pledge Agreement shall create a continuing security interest
in the Collateral and shall (a) unless the Pledgors and the Administrative
Agent otherwise agree, remain in full force and effect until the payment in
full in cash of the Obligations (other than indemnities, costs and expenses
that survive termination of a Loan Document but as to which demand for payment
has not then been made) and the termination of all Commitments, the termination
or expiration of all Letters of Credit and the maturing of all Acceptances,
notwithstanding that from time to time prior thereto the Pledgors may be free
from any Obligations, (b) be binding upon each Pledgor, its successors and
assigns and (c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the Administrative Agent, the
Secured Creditors and their respective successors, transferees and assigns.
Without limiting the foregoing clause (c), any Secured Creditor may assign or
otherwise transfer (in whole or in part) any Note, Loan or other Obligation
held by it to any other Person, and such other Person shall thereupon become
vested with all the rights and benefits in respect thereof granted to such
Secured Creditor under any Loan Document (including this Pledge Agreement) or
otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the provisions of Section 11.8 and Article X of the Credit
Agreement.
14. Reinstatement. This Pledge Agreement 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 Secured Creditor upon
the filing or commencement of any Insolvency Proceeding in respect of any
Pledgor, or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, such Pledgor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
15. Notices. All notices, requests and demands to or upon the
Secured Creditors or the Pledgors under this Pledge Agreement shall be given or
made in accordance with Section 11.2 of the Credit Agreement and addressed as
follows:
(a) if to any Pledgor other than the Borrower, in care of the
Borrower in accordance with Section 11.2 of the Credit Agreement
(b) if to the Borrower, in accordance with Section 11.2 of
the Credit Agreement; and
(c) if to any Secured Creditor, in accordance with Section
11.2 of the Credit Agreement.
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<PAGE> 12
16. Additional Pledgors. Upon the execution and delivery by any
other Person of an instrument in the form of Annex 1 hereto, such Person shall
become a "Pledgor" hereunder with the same force and effect as if originally
named as a Pledgor herein. The execution and delivery of any such instrument
shall not require the consent of any other Pledgor hereunder. The rights and
obligations of each Pledgor hereunder shall remain in full force and effect
notwithstanding the addition of any new Pledgor as a party to this Pledge
Agreement.
17. Foreign Pledgor Supplements. This Pledge Agreement may be
supplemented from time to time by Foreign Subsidiary Pledge Supplements as to
pledges of capital stock of Foreign Subsidiaries which supplements shall make
express reference to this Pledge Agreement.
18. Intercreditor Arrangements. For perfection purposes only, the
Administrative Agent shall be deemed to be holding the Shared Collateral
hereunder on behalf of both the Secured Creditors and the Liquidity Creditors
on a first priority, pari passu, basis. In furtherance of the foregoing, the
Administrative Agent shall be deemed to have all the benefits of appointment,
authorization, exculpation and indemnity provided to the administrative agent
under the Liquidity Facility mutatis mutandis.
19. Counterparts. This Pledge Agreement may be executed by the
Pledgors and the Administrative Agent on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. A set of the counterparts of this Pledge Agreement
signed by the Pledgors and the Administrative Agent shall be lodged with the
Administrative Agent and the Borrower.
20. Severability. Any provision of this Pledge Agreement that 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.
21. Integration; Loan Document. This Pledge Agreement represents the
entire agreement of the Pledgors and the Administrative Agent with respect to
the subject matter hereof and there are no agreements relative to the subject
matter hereof not reflected herein or, to the extent expressly referred to
herein, in the other Loan Documents. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.
22. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None
of the terms or provisions of this Pledge Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Pledgor and the Administrative Agent in accordance with Section 11.1 of
the Credit Agreement.
(b) Neither the Administrative Agent nor any Secured Creditor shall
by any act (except by a written instrument pursuant to Section 22(a)), 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, nor
any delay in exercising, on the part of the Administrative Agent or any Secured
Creditor, any right, power or privilege
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<PAGE> 13
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 Secured Creditor of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy that the Administrative Agent or such Secured Creditor would
otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
23. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS PLEDGE AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE,
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
23.
24. Jurisdiction; Consent to Service of Process. (a) Each Pledgor
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
this Pledge Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Pledge Agreement shall affect any
right that any Pledgor or any Secured Creditor may otherwise have to bring any
action or proceeding relating to this Pledge Agreement or the other Loan
Documents against any Pledgor or any Secured Creditor or its properties in the
courts of any jurisdiction.
(b) Each Pledgor and each Secured Creditor hereby irrevocably
and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Pledge Agreement or the other Loan Documents in any New York State or
federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Pledge Agreement irrevocably consents
to service of process in the manner provided for notices in Section 15.
Nothing in this Pledge Agreement will affect the right of any party to this
Pledge Agreement to serve process in any other manner permitted by law.
-13-
<PAGE> 14
25. Section Headings. The Section 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.
26. Successors and Assigns. 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 Secured Creditors and their successors and
assigns, except no Pledgor may assign, transfer or delegate any of its rights
or obligations under this Pledge Agreement without the prior written consent of
the Administrative Agent.
27. Protection of Collateral. The Administrative Agent may from time
to time take any action which the Administrative Agent reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein, and at any time after and
during the continuance of an Event of Default, the Administrative Agent may
from time to time, at its option and at the expense of the applicable Pledgor,
perform any act which such Pledgor agrees hereunder to perform and which such
Pledgor shall fail to perform.
28. GOVERNING LAW. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-14-
<PAGE> 15
IN WITNESS WHEREOF, each of the undersigned has caused this Pledge
Agreement to be duly executed and delivered by its duly authorized officer as
of the day and year first above written.
EVENFLO & SPALDING HOLDINGS
CORPORATION
SPALDING & EVENFLO COMPANIES, INC.
EVENFLO COMPANY, INC.
ETONIC WORLDWIDE CORPORATION
LISCO, INC.
S&E FINANCE CO., INC.
SPALDING SPORTS CENTERS, INC.
ETONIC LISCO, INC.
LISCO FURNITURE, INC.
LISCO FEEDING, INC.
LISCO SPORTS, INC.
By: ______________________________
Name: W. Michael Kipphut
Title: Treasurer and
Vice President
S&E FINANCE CO., INC.
By: ______________________________
Name: Paul L. Whiting
Title: President and CEO
BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION,
as Administrative Agent
By: ______________________________
Name:
Title:
<PAGE> 16
ACKNOWLEDGED AND AGREED:
BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION,
as Administrative Agent under the
Liquidity Facility, on behalf of
the lenders thereunder
By: ______________________________
Name:
Title:
<PAGE> 17
SCHEDULE I
TO THE PLEDGE AGREEMENT
PLEDGED SHARES
<TABLE>
<CAPTION>
Percentage
Stock of
Class of Certificate Number of Outstanding
Pledgor Issuer Stock/Par Value No(s) Shares Shares
------ ------ --------------- ----- ------ ------
<S> <C> <C> <C> <C> <C>
Evenflo & Spalding Holdings Spalding & Evenflo Companies, Common C 2 190,000 100%
Corporation Inc. Stock/$1.00
Spalding & Evenflo
Companies, Inc.
[SUBSIDIARIES]
</TABLE>
<PAGE> 18
SCHEDULE II
TO THE PLEDGE AGREEMENT
PLEDGED NOTES
<TABLE>
<CAPTION>
Pledged Note Issuer Description
- ------------------- -----------
<S> <C>
</TABLE>
<PAGE> 19
ANNEX 1 TO
PLEDGE AGREEMENT
SUPPLEMENT NO. dated as of , to
the Pledge Agreement dated as of March 31, 1998 (the "Pledge
Agreement"), among EVENFLO & SPALDING HOLDINGS CORPORATION, a
Delaware corporation (the "Borrower"), each of the
Subsidiaries (such term and each other capitalized term used
but not defined herein having the meaning given it in the
Pledge Agreement) and BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION, as administrative agent (in such capacity, the
"Administrative Agent") for the Secured Creditors.
A. Reference is made to the Credit Agreement, dated as of
September 30, 1996 (as amended by the First Amendment to Credit Agreement,
dated as of December 11, 1996, and as the same may be otherwise amended,
amended and restated, supplemented or modified from time to time, the "Credit
Agreement"), among the Borrower, the Lenders, the Documentation Agent,
Syndication Agent, the several financial institutions specifically identified
as Co-Agents on the signature pages thereof and the Administrative Agent.
B. The Pledgors have entered into the Pledge Agreement in
order to induce the Lenders to make Credit Extensions pursuant to, and upon the
terms and subject to the conditions specified in, the Credit Agreement.
Pursuant to the Credit Agreement, each Material Subsidiary that was not in
existence or not a Material Subsidiary on the date thereof is required to enter
into the Pledge Agreement as a Pledgor upon becoming a Material Subsidiary.
Section 16 of the Pledge Agreement provides that additional Persons may become
Pledgors under the Pledge Agreement by execution and delivery of an instrument
in the form of this Supplement. The undersigned (the "New Pledgor") is a
Material Subsidiary of the Borrower and is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Pledgor
under the Pledge Agreement in order to induce the Lenders to make additional
Credit Extensions and as consideration for Credit Extensions previously made.
Accordingly, the Administrative Agent and the New Pledgor
agree as follows:
SECTION 1. In accordance with Section 16 of the Pledge
Agreement, the New Pledgor by its signature below becomes a Pledgor under the
Pledge Agreement with the same force and effect as if originally named therein
as a Pledgor and the New Pledgor hereby agrees to all the terms and provisions
of the Pledge Agreement applicable to it as a Pledgor thereunder. Each
reference to a "Pledgor" in the Pledge Agreement shall be deemed to include the
New Pledgor. The Pledge Agreement is hereby incorporated herein by reference.
SECTION 2. The New Pledgor represents and warrants to the
Secured Creditors that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to the effects of
applicable bankruptcy, insolvency or similar laws effecting creditors' rights
generally and equitable principles of general applicability.
-2-
<PAGE> 20
SECTION 3. This Supplement may be executed in two or
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument. This Supplement shall
become effective when the Administrative Agent shall have received counterparts
of this Supplement that, when taken together, bear the signatures of the New
Pledgor and the Administrative Agent.
SECTION 4. Except as expressly supplemented hereby, the
Pledge Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable
in any respect, neither party hereto shall be required to comply with such
provision for so long as such provision is held to be invalid, illegal or
unenforceable, but the validity, legality and enforceability of the remaining
provisions contained herein and in the Pledge Agreement shall not in any way be
affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be
in writing and given as provided in the Pledge Agreement. All communications
and notices hereunder to the New Pledgor shall be given to it at the address
set forth under its signature, with a copy to the Borrower.
IN WITNESS WHEREOF, the New Pledgor and the Administrative Agent have
duly executed this Supplement to the Pledge Agreement as of the day and year
first above written.
[NAME OF NEW PLEDGOR]
By: ______________________________
Name:
Title:
Address: ________________________
_________________________
Fax No.: _________________________
Attention:________________________
-3-
<PAGE> 21
BANK OF AMERICA NATIONAL SAVINGS
& TRUST ASSOCIATION, as
Administrative Agent
By: ______________________________
Name:
Title:
Address: ________________________
________________________
Fax No.: _________________________
Attention:________________________
-4-
<PAGE> 22
EXHIBIT A
TO PLEDGE AGREEMENT
PROMISSORY NOTE
_________________, 19__
FOR VALUE RECEIVED, the undersigned, ______________, a
_______________ corporation (the "Maker"), promises to pay to the order of
EVENFLO & SPALDING HOLDINGS CORPORATION, a Delaware corporation (the "Payee"),
on DEMAND, advances made from time to time pursuant to intercompany loans made
by the Payee to the Maker.
The unpaid principal amount of this promissory note (this "Note")
from time to time outstanding shall bear interest at a rate of interest
determined by the Payee from time to time, which the Maker represents to be a
lawful and commercially reasonable rate, payable quarterly, and all payments of
principal of and interest on this Note shall be payable in lawful currency of
the United States of America. All such payments shall be made by the Maker to
an account established by the Payee and notified to the Maker and shall be
recorded on the grid attached hereto by the holder hereof (including the
Administrative Agent as pledgee). Upon notice from the Administrative Agent
(hereinafter defined) that a Default (as defined in the Credit Agreement,
hereinafter defined) of the nature referred to in Section 9.1(f) or (g) of the
Credit Agreement or an Event of Default (as defined in the Credit Agreement)
has occurred and is continuing under the Credit Agreement, the Maker shall make
such payments, in same day funds, to such other account as the Administrative
Agent shall direct in such notice.
This Note is one of the notes referred to in, and evidences
Indebtedness incurred pursuant to clause (c) of Section 8.4 of the Credit
Agreement. Upon the occurrence and continuance of an Event of Default under
the Credit Agreement, and notice thereof by the Administrative Agent to the
Maker, the Administrative Agent shall have all rights of the Payee to collect
and accelerate, and enforce all rights with respect to, the Indebtedness
evidenced by this Note. Unless otherwise defined herein or the context
otherwise requires, terms used herein have the meanings provided in the Credit
Agreement.
Reference is made to the Credit Agreement for a description of the
Pledge Agreement pursuant to which this Note has been pledged to the
Administrative Agent as security for the Obligations outstanding from time to
time under the Credit Agreement and each other Loan Document.
In addition to, but not in limitation of, the foregoing, the Maker
further agrees to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the holder
-1-
<PAGE> 23
(including the Administrative Agent as pledgee) of this Note endeavoring to
collect any amounts payable hereunder which are not paid when due, whether by
acceleration or otherwise.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON
THIS NOTE. THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
[Name of Maker]
By _____________________________
Title:_________________________
Pay to the order of ____________
EVENFLO & SPALDING HOLDINGS
CORPORATION
By: __________________________
Title:
-2-
<PAGE> 24
GRID
Intercompany Loans made by Evenflo & Spalding Holdings Corporation to
________________ and payments of principal of such Loans.
<TABLE>
<CAPTION>
Amount of Amount of Outstanding
Intercompany Principal Principal Notation Made
Date Loan Payment Balance By
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
[EXECUTION COPY]
SUPPLEMENT TO GUARANTY
SUPPLEMENT NO. 1, dated as of March 31, 1998 (this
"Supplement"), to the Guaranty, dated as of September 30,
1996 (as amended, supplemented, or otherwise modified, from
time to time, the "Guaranty"), among the initial signatories
thereto and each other Person which from time to time
thereafter became a party thereto pursuant to Section 13
thereof (each, individually, a "Guarantor", and, collectively,
the "Guarantors"), in favor of Bank of America National Trust
and Savings Association, as Administrative Agent (in such
capacity, the "Administrative Agent") for the ratable benefit
of the Secured Creditors (as defined in the Guaranty).
W I T N E S S E T H:
WHEREAS, capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Guaranty;
WHEREAS, the Guaranty provides that additional parties may become
Guarantors under the Guaranty by execution and delivery of an instrument in the
form of this Supplement;
WHEREAS, pursuant to the provisions of Section 13 of the Guaranty, the
undersigned is becoming an Additional Guarantor under the Guaranty; and
WHEREAS, the undersigned desires to become a Guarantor under the
Guaranty in order to induce the Lenders to continue to make and maintain Credit
Extensions under the Credit Agreement as consideration therefor;
NOW, THEREFORE, the undersigned agrees, for the benefit of the
Administrative Agent and Secured Creditors, as follows:
1. In accordance with the Guaranty, the undersigned by its signature
below becomes a Guarantor under the Guaranty with the same force and effect as
if it were an original signatory thereto as a Guarantor and the undersigned
hereby (a) agrees to all the terms and provisions of the Guaranty applicable to
it as a Guarantor thereunder, (b) represents and warrants that the
representations and warranties made by it as a Guarantor thereunder are true
and correct on and as of the date hereof. In furtherance of the foregoing,
each reference to a "Guarantor" or an "Additional Guarantor" in the Guaranty
shall be deemed to include the undersigned and (c) agrees, and the
Administrative Agent hereby acknowledges and agrees, to supplement and amend
the Guaranty to clarify that, notwithstanding anything to the contrary
contained therein, upon the sale or other disposition of any Guarantor
thereunder in accordance with the terms of the Credit Agreement, such Guarantor
shall be
<PAGE> 2
automatically released from all obligations thereunder to the extent that such
sale or other disposition causes such Guarantor to cease being a Domestic
Subsidiary of the Borrower.
2. The undersigned hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by the undersigned
and the Guaranty constitutes a legal, valid and binding obligation of the
undersigned, enforceable against it in accordance with its terms.
3. In the event any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guaranty shall not in any way be affected or impaired.
4. Without limiting the provisions of the Credit Agreement (or any
other Loan Document, including the Guaranty), the undersigned agrees to
reimburse the Administrative Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including reasonable attorneys' fees and
expenses of the Administrative Agent.
5. WITHOUT LIMITING THE EFFECT OF SECTION 20 OF THE GUARANTY, THE
UNDERSIGNED AND THE ADMINISTRATIVE AGENT (ON ITS BEHALF AND ON BEHALF OF THE
SECURED CREDITORS) HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS SUPPLEMENT, THE GUARANTY OR
ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
6. Without limiting the effect of Section 21 of the Guaranty, the
undersigned hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Supplement, the Guaranty or any other Loan
Document, or for recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State
of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof.
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to the undersigned in
care of the Borrower at the Borrower's address referred to in Section 11.2 of
the Credit Agreement or at such other address of which the Administrative Agent
shall have been notified pursuant to Section 11.2 of 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
-2-
<PAGE> 3
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
7. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
8. This Supplement hereby incorporates by reference the provisions of
the Guaranty, which provisions are deemed to be a part hereof, and this
Supplement shall be deemed to be a part of the Guaranty.
9. This Supplement is a Loan Document executed pursuant to the Credit
Agreement and the Guaranty.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-3-
<PAGE> 4
IN WITNESS WHEREOF, the undersigned has duly executed this Supplement
to the Guaranty as of the day and year first above written.
SPALDING SPORTS CENTERS, INC.
By _________________________________
Name: W. Michael Kipphut
Title: Treasurer and
Vice President
ACCEPTED BY:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By ______________________________
Name:
Title:
<PAGE> 1
[EXECUTION COPY]
$25,000,000
LIQUIDITY FACILITY
Dated as of March 30, 1998
among
EVENFLO & SPALDING HOLDINGS CORPORATION,
as a Guarantor,
SPALDING & EVENFLO COMPANIES, INC.,
as the Borrower,
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION,
as Administrative Agent,
MERRILL LYNCH CAPITAL CORPORATION,
as Documentation Agent,
NATIONSBANK N.A. SOUTH,
as Syndication Agent,
and
THE FINANCIAL INSTITUTIONS PARTIES HERETO,
as Lenders.
ARRANGED BY
BANCAMERICA ROBERTSON STEPHENS,
MERRILL LYNCH & CO.,
AND
NATIONSBANC MONTGOMERY SECURITIES LLC
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
DEFINITIONS
1.1. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Other Interpretive Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.3. Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE II
THE COMMITMENTS
2.1. Amounts and Terms of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.2. Loan Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.3. Procedure for Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.4. Voluntary Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.5. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.6. Mandatory Prepayments of Loans and Automatic Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . 16
2.7. Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.8. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.9. Availability of Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.10. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.11. Computation of Fees and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.12. Payments by the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.13. Payments by the Lenders to the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.14. Sharing of Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE III
GUARANTY
3.1. The Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.2. Guaranty Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.3. Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances . . . . . . . . . . . . . . . . . . 21
3.4. Waiver by Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.5. Subrogation and Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.6. Stay of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IV
TAXES
4.1. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
-i-
<PAGE> 3
TABLE OF CONTENTS
CONTINUED
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
4.2. Increased Costs and Reduction of Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.3. Notice from Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.4. Change of Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.5. Notice of Certain Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.6. Replacement of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.7. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE V
CONDITIONS PRECEDENT
5.1. Conditions of Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.2. Conditions to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.2. Corporate Authorization; No Contravention; Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.3. Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.4. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.5. ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.6. Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.7. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.9. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.10. Trademarks, Copyrights, Patents and Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.11. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.12. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.13. Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VII
AFFIRMATIVE COVENANTS
7.1. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.2. Amendments, etc. to Holdings Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.3. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.4. Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.5. Pledged Stock of Foreign Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
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ARTICLE VIII
NEGATIVE COVENANTS
ARTICLE IX
EVENTS OF DEFAULT
9.1. Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.3. Rights Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE X
THE AGENTS
10.1. Appointment and Authorization; "Administrative Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.2. Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.3. Limitation on Liability of Agents and Agent-Related Persons . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.4. Reliance by Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.5. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.6. Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.7. Indemnification of Agents and Agent-Related Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.8. Agents in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.9. Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.10. Withholding Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.11. Collateral Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.12. Copies, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE XI
MISCELLANEOUS
11.1. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.3. No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.4. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.5. Borrower Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.6. Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.7. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
11.8. Assignments, Participations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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11.9. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.10. Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.11. Notification of Addresses, Lending Offices, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.12. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.13. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.14. No Third Parties Benefited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.15. Governing Law and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.16. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.17. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>
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SCHEDULES
<TABLE>
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Schedule A Guarantors
Schedule 2.1 Lenders, Commitments and Loan Percentages
Schedule 6.3 Governmental Authorizations
Schedule 6.4 Litigation
Schedule 6.5 ERISA
Schedule 6.11 Subsidiaries
Schedule 11.2 Lending Offices; Addresses for Notices
</TABLE>
EXHIBITS
<TABLE>
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Exhibit A Form of Notice of Borrowing
Exhibit B [Reserved]
Exhibit C Form of Guaranty
Exhibit D Form of Pledge Agreement
Exhibit E Form of Security Agreement
Exhibit F-1 Form of Legal Opinion of Simpson Thacher & Bartlett, Special Counsel
to the Obligors
Exhibit F-2 Form of Legal Opinion of General Counsel to the Borrower
Exhibit G Form of Note
Exhibit H Form of Assignment and Acceptance
Annex 1 Form of Holdings Credit Agreement Amendment
</TABLE>
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<PAGE> 7
Schedule 11.2
Notices to the Administrative Agent:
Notices to Agent:
Bank of America
Agency Management 10831
1455 Market Street, 12th Fl
San Francisco, CA 94103
Attn.: Patrick W. Zetzman
T 415-436-2776
F 415-436-3425
Payment Office of the Administrative Agent:
Bank of America National Trust
& Savings Association
Agency Administrative Services 5596
1850 Gateway Boulevard, 5th Fl
Concord, CA 94520
Attn.: Annie Cuenco
T: 925-675-8421
F: 925-675-8500
ABA #: 121 000 358
Attn. Agency Administrative Services 5596
Re: Spalding & Evenflo Companies, Inc.
Notices to the Borrower:
Spalding & Evenflo Companies, Inc.
P.O. Box 30101 - Tampa, FL 33630-3101
601 South Harbor Island Blvd.
Suite 200 Tampa, FL 33602-3141
Attn.: Michael Kipphut
T: 813-204-5200
F: 813-204-5219
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<PAGE> 8
LIQUIDITY FACILITY
LIQUIDITY FACILITY, dated as of March 30, 1998, among SPALDING &
EVENFLO COMPANIES, INC., a Delaware corporation (the "Borrower"), EVENFLO &
SPALDING HOLDINGS CORPORATION, a Delaware corporation ("Holdings"), the several
financial institutions from time to time party to this Agreement (collectively,
the "Lenders", and, individually, a "Lender") and BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION ("BofA"), as administrative agent for the Lenders
(in such capacity, the "Administrative Agent"), MERRILL LYNCH CAPITAL
CORPORATION ("Merrill"), as documentation agent for the Lenders (in such
capacity, the "Documentation Agent"), NATIONSBANK N.A. SOUTH ("NationsBank"),
as syndication agent for the Lenders (in such capacity, the "Syndication
Agent"; and, together with the Administrative Agent and the Documentation
Agent, the "Agents" and each an "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower is a direct, wholly-owned subsidiary of Evenflo
& Spalding Holdings Corporation, a Delaware corporation ("Holdings");
WHEREAS, the Borrower has requested that the Lenders make available to
the Borrower a Commitment pursuant to which Loans up to an aggregate principal
amount of $25,000,000 may be borrowed from time to time from and after the
Closing Date to the Commitment Termination Date;
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend the
Commitment and make such Loans;
WHEREAS, all Obligations hereunder and under the other Loan Documents
will be guaranteed by Holdings and each of its Domestic Subsidiaries (other
than the Borrower); and
WHEREAS, all Obligations hereunder and under the other Loan Documents
will be secured on (a) a first priority basis by (i) a pledge of all issued and
outstanding capital stock of each of the Borrower's Domestic Subsidiaries that
are Material Subsidiaries, (ii) 65% of the issued and outstanding capital stock
of all direct Foreign Subsidiaries of the Borrower or a Domestic Subsidiary, in
each case, that are Material Subsidiaries, and (iii) substantially all of the
assets, properties and revenues of Holdings and each of its Domestic
Subsidiaries; and (b) on a pari passu basis with the obligations under, and in
connection with, the Holdings Credit Agreement, by a pledge of all the issued
and outstanding stock of the Borrower;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties hereto hereby agree as follows:
<PAGE> 9
ARTICLE I
DEFINITIONS
1.1. Certain Defined Terms. Except where the context otherwise
requires, capitalized terms used in this Agreement (whether or not underscored)
shall have the meanings ascribed thereto in the Holdings Credit Agreement as in
effect on the date hereof, and the following terms shall have the following
meanings:
"Administrative Agent" means BofA in its capacity as administrative
agent for the Lenders hereunder and under the other Loan Documents, together
with any successor administrative agent appointed in accordance with Section
10.9.
"Administrative Agent's Payment Office" means the address for payments
set forth on Schedule 11.2 or such other address as the Administrative Agent
may from time to time specify in writing.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power (a) to vote 10%
or more of the securities having ordinary voting power for the election of
directors of such other Person or (b) to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, membership interests, by contract or otherwise.
"Agent-Related Persons" means BofA and any successor administrative
agent appointed in accordance with Section 10.9, together with their respective
Affiliates (including, in the case of BofA, BancAmerica Robertson Stephens, in
its role as a Co-Arranger of the Facilities), the Documentation Agent, together
with its Affiliates (including Merrill Lynch & Co., in its role as a
Co-Arranger of the Facilities), the Syndication Agent, together with its
Affiliates (including NationsBanc Montgomery Securities LLC, in its role as a
Co-Arranger of the Facilities), and the officers, directors, employees and
agents of each of the foregoing Persons and Affiliates.
"Agent" and "Agents" are defined in the preamble.
"Agreement" means, on any date, this Liquidity Facility as originally
in effect on the Closing Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"Assignment and Acceptance" has the meaning specified in clause (a) of
Section 11.8.
"Available Commitment Amount" means $25,000,000; provided, that until
(but not after) the effectiveness of the amendment to the Holdings Credit
Agreement as contemplated by the Form of Holdings Credit Agreement Amendment,
the Available Commitment Amount will be reduced by usage of the lien basket
provided in Section 8.1(q) of the Holdings Credit Agreement, as incorporated
herein pursuant to Article VIII hereof (other than usage resulting from the
effectiveness of this Agreement) and by an interest reserve in respect of this
Agreement of $800,000.
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"Available Portion" means, as to any Lender, the product of (a) such
Lender's Commitment and (b) the percentage obtained by dividing the Available
Commitment Amount by the Commitments.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. Section 101, et seq.).
"Bank Book" means the Bank Book, dated March 23, 1998 and delivered by
the Borrower to the Lenders on such date.
"Base Rate" means, for any day, the higher of: (a) 0.50% per annum
above the latest Federal Funds Rate; and (b) the rate of interest in effect for
such day as publicly announced from time to time by BofA in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate set by
BofA based upon various factors including BofA's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above or below such announced
rate.) Any change in the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement of such
change, or on a daily basis in the case of clause (a) above.
"BofA" has the meaning specified in the preamble.
"Borrower" has the meaning specified in the preamble.
"Borrowing" means a borrowing hereunder consisting of Loans made to
the Borrower on the same day by the Lenders under Article II.
"Borrowing Date" means any date on which a Borrowing occurs under
Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial lenders in New York City, Chicago, Illinois or San
Francisco, California are authorized or required by law to close.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any Lender or of any corporation controlling a
Lender.
"capital stock" means, with respect to any Person, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock of, or ownership interests in, such Person, including if such
Person is a partnership, partnership interests (whether general or limited) and
any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
such partnership.
"Casualty Event" means the damage, destruction or condemnation, as the
case may be, of any property of the Borrower or any of its Subsidiaries.
"Casualty Proceeds" means, with respect to any Casualty Event, the
amount of any insurance proceeds or condemnation awards received by the
Borrower or any of its Subsidiaries in connection therewith.
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"CERCLA" has the meaning specified in the definition of "Environmental
Laws."
"Change of Control" means, and shall be deemed to have occurred if:
(a) at any time Continuing Directors shall not constitute a majority of the
Board of Directors of the Borrower; (b) KKR, its successors and its Affiliates
and management of the Borrower shall cease to own in the aggregate, directly or
indirectly, beneficially and of record, a majority of the outstanding Voting
Stock of the Borrower (other than as the result of (i) one or more public
offerings of common stock of the Borrower or (ii) a widely distributed private
placement of common stock of the Borrower that does not provide any special
director designation or special election rights or other special corporate
governance rights to the holders of such shares, in each case whether by the
Borrower or another Person); or (c) any Person or "group" (within the meaning
of Section 13(d) or 14(d) of the Exchange Act) shall at any time have acquired
direct or indirect beneficial ownership of a percentage of the outstanding
Voting Stock of the Borrower that exceeds in the aggregate the percentage of
such Voting Stock then beneficially owned, directly or indirectly, by KKR, its
successors and its Affiliates and management of the Borrower or (d) a "Change
of Control" as defined in the Holdings Credit Agreement) shall have occurred.
"Closing Date" means the date on which the conditions precedent set
forth in Section 5.1 have been satisfied.
"Co-Arrangers" means, collectively, BancAmerica Robertson Stephens,
Merrill Lynch & Co., and NationsBanc Montgomery Securities LLC.
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Commitment" has the meaning specified in Section 2.1; collectively,
for all Lenders, the "Commitments".
"Commitment Fee" means the fee set forth in clause (b) of Section
2.10.
"Commitment Termination Date" means the earlier to occur of:
(a) August 31, 1998; and
(b) the date on which the Commitments terminate in accordance
with the provisions of this Agreement.
"Continuing Director" means, at any date, an individual (a) who is a
member of the Board of Directors of the Borrower, as the case may be, on the
Closing Date, (b) who, as at such date, has been a member of such Board of
Directors for at least the 12 preceding months (or, for the period comprising
the first 12 months after the Closing Date, has been a member of such Board of
Directors at least since the Closing Date), or (c) who has been nominated to be
a member of such Board of Directors, directly or indirectly, by KKR or Persons
nominated by KKR or has been nominated to be a member of such Board of
Directors by a majority of the other Continuing Directors then in office.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other
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<PAGE> 12
instrument, document or agreement to which such Person is a party or by which
it or any of its property is bound.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Designated Property" means (a) the real property upon which the plant
located in Chicopee, Massachusetts and the plant located in Piqua, Ohio are
situated, and all buildings, other improvements and fixtures thereon, or (b)
any other single plant in substitution of any one of the foregoing plants
selected by the Agents for which the provision of a lien thereon is reasonably
practicable.
"Disposition" means the sale, conveyance, issuance or other
disposition of any property, business or assets by the Borrower or any
Restricted Subsidiary (including receivables and capital stock of or owned by
the Borrower or such Restricted Subsidiary, and in all cases whether now owned
or hereafter acquired), other than (a) the issuance of capital stock of the
Borrower, (b) sales, conveyances or other dispositions in the ordinary course
of business (including sales, conveyances or other dispositions of inventory in
the ordinary course) and (c) sales of accounts receivable and capital stock
owned by any Domestic Subsidiary to S&E Finance, effected on not more than one
occasion during any Fiscal Year of the Borrower, and the consideration for
which consists solely of a promissory note of S&E Finance payable to such
Domestic Subsidiary, provided that (i) the transferor thereof shall repurchase
all such accounts receivable and capital stock from S&E Finance not later than
five Business Days following the date of the original transfer thereof, the
consideration for which shall consist solely of the creation of an intercompany
liability on the books of the repurchasing transferor that is promptly set off
by S&E Finance against its obligations under the promissory note issued by it
to such repurchasing transferor, (ii) no such transfer shall be effected if a
Default or an Event of Default shall have occurred and be continuing and (iii)
no such transfer shall be effected unless, giving effect to any liability or
obligation incurred in connection therewith, S&E Finance shall be solvent
immediately before and after giving effect to the acquisition of such accounts
receivable and capital stock. For purposes of the immediately preceding
sentence, S&E Finance shall be solvent if (A) each of the fair value and the
present fair saleable value of S&E Finance's assets is greater than its debts
and other liabilities (including contingent, unmatured and unliquidated debts
and liabilities) and the amount required to pay such debts and liabilities as
such debts and liabilities become absolute and mature, (B) S&E Finance is able
and expects to be able to pay its debts and other liabilities (including
contingent, unmatured and unliquidated debts and liabilities) as they mature
and (C) S&E Finance has sufficient capital to carry on its business as
conducted and as proposed to be conducted.
"Documentation Agent" means Merrill Lynch Capital Corporation, in its
capacity as documentation agent for the Lenders hereunder and under the other
Loan Documents.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"Domestic Subsidiary" means any Subsidiary that is not a Foreign
Subsidiary.
"Eligible Assignee" means and includes each Holdings Credit Agreement
Lender as of record on March 23, 1998.
"Environmental Laws" means any and all present and future laws,
statutes, ordinances, rules, regulations, requirements, restrictions, permits,
orders, and determinations of any governmental
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authority that have the force and effect of law, pertaining to pollution
(including hazardous, toxic or dangerous substances), natural resources or the
environment, whether federal, state, or local, including environmental response
laws such as the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, and as the same may be further amended
(hereinafter collectively called "CERCLA").
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with Holdings within the meaning of Section
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"ERISA Event" means any of the following if such event or occurrence
could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect: (a) the failure to make a required contribution to a
Pension Plan if such failure is sufficient to give rise to a Lien under Section
302(f) of ERISA; (b) a withdrawal by Holdings or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by Holdings or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon Holdings or any ERISA Affiliate.
"Event of Default" means any of the events or circumstances specified
in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"Facilities" means the credit facilities hereunder, i.e., to provide
Loans pursuant to the Commitment.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Administrative Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions selected by the Administrative Agent.
"Fee Letter" has the meaning specified in clause (a) of Section 2.10.
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"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" has the meaning specified in Section 7.14 of the
Holdings Credit Agreement, as incorporated herein pursuant to Article VII
hereof.
"Fiscal Year End" has the meaning specified in Section 7.14 of the
Holdings Credit Agreement, as incorporated herein pursuant to Article VII
hereof.
"Foreign Subsidiary" means any Subsidiary of the Borrower (a) which is
organized under the laws of any jurisdiction outside of the United States of
America, (b) which conducts the major portion of its business outside of the
United States of America and (c) all or substantially all of the property and
assets of which are located outside of the United States of America.
"Form of Holdings Credit Agreement Amendment" means the form of
amendment to the Holdings Credit Agreement, attached hereto as Annex 1,
describing the amendments and modifications to certain terms and provisions of
the Holdings Credit Agreement.
"FRB" means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of Article
VIII, including defined terms as used therein, are subject (to the extent
provided therein) to the immediately succeeding sentence. Except as otherwise
specifically provided herein, all computations determining compliance with
Article VIII, including definitions used therein, shall utilize accounting
principles and policies in effect at the time of the preparation of, and in
conformity with those used to prepare, the historical financial statements of
Holdings described in Section 6.9. At any time the computations determining
compliance with Article VIII utilize accounting principles different from those
utilized in the financial statements furnished to the Lenders pursuant to
Section 7.1 of the Holdings Credit Agreement, as incorporated herein pursuant
to Article VII hereof, such financial statements shall be accompanied by
reconciliation work-sheets.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, including any corporation or other entity owned or controlled,
through stock or capital ownership or otherwise, by any of the foregoing.
"Guarantors" means, collectively, at any time, the guarantors parties
at such time to the Guaranty.
"Guaranty" means the Guaranty set forth in Article III and the
Guaranty to be duly executed and delivered (a) initially, by each of the
Subsidiaries listed on Schedule A hereto pursuant to this Agreement and (b)
thereafter, in addition thereto by any Person which becomes a Subsidiary,
substantially in the form of Exhibit C hereto, as amended, supplemented,
amended and restated or otherwise modified from time to time.
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"Hazardous Materials" means any substance that is defined or listed as
a hazardous, toxic or dangerous substance under any present or future
Environmental Law or that is otherwise regulated or prohibited or subject to
investigation or remediation under any present or future Environmental Law
because of its hazardous, toxic, or dangerous properties, including (a) any
substance that is a "hazardous substance" under CERCLA and (b) petroleum wastes
or products.
"Holdings" has the meaning specified in the preamble.
"Holdings Credit Agreement" means the Credit Agreement, dated as of
September 30, 1996, among Holdings, the various financial institutions from
time to time party thereto, BofA, as swing line lender, fronting lender and
administrative agent, Merrill, as documentation agent, and NationsBank N.A.
South, as syndication agent, as amended or modified prior to the date hereof
and as further amended, supplemented, amended and restated or otherwise
modified from time to time.
"Holdings Credit Agreement Lender" means each financial institution
party to, and considered a "Lender" under, the Holdings Credit Agreement as of
March 23, 1998.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services that in
accordance with GAAP would be shown on the liability side of the balance sheet
of such Person; (c) obligations incurred in connection with banker's
acceptances and the face amount of all letters of credit issued for the account
of such Person and, without duplication, all drafts drawn thereunder; (d) all
Capitalized Lease Liabilities (as defined in the Holdings Credit Agreement, as
incorporated by reference herein pursuant to Article VIII hereof); (e) all
Indebtedness referred to in clauses (a) through (d) above secured by any Lien
upon or in property owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; (f) all monetary
obligations of such Person under Swap Contracts; and (g) without duplication,
all Contingent Obligations (as defined in the Holdings Credit Agreement, as
incorporated by reference herein pursuant to Article VIII hereof) of such
Person; provided that Indebtedness shall not include trade payables and accrued
expenses, in each case arising in the ordinary course of business.
"Indemnified Liabilities" has the meaning specified in clause (a) of
Section 11.5.
"Indemnified Person" has the meaning specified in clause (a) of
Section 11.5.
"Insolvency Proceeding" means, with respect to any Person, (a) any
case, action or proceeding with respect to such Person before any court or
other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, rehabilitation, dissolution, winding-up
or relief of debtors or (b) any general assignment for the benefit of
creditors, composition, marshaling of assets for creditors or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors, undertaken under U.S. Federal, state or foreign law, including
the Bankruptcy Code.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"KKR" means Kohlberg Kravis Roberts & Co., L.P.
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"Lender" and "Lenders" have the meaning specified in the preamble,
including each financial institution identified on Schedule 2.1 and each
permitted successor or assign thereof. References to the "Lenders" shall
include BofA, but not in its capacity as Administrative Agent; for purposes of
classification only, to the extent that BofA may have any rights or obligations
in addition to those of the Lenders due to its status as Administrative Agent,
its status as such will be specifically referenced.
"Lender Default" means (a) the refusal (which has not been retracted)
of a Lender to make available its portion of any Borrowing or (b) a Lender
having notified the Administrative Agent and/or the Borrower that it does not
intend to comply with its obligations under Section 2.1, in the case of either
clause (a) or clause (b) above, as a result of the appointment of a receiver or
conservator with respect to such Lender at the direction or request of any
regulatory agency or authority.
"Lending Office" means, as to any Lender, the office or offices of
such Lender specified as its "Lending Office" on Schedule 11.2, or such other
office or offices as such Lender may from time to time notify the Borrower and
the Administrative Agent.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, charge, lien (statutory or other), escrow or similar encumbrance
of any kind, or any other type of similar preferential arrangement (including
any agreement to give any of the foregoing, any conditional sale or other title
retention agreement or any lease in the nature thereof).
"Loan" and "Loans" have the respective meanings specified in Section
2.1.
"Loan Documents" means this Agreement, any Notes, the Guaranty, the
Pledge Agreement, the Security Agreement, each Mortgage and the Fee Letter.
"Loan Percentage" means, as to any Lender, the percentage which (a)
the amount of such Lender's Commitment (or, after termination or expiration of
the Commitments, the outstanding principal amount of such Lender's Loans) is of
(b) the aggregate amount of all Commitments (or, after termination or
expiration of the Commitments, the outstanding principal amount of all Loans).
"Majority Lenders" means, at any time, Lenders having or holding at
least 51% of the sum of the aggregate Commitments (or, after termination or
expiration of the Commitments, the outstanding principal amount of all Loans)
at such time.
"Material Adverse Change" means any change in the business, assets,
operations, properties or financial condition of the Borrower and its
Restricted Subsidiaries taken as a whole that would materially adversely affect
the ability of the Borrower and the other Obligors taken as a whole to perform
their obligations under this Agreement and the other Loan Documents taken as a
whole.
"Material Adverse Effect" means a circumstance or condition affecting
the business, assets, operations, properties or financial condition of the
Borrower and its Restricted Subsidiaries taken as a whole that would materially
adversely affect (a) the ability of the Borrower and the other Obligors taken
as a whole to perform their obligations under this Agreement and the other Loan
Documents taken as a whole or (b) the rights and remedies of the Administrative
Agent and the Lenders under this Agreement and the other Loan Documents taken
as a whole.
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"Material Subsidiary" means, at any time, S&E Finance and each
Subsidiary having at such time either (a) net sales (on a consolidated basis,
excluding revenues received by any Subsidiary from the Borrower or any other
Subsidiary) for the applicable Test Period in excess of 5% (or, in the case of
Foreign Subsidiaries for purposes of Section 7.11 of the Holdings Credit
Agreement, as incorporated herein pursuant to Article VII hereof, only, 10%) of
the net sales of the Borrower and its Subsidiaries for such Test Period or (b)
total assets (on a consolidated basis), as of the last day of the preceding
Fiscal Quarter, constituting in excess of 5% (or, in the case of Foreign
Subsidiaries for purposes of Section 7.11 of the Holdings Credit Agreement, as
incorporated herein pursuant to Article VII hereof, only, 10%) of the total
assets of the Borrower and its Subsidiaries as of such day, in each case, based
upon the Borrower's most recent annual or quarterly financial statements
delivered to the Administrative Agent under Section 7.1 of the Holdings Credit
Agreement, as incorporated herein pursuant to Article VII hereof, in accordance
with GAAP (it being acknowledged and understood that, in the event the
determination of whether a Subsidiary is a Material Subsidiary is to be made on
or about the date such Subsidiary was created or acquired, such determination
shall be made on a pro forma basis as if such Subsidiary were a Subsidiary at
the commencement of such Test Period for the purposes of clause (a) above and
on the last day of such Fiscal Quarter for the purposes of clause (b) above).
"Merrill" has the meaning specified in the preamble.
"Mortgage" means, collectively, each mortgage or deed of trust
executed and delivered pursuant to the terms of this Agreement, including
Section 7.4 of the Holdings Credit Agreement, as incorporated herein pursuant
to Article VII hereof, in form and substance reasonably satisfactory to the
Agents.
"Multiemployer Plan" means a "multiemployer plan," within the meaning
of Section 4001(a)(3) of ERISA, with respect to which the Borrower or any ERISA
Affiliate may have any liability.
"NationsBank" has the meaning specified in the preamble.
"Net Disposition Proceeds" means, as to any Disposition by a Person
(other than a Disposition permitted pursuant to clause (a), (b) or (c) of
Section 8.2 of the Holdings Credit Agreement, as incorporated herein pursuant
to Article VIII hereof), proceeds in cash as and when received by such Person,
net of (a) the costs and expenses relating to such Disposition, (b) the amount
of all taxes paid or reasonably estimated to be payable by such Person in
connection therewith, but Net Disposition Proceeds shall include the excess, if
any, of the estimated taxes payable in connection with such Disposition over
the actual amount of taxes paid, immediately after the payment of such taxes,
(c) amounts required to be applied to repay principal, interest and prepayment
premiums and penalties on Indebtedness secured by a Lien on the asset which is
the subject of such Disposition, and (d) the amount of any reasonable reserve
established in accordance with GAAP against any liabilities (other than any
taxes deducted pursuant to clause (b) above) associated with the assets sold or
disposed of and retained by the Borrower or any of its Restricted Subsidiaries
(provided that the amount of any subsequent reduction of such reserve (other
than in connection with a payment in respect of any such liability) shall be
deemed to be Net Disposition Proceeds realized on the date of such reduction).
"Net Issuance Proceeds" means, as to any issuance of indebtedness for
borrowed money or incurrence of Capitalized Lease Liabilities by any Person,
cash proceeds received by such Person in connection therewith, net of costs and
expenses paid or incurred in connection therewith.
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"Non-U.S. Lender" has the meaning specified in clause (d) of Section
4.1.
"Non-U.S. Participant" means a Participant that is not incorporated or
organized in or under the laws of the United States of America or a state
thereof.
"Note" means a promissory note, if any, executed by the Borrower in
favor of a Lender pursuant to clause (b) of Section 2.2, in substantially the
form of Exhibit G hereto, and also means all promissory notes accepted from
time to time in substitution therefor or renewal thereof.
"Notice of Borrowing" means a notice in substantially the form of
Exhibit A hereto.
"Obligations" means, at any time, all monetary obligations of any type
or description owing at such time by the Borrower and any other Obligor to any
Lender, the Administrative Agent or any Indemnified Person under this Agreement
or any other Loan Document, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising.
"Obligor" means the Borrower, Holdings and each other Guarantor.
"Organization Documents" means, for any corporation, the certificate
or articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such
corporation.
"Originating Lender" has the meaning specified in clause (e) of
Section 11.8.
"Other Taxes" means any present or future stamp, court or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, this
Agreement or any other Loan Document.
"Participant" has the meaning specified in clause (e) of Section 11.8.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under
ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) with
respect to which the Borrower or any ERISA Affiliate may have any liability.
"Person" means an individual, a partnership, a corporation, a limited
liability company, a business trust, a joint stock company, a trust, an
unincorporated association, a joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which Holdings sponsors or maintains or to which Holdings makes, is
making or is obligated to make contributions and includes any Pension Plan.
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"Pledge Agreement" means the Pledge Agreement executed and delivered
by Holdings, the Borrower and each Domestic Subsidiary which is a Material
Subsidiary pursuant to Section 5.1, substantially in the form of Exhibit D
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.
"Pro Rata Share" means, as to any Lender at any time, its Loan
Percentage.
"Register" has the meaning specified in clause (c) of Section 11.8.
"Replaced Lender" has the meaning specified in Section 4.6.
"Replacement Lender" has the meaning specified in Section 4.6.
"Requirement of Law" means, as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or of a Governmental Authority, in
each case applicable to or binding upon the Person or any of its property or to
which the Person or any of its property is subject.
"Responsible Officer" means, with respect to any Person, its chief
executive officer, its president or any vice president, managing director,
treasurer, controller or other officer thereof having substantially the same
authority and responsibility; or, with respect to compliance with financial
covenants, the chief financial officer, the treasurer or the controller of the
Borrower, or any other officer having substantially the same authority and
responsibility.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Security Agreement" means the Security Agreement executed and
delivered by the Borrower and each Domestic Subsidiary pursuant to Section 5.1,
substantially in the form of Exhibit E hereto, as amended, supplemented,
amended and restated or otherwise modified from time to time.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than 50% of the voting stock, membership interests or other
equity interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Borrower.
"Subsidiary Guarantor" means each Domestic Subsidiary of the Borrower.
"Swap Contract" means any agreement relating to any transaction that
is a rate swap, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap or option, bond, note or bill option,
interest rate option, forward foreign exchange transaction, cap, collar or
floor transaction, currency swap, cross-currency rate swap, swap option,
currency option or any other, similar transaction (including any option to
enter into any of the foregoing) or any combination of the foregoing, and,
unless the context otherwise clearly requires, any master agreement relating to
or governing any or all of the foregoing.
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"Syndication Agent" means NationsBank, in its capacity as syndication
agent for the Lenders hereunder and under the other Loan Documents.
"Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of
each Lender and the Administrative Agent, respectively, taxes imposed on any
Lender or the Administrative Agent as a result of a present or former
connection between such Lender or the Administrative Agent and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from such Lender or the Administrative Agent having executed, delivered
or performed its obligations or received a payment under, or enforced, this
Agreement).
"Test Period" means, for any determination under this Agreement at any
time, the four consecutive Fiscal Quarters of the Borrower then last ended.
"Trademarks" means, collectively, trademarks, service marks, trade
names, logos, trade dress and trademark and service mark applications,
registrations and recordings, including all rights relating thereto arising
under common law.
"Transferee" has the meaning specified in clause (f) of Section 11.8.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Plan pursuant to Section 412 of the Code for the applicable plan year.
"United States" and "U.S." each means the United States of America.
"Voting Stock" means, with respect to any Person, shares of such
Person's capital stock having the right to vote for the election of directors
of such Person under ordinary circumstances.
1.2. Other Interpretive Provisions. (a) The meanings of defined
terms are equally applicable to the singular and plural forms of the defined
terms.
(b) The words "hereof," "herein," "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding", and the word "through"
means "to and including."
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(iv) The term "property" includes any kind of property or
asset, real, personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments, supplements and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document and (ii)
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this Agreement.
(f) (i) This Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by counsel to the Agents,
the Borrower and the other parties, and are the products of all parties.
(ii) No Agent and no Lender has any fiduciary relationship
with or duty to the Borrower or any of its Subsidiaries arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Agents and Lenders, on one hand, and the Borrower, on
the other hand, in connection herewith or therewith is solely that of debtor
and creditor.
(iii) No joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.
1.3. Accounting Principles. Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
ARTICLE II
THE COMMITMENTS
2.1. Amounts and Terms of Commitments. Each Lender severally agrees,
on the terms and conditions set forth herein (including Section 2.9), to make
loans to the Borrower (each such loan, a "Loan"; collectively, the "Loans")
from time to time on any Business Day during the period from the Closing Date
to the Commitment Termination Date in an aggregate amount not to exceed at any
time outstanding the amount specified for such Lender on Schedule 2.1 (such
amount, as the same may be reduced under Section 2.4 or clause (d) of Section
2.6, or as a result of one or more assignments under Section 11.8, such
Lender's "Commitment"); provided, however, that, after giving effect to any
Borrowing of Loans, the aggregate principal amount of all outstanding Loans
shall not at any time exceed the Available Commitment Amount. Within the limits
of the Available Portion of each Lender's Commitment, and subject to the other
terms and conditions hereof, the Borrower may borrow under this Section 2.1,
repay under Section 2.5 and reborrow from time to time under this Section 2.1.
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2.2. Loan Accounts. (a) The Loans made by each Lender shall be
evidenced by one or more loan accounts or records maintained by such Lender in
the ordinary course of business. The loan accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent clearly
demonstrable error of the amount of the Loans made by the Lenders to or for the
account of the Borrower and the interest and payments thereon. Any failure so
to record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrower hereunder to pay any amount owing with
respect to the Loans.
(b) Upon the request of any Lender made through the Administrative
Agent, solely to facilitate the pledge or assignment of its Loans to any
Federal Reserve Bank pursuant to clause (g) of Section 11.8, the Loans made by
such Lender may be evidenced by one or more Notes, instead of or in addition to
loan accounts. Each such Lender is irrevocably authorized by the Borrower to
endorse on the schedules annexed to its Note(s) the date, amount and maturity
of each Loan made by it and the amount of each payment of principal made by the
Borrower with respect thereto. Each such Lender's record shall be conclusive
absent clearly demonstrable error; provided, however, that the failure of a
Lender to make, or an error in making, a notation thereon with respect to any
Loan shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any such Note to such Lender.
2.3. Procedure for Borrowing. (a) Each Borrowing shall be made upon
the Borrower's irrevocable written or telephonic notice delivered to the
Administrative Agent (if in writing) in the form of a Notice of Borrowing (any
such notice to be received by the Administrative Agent not later than 11:00
a.m. (New York City time) on the requested Borrowing Date (if telephonic,
confirmed thereafter in writing in the form of a Notice of Borrowing),
specifying:
(i) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $500,000 or any multiple of $100,000 in
excess thereof; and
(ii) the requested Borrowing Date, which shall be a Business
Day.
(b) The Administrative Agent will promptly notify each Lender of its
receipt of any Notice of Borrowing and of the amount of such Lender's Pro Rata
Share of that Borrowing.
(c) Each Lender will make the amount of its Pro Rata Share of each
Borrowing available to the Administrative Agent for the account of the Borrower
at the Administrative Agent's Payment Office by 1:00 p.m. (New York City time)
on the Borrowing Date requested by the Borrower in funds immediately available
to the Administrative Agent. The proceeds of all such Loans will then be made
available to the Borrower by the Administrative Agent at such office by
crediting the account of the Borrower on the books of BofA (or any successor to
BofA as Administrative Agent) with the aggregate of the amounts made available
to the Administrative Agent by the Lenders or by wire transfer in accordance
with written instructions provided to the Administrative Agent by the Borrower,
in each case in like funds as received by the Administrative Agent.
(d) Without in any way limiting the obligation of the Borrower to
confirm in writing any notice it may give hereunder by telephone, the
Administrative Agent may act prior to receipt of written confirmation without
liability upon the basis of such telephonic notice believed by the
Administrative Agent in good faith to be from a Responsible Officer of the
Borrower (or a designee of such Responsible Officer). In each such case the
Borrower hereby waives the right to dispute the Administrative Agent's record
of the terms of any such telephonic notice.
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2.4. Voluntary Termination or Reduction of Commitments. The Borrower
may, upon not less than three Business Days' prior written notice to the
Administrative Agent, terminate the Commitments or permanently reduce the
Commitments by an aggregate minimum amount of $1,000,000 or any multiple of
$100,000 in excess thereof; unless, after giving effect thereto and to any
prepayments of Loans made on the effective date thereof, the then-outstanding
principal amount of the Loans would exceed the amount of the Commitments then
in effect. Once reduced in accordance with this Section, the Commitments may
not be increased. Any reduction of the Commitments shall be applied to each
Lender according to its Loan Percentage. All accrued commitment fees to but
not including the effective date of any termination in full of all Commitments
shall be paid on the effective date of such termination.
2.5. Optional Prepayments. The Borrower may, at any time or from
time to time, upon prior irrevocable written notice to the Administrative Agent
by 11:00 a.m. (New York City time) one Business Day in advance, prepay Loans,
in whole or in part, in minimum amounts of $500,000 or any multiple of $100,000
in excess thereof. Such notice of prepayment shall specify the date and amount
of such prepayment.
2.6. Mandatory Prepayments of Loans and Automatic Reduction of
Commitments. (a) Following the repayment in full of all Term Loans (as such
term is defined in the Holdings Credit Agreement) and all accrued but unpaid
interest thereon:
(i) Asset Dispositions. In the event that the Net
Disposition Proceeds of any Disposition (such Disposition, a "Current
Disposition") (other than a Disposition permitted pursuant to clause
(a), (b) or (c) of Section 8.2 of the Holdings Credit Agreement, as
incorporated herein pursuant to Article VIII hereof), and of all prior
Dispositions as to which a prepayment has not yet been made under this
subclause (i), shall equal or exceed $250,000 then, the Borrower or
such Subsidiary shall, concurrently with the receipt of the Net
Disposition Proceeds of the Current Disposition, apply 100% of the Net
Disposition Proceeds of the Current Disposition and all such prior
Dispositions.
(ii) Indebtedness Issuance. If, subject to the written
consent of the Majority Lenders, the Borrower shall issue Indebtedness
for borrowed money or incur Capitalized Lease Liabilities not
otherwise permitted to be issued or incurred pursuant to Article VIII,
the Borrower shall, concurrently with the receipt by the Borrower of
Net Issuance Proceeds of such issuance or incurrence, make a mandatory
prepayment of the Loans (and after such Loans are paid in full,
accrued and unpaid interest and all other Obligations) in an aggregate
amount equal to 100% of such Net Issuance Proceeds.
(iii) Casualty Proceeds. If during any Fiscal Year one or
more Casualty Events shall have occurred for which the Borrower or any
Subsidiary shall receive Casualty Proceeds in excess of $1,000,000
during such Fiscal Year, then the Borrower or such Subsidiary may
(provided that no payment Default or Event of Default is continuing at
such time), within 365 days after the receipt by the Borrower or such
Subsidiary of such Casualty Proceeds, reinvest up to 100% of such
Casualty Proceeds to replace or repair the assets that were the
subject of such Casualty Event(s). Any Casualty Proceeds that are not
reinvested in accordance with the previous sentence shall be
applied to prepay Loans (and after such Loans are paid in full,
accrued and unpaid interest and all other Obligations), (x) in the
case of the continuance of a payment Default or an Event of Default at
such time, on the day such Casualty Proceeds are
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received, in an amount equal to 100% of such Casualty Proceeds, and
(y) otherwise on the Business Day immediately succeeding the last
day of such 365-day period, in an aggregate amount equal to the
portion of such Casualty Proceeds not so reinvested.
(b) Outstanding Loans. If on any date the outstanding principal
amount of the Loans exceeds the Available Commitment Amount then in effect, the
Borrower shall promptly repay on such date the principal amount of Loans in an
amount equal to such excess.
(c) Telephonic Notice. Without in any way limiting the obligation of
the Borrower to confirm in writing any notice it may give hereunder by
telephone, the Administrative Agent may act prior to receipt of written
confirmation without liability upon the basis of such telephonic notice
believed by the Administrative Agent in good faith to be from a Responsible
Officer of the Borrower (or a designee of such Responsible Officer). In each
such case the Borrower hereby waives the right to dispute the Administrative
Agent's record of the terms of any such telephonic notice.
(d) Automatic Reduction of Commitment Amount. Any prepayment made
pursuant to Section 2.6(a) shall result in an automatic reduction of the
Commitment Amount equal to the amount so prepaid.
2.7. Repayment. The Borrower shall repay to the Lenders on the
Commitment Termination Date the aggregate principal amount of Loans outstanding
on such date, together with all accrued and unpaid interest thereon and all
other Obligations owing under this Agreement.
2.8. Interest. (a) Rate. Each Loan shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to the Base Rate plus 1.50%.
(b) Payment Dates. Interest on each Loan shall be paid in arrears
the last Business Day of each calendar month.
(c) Default Rate. Notwithstanding clause (a) of this Section, if any
amount of principal of or interest on any Loan or any other monetary Obligation
is not paid in full when due (whether at stated maturity, by acceleration,
demand or otherwise), the Borrower agrees to pay interest on such unpaid
principal or interest or other monetary Obligation, from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before any entry of judgment thereon to the extent permitted by law, payable on
demand, at a fluctuating rate per annum equal to the Base Rate plus 3.5%.
(d) Maximum Rate. Anything herein to the contrary notwithstanding,
the obligations of the Borrower to any Lender hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Lender would be contrary
to the provisions of any law applicable to such Lender limiting the highest
rate of interest that may be lawfully contracted for, charged or received by
such Lender, and in such event the Borrower shall pay such Lender interest at
the highest rate permitted by applicable law.
2.9. Availability of Facilities. No Lender shall be permitted or
required, and the Borrower shall not be entitled to request any Lender, to make
any Loan if the aggregate principal amount of all
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Revolving Loans, Swingline Loans and Special Facility Obligations (in each
case, as such terms are defined in the Holdings Credit Agreement) outstanding
at such time is less than $230,000,000.
2.10. Fees. (a) Fees. The Borrower shall pay a fee to each
Co-Arranger for such Co-Arranger's account, in each case, as required by the
letter agreement (the "Fee Letter") among the Borrower, the Co-Arrangers and
the Agents dated as of March 30, 1998.
(b) Commitment Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender a commitment fee on the average daily
unused Available Portion of such Lender's Commitment, computed and payable on a
monthly basis in arrears on the last Business Day of each calendar month based
upon the daily utilization for that month, at a rate per annum equal to 0.50%.
Such commitment fee shall accrue from the Closing Date to the Commitment
Termination Date, with the final payment to be made in any event on the
Commitment Termination Date. The commitment fees provided in this clause shall
accrue at all times after the above-mentioned commencement date, including at
any time during which one or more conditions in Article V are not met.
2.11. Computation of Fees and Interest. (a) All computations of
interest on Loans and commitment fees shall be made on the basis of a year of
365 days and actual days elapsed. Interest and fees shall accrue during each
period during which interest or such fees are computed from (and including) the
first day thereof to (but excluding) the last day thereof.
(b) Each determination of an interest rate by the Administrative
Agent shall be conclusive and binding on the Borrower and the Lenders in the
absence of clearly demonstrable error. The Administrative Agent will, at the
request of the Borrower or any Lender, deliver to the Borrower or such Lender,
as the case may be, a statement showing the quotations used by the
Administrative Agent in determining any interest rate and the resulting
interest rate.
2.12. Payments by the Borrower. (a) All payments to be made by the
Borrower shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Borrower shall be made
to the Administrative Agent for the account of the Lenders at the
Administrative Agent's Payment Office, and shall be made in dollars and in
immediately available funds, no later than 12:00 noon (New York City time) on
the date specified herein. The Administrative Agent will promptly distribute
to each Lender its Pro Rata Share (or other applicable share as expressly
provided herein) of such payment in like funds as received. Any payment
received by the Administrative Agent later than 3:00 p.m. (New York City time)
shall be deemed to have been received on the following Business Day and any
applicable interest or fee shall continue to accrue.
(b) Whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
(c) Unless the Administrative Agent receives written notice from the
Borrower prior to the date on which any payment is due to the Lenders that the
Borrower will not make such payment in full as and when required, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower has not made
such payment in full to the Administrative Agent, each Lender shall repay to
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the Administrative Agent on demand such amount distributed to such Lender,
together with interest thereon at the Federal Funds Rate for each day from the
date such amount is distributed to such Lender until the date repaid.
2.13. Payments by the Lenders to the Administrative Agent. (a)
Unless the Administrative Agent receives written notice from a Lender prior to
the Closing Date or, with respect to any Borrowing after the Closing Date, at
least one Business Day prior to the date of such Borrowing, that such Lender
will not make available as and when required hereunder to the Administrative
Agent for the account of the Borrower the amount of that Lender's Pro Rata
Share of the Borrowing, the Administrative Agent may assume that each Lender
has made such amount available to the Administrative Agent in immediately
available funds on the Borrowing Date and the Administrative Agent may (but
shall not be so required), in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent any
Lender shall not have made its full amount available to the Administrative
Agent in immediately available funds and the Administrative Agent in such
circumstances has made available to the Borrower such amount, that Lender shall
on the Business Day following such Borrowing Date make such amount available to
the Administrative Agent, together with interest at the Federal Funds Rate for
each day during such period. A notice of the Administrative Agent submitted to
any Lender with respect to amounts owing under this clause (a) shall be
conclusive, absent clearly demonstrable error. If such amount is so made
available, such payment to the Administrative Agent shall constitute such
Lender's Loan on the date of Borrowing for all purposes of this Agreement. If
such amount is not made available to the Administrative Agent on the Business
Day following the Borrowing Date, the Administrative Agent will notify the
Borrower of such failure to fund and, upon demand by the Administrative Agent,
the Borrower shall immediately pay such amount to the Administrative Agent for
the Administrative Agent's account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Lender to make any Loan on any Borrowing Date
shall not relieve any other Lender of any obligation hereunder to make a Loan
on such Borrowing Date, but no Lender shall be responsible for the failure of
any other Lender to make the Loan to be made by such other Lender on any
Borrowing Date.
2.14. Sharing of Payments, etc. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off or otherwise) in excess of its ratable share (or other share
contemplated hereunder) of such Loans, such Lender shall immediately (a) notify
the Administrative Agent of such fact and (b) purchase from the other Lenders
such participations in the Loans made by them as shall be necessary to cause
such purchasing Lender to share the excess payment pro rata with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender, such purchase shall to that
extent be rescinded and each other Lender shall repay to the purchasing Lender
the purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender may,
to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 11.10) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. The Administrative Agent will
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keep records (which shall be conclusive and binding in the absence of clearly
demonstrable error) of participations purchased under this Section and will in
each case notify the Lenders following any such purchases or repayments.
ARTICLE III
GUARANTY
3.1. The Guaranty. Holdings hereby unconditionally guarantees the
full and punctual payment (whether at stated maturity, upon acceleration or
otherwise) of the principal of and interest of the Loans and all other
Obligations of the Borrower and each other Obligor hereunder and under any
other the Loan Document. Upon failure by the Borrower or any such other Obligor
to pay punctually any such amount, Holdings shall be obligated forthwith on
demand to pay the amount not so paid at the place and in the manner specified
in this Agreement or the other Loan Documents.
3.2. Guaranty Unconditional. The obligations of Holdings hereunder
shall be unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of the Borrower or any other Obligor under the
Loan Documents, by operation of law or otherwise;
(b) any modification or amendment of or supplement to the Loan
Documents;
(c) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of the Borrower or any other
Obligor under the Loan Documents;
(d) any change in the corporate existence, structure or ownership of
the Borrower or any other Obligor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower, any other
Obligor or their respective assets or any resulting release or discharge of any
obligation of the Borrower or any other Obligor contained in the Loan
Documents;
(e) the existence of any claim, set-off or other rights which
Holdings may have at any time against the Borrower, any other Obligor, any
Agent, any Lender or any other Person, whether in connection herewith or any
unrelated transactions, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against the
Borrower or any other Obligor for any reason of the Loan Documents, or any
provision of applicable law or regulation purporting to prohibit the payment by
the Borrower or any other Obligor of the principal of or interest on any Note
or any other amount payable by the Borrower or any other Obligor under the Loan
Documents; or
(g) any other act or omission to act or delay of any kind by the
Borrower, any other Obligor, any Agent, any Lender or any other Person or any
other circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of Holdings' obligations
hereunder (other than, in each case, the payment of the Obligations in full).
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3.3. Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. Holdings' obligations hereunder shall remain in full force and
effect until the Commitments shall have terminated and the principal of and
interest on the Notes and all other amounts payable by the Obligors under the
Loan Documents shall have been paid in full. If at any time any payment of the
principal of or interest on any Note or any other amount payable by the
Obligors under the Loan Documents is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of any Obligor or
otherwise, Holdings's obligations hereunder with respect to such payment shall
be reinstated at such time as though such payment had been due but not made at
such time.
3.4. Waiver by Holdings. Holdings irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken by any Person
against the Borrower, Holdings, any other Obligor or any other Person.
3.5. Subrogation and Contribution. Holdings irrevocably waives,
until such time as the Commitments shall have terminated and all other amounts
payable by the Obligors under the Loan Documents shall have been paid in full,
any and all rights to which it may be entitled, by operation of law or
otherwise, upon making any payment hereunder (i) to be subrogated to the rights
of the payee against the Borrower with respect to such payment or against any
direct or indirect security therefor, or otherwise to be reimbursed,
indemnified or exonerated by or for the account of the Borrower in respect
thereof or (ii) to receive any payment, in the nature of contribution or for
any other reason, from any other Obligor with respect to such payment.
3.6. Stay of Acceleration. If acceleration of the time for payment
of any amount payable by any Obligor under the Loan Documents is stayed upon
insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable by Holdings hereunder forthwith on demand by the
Administrative Agent made at the request of the Majority Lenders.
ARTICLE IV
TAXES
4.1. Taxes. (a) Any and all payments by the Borrower to each Lender
or the Administrative Agent under this Agreement and any other Loan Document
shall be made free and clear of, and without deduction or withholding for, any
Taxes. In addition, the Borrower shall pay all Other Taxes to the relevant
taxing authority or other authority in accordance with applicable law.
(b) If the Borrower shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Administrative Agent, then:
(i) the sum payable shall be increased as necessary so that,
after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable
under this Section), such Lender or the Administrative Agent, as the
case may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made;
(ii) the Borrower shall make such deductions and
withholdings; and
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(iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law.
(c) The Borrower agrees to indemnify and hold harmless each Lender
and the Administrative Agent for the full amount of (i) Taxes and (ii) Other
Taxes that are payable by such Lender or the Administrative Agent and any
penalties, interest, additions to tax, expenses or other similar liabilities
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Payment under this indemnification
shall be made within 45 days after the date the Lender or the Administrative
Agent makes written demand therefor.
(d) Each Lender that is not incorporated or organized in or under the
laws of the United States of America or a state thereof (a "Non-U.S. Lender")
shall:
(i) deliver to the Borrower and the Administrative Agent,
prior to the first day on which the Borrower is required to make any
payments hereunder to such Lender, two copies of either United States
Internal Revenue Service Form 1001 or Form 4224 or, in the case of a
Non-U.S. Lender claiming exemption from U.S. Federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest", a Form W-8, or any subsequent versions thereof
or successors thereto (and, if such Non-U.S. Lender delivers a Form
W-8, a certificate representing that such Non-U.S. Lender is not a
bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of the Borrower and is not a controlled foreign corporation related to
the Borrower (within the meaning of Section 864(d)(4) of the Code)),
properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. Federal
withholding tax on payments by the Borrower under this Agreement;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form of certification on or before the date
that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent;
unless in any such case any change in treaty, law or regulation has occurred
prior to the date on which any such delivery would otherwise be required that
renders any such form inapplicable or would prevent such Lender from duly
completing and delivering any such form with respect to it and such Lender so
advises the Borrower and the Administrative Agent. Each Non-U.S. Lender that
shall become a Participant pursuant to Section 11.8 or a Lender pursuant to
Section 11.8 shall, upon the effectiveness of the related transfer, be required
to provide all the forms and statements required pursuant to this Section
4.1(d), provided that in the case of a Participant such Participant shall
furnish all such required forms and statements to the Lender from which the
related participation shall have been purchased.
(e) The Borrower shall not be required to indemnify any Non-U.S.
Lender or the Administrative Agent, or to pay any additional amounts to any
Non-U.S. Lender or the Administrative Agent, in respect of U.S. Federal
withholding tax pursuant to paragraph (a) above to the extent that (i)
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the obligation to withhold amounts with respect to U.S. Federal withholding tax
existed on the date such Non-U.S. Lender became a party to this Agreement (or,
in the case of a Non-U.S. Participant, on the date such Participant became a
Participant hereunder) or as of the date such Non-U.S. Lender changes its
applicable Lending Office; provided, however, that this clause (i) shall not
apply to the extent that (x) the indemnity payments or additional amounts any
Lender (or Participant) would be entitled to receive (without regard to this
clause (i)) do not exceed the indemnity payment or additional amounts that the
Person making the assignment, participation, transfer or change in Lending
Office would have been entitled to receive in the absence of such assignment,
participation, transfer or change in Lending Office, or (y) such assignment,
participation, transfer or change in Lending Office had been requested by the
Borrower, (ii) the obligation to pay such additional amounts would not have
arisen but for a failure by such Non-U.S. Lender or Non-U.S. Participant to
comply with the provisions of paragraph (d) above or (iii) any of the
representations or certifications made by a Non-U.S. Lender or Non-U.S.
Participant pursuant to paragraph (d) above are incorrect at the time a payment
hereunder is made, other than by reason of any change in treaty, law or
regulation having effect after the date such representations or certifications
were made.
(f) If the Borrower determines in good faith that a reasonable basis
exists for contesting any Taxes for which indemnification has been demanded
hereunder, the relevant Lender or the Administrative Agent, as applicable,
shall cooperate with the Borrower in challenging such Taxes at the Borrower's
expense if so requested by the Borrower in writing. If any Lender or the
Administrative Agent, as applicable, receives a refund of a Tax for which a
payment has been made by the Borrower pursuant to this Agreement, which refund
in the good faith judgment of such Lender or Administrative Agent, as the case
may be, is attributable to such payment made by the Borrower, then the Lender
or the Administrative Agent, as the case may be, shall reimburse the Borrower
for such amount as the Lender or Administrative Agent, as the case may be,
determines to be the proportion of the refund as will leave it, after such
reimbursement, in no better or worse position than it would have been in if the
payment had not been required. Neither the Lenders nor the Administrative
Agent shall be obliged to disclose information regarding its tax affairs or
computations to the Borrower in connection with this paragraph (f) or any other
provision of this Section 4.1.
(g) Promptly after the date of any payment by the Borrower of Taxes
or Other Taxes, the Borrower shall furnish to each Lender or the Administrative
Agent the original or a certified copy of a receipt evidencing payment thereof,
or other evidence of payment satisfactory to such Lender or the Administrative
Agent.
4.2. Increased Costs and Reduction of Return. If, after the Closing
Date, (i) the introduction of any Capital Adequacy Regulation, (ii) any change
in any Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority, or by NAIC or any other comparable agency charged with
the interpretation or administration thereof or (iv) compliance by any Lender
(or its Lending Office) or any corporation controlling any Lender with any
Capital Adequacy Regulation, affects or would affect the amount of capital
required to be maintained by such Lender or any corporation controlling such
Lender and (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy and such Lender's desired return on
capital) the amount of such capital is increased as a consequence of its
Commitment, loans, credits, participation interests or obligations under this
Agreement, then, upon demand of such Lender to the Borrower through the
Administrative Agent, accompanied by a written notice showing in reasonable
detail the basis for calculation of any such amounts, the Borrower shall pay to
such Lender, from time to time promptly after receipt of such
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demand and notice as specified by such Lender, additional amounts sufficient to
compensate such Lender for such increase.
4.3. Notice from Lenders. Any Lender claiming reimbursement or
compensation under this Article IV shall deliver to the Borrower (with a copy
to the Administrative Agent) a notice setting forth in reasonable detail the
amount payable to the Lender hereunder and the basis therefor and such notice
shall be conclusive and binding on the Borrower in the absence of clearly
demonstrable error.
4.4. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 4.1(b), 4.1(c)
or 4.2 with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another Lending Office for any Loans affected by such event or take
other action, provided that such Lender and its Lending Office suffer no
economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such Section.
Nothing in this Section 4.4 shall affect or postpone any of the Obligations of
the Borrower or the right of any Lender provided in Section 4.1(b), 4.1(c) or
4.2.
4.5. Notice of Certain Costs. Notwithstanding anything in this
Agreement to the contrary, to the extent any notice or demand required by
Section 4.1 or 4.2 is given by any Lender more than 180 days after such Lender
has knowledge of the occurrence of the event giving rise to the additional
cost, reduction in amounts, loss, tax or other additional amounts described in
such Section, such Lender shall not be entitled to compensation under such
Section 4.1 or 4.2, as the case may be, for any such amount incurred or
accruing prior to the giving of such notice or demand to the Borrower.
4.6. Replacement of Lenders. If the Borrower receives notice from
any Lender requesting increased costs or additional amounts under Section 4.1
or 4.2, then, in each case, the Borrower shall have the right, so long as no
Event of Default shall have occurred and be continuing and unless, such Lender
has removed or cured the conditions which resulted in the obligation to pay
such increased costs or additional amounts or agreed to waive and otherwise
forego any right it may have to any payments provided for under Section 4.1 or
4.2 in respect of such conditions, to replace in its entirety such Lender (the
"Replaced Lender"), upon prior written notice to the Administrative Agent and
such Replaced Lender, with one or more other Eligible Assignee(s)
(collectively, the "Replacement Lender") acceptable to the Administrative Agent
(which acceptance shall not be unreasonably withheld); provided, however, that,
at the time of any replacement pursuant to this Section 4.6, the Replaced
Lender and the Replacement Lender shall enter into (each Replaced Lender hereby
unconditionally agreeing to enter into) one or more Assignment and Acceptance
agreements (appropriately completed), pursuant to which (i) the Replacement
Lender shall acquire all of the Commitments and outstanding Loans of the
Replaced Lender and, in connection therewith, shall pay to the Replaced Lender
in respect thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued but unpaid interest on, all outstanding Loans of
the Replaced Lender and (B) an amount equal to all accrued but theretofore
unpaid fees owing to the Replaced Lender pursuant to Section 2.10; and (ii) the
Borrower shall pay to the Replaced Lender any other amounts payable to
the Replaced Lender under this Agreement (including amounts payable under
Sections 4.1 and 4.2 which have accrued to the date of such replacement). Upon
the execution of the Assignment and Acceptance agreement(s), the payment of the
amounts referred to in the preceding sentence and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the applicable Notes
executed by the Borrower, the Replacement Lender shall automatically become a
Lender hereunder and the Replaced Lender shall cease to constitute a Lender
hereunder, except with respect to indemnification provisions under this
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Agreement, which shall survive as to such Replaced Lender. It is understood
and agreed that if any Replaced Lender shall fail to enter into an Assignment
and Acceptance Agreement in accordance with the foregoing, it shall be deemed
to have entered into such an Assignment and Acceptance Agreement.
4.7. Survival. The agreements and obligations of the Borrower in
this Article IV shall survive the payment of all other Obligations.
ARTICLE V
CONDITIONS PRECEDENT
5.1. Conditions of Initial Loans. The obligation of each Lender to
make its initial Loan hereunder is subject to the fulfillment of the following
conditions precedent to the satisfaction of the Agents (all documents to be
provided in sufficient quantity so that each Lender may receive a copy):
(a) Liquidity Facility. The Administrative Agent shall have received
full counterparts of this Agreement, duly executed by each party hereto.
(b) Resolutions; Incumbency. The Administrative Agent shall have
received (i) copies of the resolutions of the board of directors of the
Borrower authorizing the execution, delivery and performance of this Agreement,
each other Loan Document to be delivered by the Borrower and the transactions
contemplated hereby and thereby, certified as of the Closing Date by the
Secretary or an Assistant Secretary of the Borrower, together with a
certificate of the Secretary or Assistant Secretary of the Borrower dated the
Closing Date, certifying the names and true signatures of the officers of the
Borrower authorized to execute, deliver and perform, as applicable, this
Agreement, and all other Loan Documents to be delivered by it hereunder; and
(ii) copies of the resolutions of the board of directors of each of the
Guarantors authorizing the delivery, execution and performance by such
Guarantor of each Loan Document to which such Guarantor is a signatory,
certified as of the Closing Date by the Secretary or an Assistant Secretary of
such Guarantor, together with a certificate of the Secretary or Assistant
Secretary of such Guarantor dated the Closing Date, certifying the names and
true signatures of the officers of such Guarantor authorized to execute,
deliver and perform each Loan Document to which such Guarantor is a signatory.
(c) Organization Documents. The Administrative Agent shall have
received the articles or certificate of incorporation and the bylaws of each of
Obligors for which such documents have not previously been delivered and
certified, in each case, as in effect on the Second Amendment Effective Date,
certified by the Secretary or Assistant Secretary of such Person as of the
Second Amendment Effective Date, together with a certification that any
documents which were previously delivered are in full force and effect and have
not, since the date of such delivery, been amended.
(d) Legal Opinions. The Administrative Agent shall have received a
favorable legal opinion of (i) Simpson Thacher & Bartlett, special counsel to
the Obligors and (ii) the General Counsel to the Borrower, in each case,
addressed to the Administrative Agent and the Lenders and dated the Closing
Date, substantially in the forms of Exhibit F-1 and F-2, respectively.
(e) Payment of Fees. The Administrative Agent shall have received
evidence of payment by the Borrower of all accrued and unpaid fees, costs and
expenses to the extent then due and payable
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under this Agreement or the Fee Letter on the Closing Date, together with all
reasonable and documented legal costs and expenses of the Agents and
Co-Arrangers to the extent invoiced prior to or on the Closing Date, including
any such costs, fees and expenses arising under or referenced in Sections 2.10
and 11.4.
(f) Guaranty. The Administrative Agent shall have received the
Guaranty, duly executed by each Guarantor.
(g) Pledge Agreement. The Administrative Agent shall have received
the Pledge Agreement substantially in the form of Exhibit D, duly executed by
Holdings, the Borrower and each Domestic Subsidiary which is a Material
Subsidiary, together with all certificates and instruments representing the
collateral pledged thereunder, together with undated stock transfer powers
executed in blank with respect thereto.
(h) Security Agreement. The Agents shall have received executed
counterparts of the Security Agreement, dated as of the date hereof, duly
executed by Holdings, the Borrower and each Domestic Subsidiary of the
Borrower, together with executed Uniform Commercial Code financing statements
(Form UCC-1) naming Holdings, the Borrower and each Domestic Subsidiary as the
debtor and the Administrative Agent as the secured party, or other similar
instruments or documents, to be filed under the Uniform Commercial Code of all
jurisdictions as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect the security interest of the Administrative Agent
pursuant to the Security Agreements.
(i) Approvals. All necessary material governmental, shareholders'
and third-party approvals in connection with the execution, delivery and
performance of this Agreement and the other Loan Documents and the other
transactions contemplated by this Agreement and the other Loan Documents shall
have been duly obtained and all applicable waiting periods shall have expired
without, in all such cases, any action being taken by any competent authority
that restrains, prevents or imposes materially adverse conditions or material
increased costs upon the consummation of this Agreement and the other Loan
Documents.
(j) Certificate. Each of the following statements shall be true and
correct on and as of the Closing Date (and the Administrative Agent shall have
received a certificate signed by a Responsible Officer, dated as of the Closing
Date, to such effect):
(i) after giving effect to the effectiveness of the amendment
to the Holdings Credit Agreement, the representations and warranties
contained in Article VI and in each of the other Loan Documents are
true and correct in all material respects on and as of such date, as
though made on and as of such date (except to the extent such
representations and warranties expressly refer to an earlier date, in
which case they shall be true and correct in all material respects as
of such earlier date);
(ii) no Default or Event of Default exists or would result
from the making of the initial Loans or from the grant or perfection
of the Lien of the Administrative Agent and the Lenders on the
collateral security provided under the Loan Documents; and
(iii) except as disclosed to the Holdings Credit Agreement
Lenders on March 23, 1998 or as set forth in the bank book delivered
to such Holdings Credit Agreement Lenders on such
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date, no material adverse change has occurred since September 30, 1997
with respect to the operations, business, properties, condition
(financial or otherwise) or, as of the Closing Date, prospects of the
Borrower or the Borrower and its Subsidiaries, taken as a whole.
Attached to such certificate shall be true and complete (as certified in such
certificate), fully executed copies of the Holdings Credit Agreement and each
other Loan Document (as such term is defined therein) delivered in connection
with the Holdings Credit Agreement, which certificate shall specify that none
of the foregoing documents have been amended or otherwise modified except as
set forth in such certificate.
(k) Amendment to Holdings Credit Agreement. The Agents shall have
received executed counterparts of the Amendment to Holdings Credit Agreement
and each other document deliverable by Holdings or another Obligor thereunder
which is a condition precedent to its effectiveness, duly executed by Holdings
and the applicable Obligors.
5.2. Conditions to All Loans. The obligation of each Lender to make
any Loan (including its initial Loan) is subject to the satisfaction of the
following conditions precedent on the relevant Borrowing Date:
(a) Notice of Borrowing. The Administrative Agent shall have
received (with, in the case of the initial Loan only, a copy for each Lender) a
Notice of Borrowing;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article VI hereof and in the Loan Documents
shall be true and correct in all material respects on and as of such Borrowing
Date with the same effect as if made on and as of such Borrowing Date (except
to the extent such representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct in all material respects as
of such earlier date); and
(c) No Existing Default. No Default or Event of Default shall exist
or shall result from the making of such Loans.
(d) At least $230,000,000 of the Revolving Commitment under the
Holdings Credit Agreement shall be drawn at such time.
Each Notice of Borrowing submitted by the Borrower hereunder shall
constitute a representation and warranty by the Borrower hereunder, as of the
date of each such notice and as of each Borrowing Date, that the conditions in
this Section 5.2 are satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and
each Lender that:
6.1. Corporate Existence and Power. The Borrower and each other
Obligor:
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(a) is a corporation or other business entity duly organized or
formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation;
(b) has the power and authority to own its assets, carry on its
business and to execute, deliver and perform its obligations under this
Agreement and the other Loan Documents to which it is a party; and
(c) is duly qualified as a foreign corporation or other business
entity and is licensed and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification or license,
except, in the case of clauses (a) and (b) above, with respect to Material
Subsidiaries, and, in the case of clause (c) above, with respect to the
Borrower and its Material Subsidiaries, to the extent that the failure of which
could not reasonably be expected to have a Material Adverse Effect.
6.2. Corporate Authorization; No Contravention; Binding Effect. The
execution, delivery and performance by the Borrower of this Agreement and each
other Loan Document to which the Borrower is a party, the execution, delivery
and performance by each other Obligor of each Loan Document to which it is a
party, the granting of the Liens contemplated by the Pledge Agreement and the
Security Agreement have, in each case, been duly authorized by all necessary
corporate or other action, and do not and will not:
(a) contravene the terms of any of the Borrower's or such other
Obligor's Organization Documents;
(b) conflict with or result in any default, breach or contravention
of, or the creation of any Lien under, any document evidencing any material
Contractual Obligation to which the Borrower, Holdings or any of its Material
Subsidiaries or any Obligor is a party or any material order, injunction, writ
or decree of any Governmental Authority to which the Borrower, Holdings or any
of its Material Subsidiaries, any Obligor or any of their respective material
properties is subject; or
(c) violate any material Requirement of Law applicable to the
Borrower, Holdings or any of its Material Subsidiaries or any Obligor or any of
their respective material properties.
This Agreement has been duly executed and delivered by the Borrower and this
Agreement and each other Loan Document to which the Borrower or any other
Obligor is a party constitutes the legal, valid and binding obligations of the
Borrower or such Obligor, as the case may be, enforceable against the Borrower
or such Obligor, as the case may be, in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally or by
general equitable principles relating to enforceability.
6.3. Governmental Authorization. No approval, consent, exemption,
authorization or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Borrower or
any other Obligor of this Agreement, any other Loan Document to which the
Borrower or any such Obligor is a party or the granting of the Liens
contemplated by the Pledge Agreement and the Security Agreement, except (a) for
any thereof which have been obtained and are in full force and effect and (b)
as such performance or enforcement may be subject to the exceptions set forth
in Schedule 6.3.
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6.4. Litigation. Except as set forth on Schedule 6.4, there
are no actions, suits or proceedings pending or, to the knowledge of the
Holdings, threatened, with respect to the Borrower or Holdings or any of its
Subsidiaries (i) that have, or could reasonably be expected to have, a Material
Adverse Effect or (ii) that have, or could reasonably be expected to have, a
material adverse effect on the rights and remedies of the Lenders taken as a
whole or on the ability of the Borrower and the other Obligors to perform their
material obligations under the Loan Documents taken as a whole.
6.5. ERISA Compliance. Except as specifically disclosed in Schedule
6.5:
(a) Each Plan is in compliance in all material respects with the terms
thereof and the applicable provisions of ERISA, the Code and other federal or
state law except to the extent that failure to comply would not result,
individually or in the aggregate, in an amount of liability that could
reasonably be expected to have a Material Adverse Effect. Holdings and each
ERISA Affiliate has made all required contributions to any Plan subject to
Section 412 of the Code, except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Holdings,
threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Pension Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability in an amount
which could reasonably be expected to have a Material Adverse Effect if such
Pension Plan were then terminated; and (iii) neither Holdings nor any ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA that could reasonably be expected to have a Material Adverse
Effect.
6.6. Regulatory Matters. Neither the making of any Loan hereunder,
nor the use of any proceeds thereof, will violate the provisions of Regulation
G, T, U or X of the FRB. The Borrower is not an "Investment Company" within
the meaning of the Investment Company Act of 1940.
6.7. Title to Properties. The Borrower, and Holdings and each of its
Subsidiaries has good title to, or leasehold interests in, all property
necessary for the conduct of their respective businesses free and clear of all
Liens (other than any Liens permitted by this Agreement), except where the
failure to have such good title or leasehold interests could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
6.8. Taxes. The Borrower, Holdings and its Subsidiaries and all
other corporations with whom the Borrower, Holdings or any Subsidiary joins in
the filing of a consolidated return have filed all Federal income tax returns
and other material tax returns and reports, domestic and foreign, required to
be filed, and have paid all material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those not yet delinquent or which are
being contested in good faith. The Borrower, Holdings and each of its
Subsidiaries and each such other corporation with whom the Borrower, Holdings
or any Subsidiary joins in the filing of a consolidated return have paid, or
have provided adequate reserves (in the good faith judgment of the management
of Holdings) in accordance with GAAP for the payment of all such material
taxes, assessments, fees and charges relating to all prior taxable years and
the current
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taxable year of the Borrower, Holdings and each of its Subsidiaries and each
such other corporation with whom the Borrower, Holdings or any Subsidiary joins
in the filing of a consolidated return. To the best knowledge of Holdings,
there is no proposed tax assessment against the Borrower, Holdings or any
Subsidiary or any such other corporation with whom the Borrower, Holdings or
any Subsidiary joins in the filing of a consolidated return that could
reasonably be expected to have a Material Adverse Effect.
6.9. Financial Condition. (a) The audited consolidated balance
sheet of the Holdings and its Subsidiaries as of September 30, 1997, and the
related consolidated statements of earnings and cash flows for the Fiscal Year
ended on such date: (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (ii) fairly present in all material respects the financial
condition of the Holdings and its Subsidiaries as of the date thereof and
results of operations for the period covered thereby.
(b) The unaudited consolidated balance sheet of Holdings and its
Subsidiaries as of December 31, 1997, and the related consolidated statements
of earnings and cash flows for the Fiscal Year ended on such date: (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; and (ii) fairly
present in all material respects the financial condition of Holdings and its
Subsidiaries as of the date thereof and results of operations for the period
covered thereby (subject to normal year-end adjustments).
(c) Except as disclosed to the Holdings Credit Agreement Lenders on
March 23, 1998 or as disclosed in the Bank Book, since September 30, 1998,
there has been no Material Adverse Change.
6.10. Trademarks, Copyrights, Patents and Licenses, etc. Each of the
Borrower, Holdings and its Subsidiaries owns or are licensed or otherwise have
the right to use all of the Trademarks, copyrights, patents, licenses and other
rights that are reasonably necessary for the operation of each of their
respective businesses, without conflict with the rights of any other Person and
free of burdensome restrictions, except where the failure to have any such
rights could not reasonably be expected to have a Material Adverse Effect.
6.11. Subsidiaries. As of the Closing Date, the Borrower has no
Subsidiaries other than those specifically disclosed in Schedule 6.11 hereto.
6.12. Full Disclosure. (a) All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of Holdings,
the Borrower or any of their respective Subsidiaries in writing to any Agent
and/or any Lender on or before the Closing Date (including all information
contained in the Loan Documents) for purposes of or in connection with this
Agreement or any transactions contemplated herein is true and complete in all
material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary
to make such information (taken as a whole) not misleading at such time in
light of the circumstances under which such information was provided, it being
understood and agreed that for purposes of this Section 6.12(a), such factual
information shall not include projections and pro forma financial information.
(b) The projections and pro forma financial information contained in
the Bank Book were or are based on good faith estimates and assumptions
believed to be reasonable at the time made, it being recognized by the Lenders
that such projections as to future events are not to be viewed as facts and
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that actual results during the period or periods covered by any such
projections may differ significantly from the projected results.
6.13. Compliance with Environmental Laws. The Borrower, Holdings and
each of its Subsidiaries is in compliance with all applicable Environmental
Laws in respect of the conduct of its business and the ownership of its
property, except such noncompliance as could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect. Without limiting the effect of
the preceding sentence:
(a) none of the Borrower, Holdings or any of their respective
Subsidiaries has received a complaint, order, citation, notice or other written
communication with respect to the existence or alleged existence of a violation
of, or liability arising under, any Environmental Law, the outcome of which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; and
(b) to the best of Holdings' knowledge, after due inquiry, there are
no environmental, health or safety conditions existing or reasonably expected
to exist at any real property owned, operated, leased or used by the Borrower,
Holdings or any of their respective existing or former Subsidiaries or any of
their respective predecessors, including off-site treatment or disposal
facilities used by the Borrower, Holdings or their respective existing or
former Subsidiaries for wastes treatment or disposal, which could reasonably be
expected to require any construction or other capital costs or clean-up
obligations to be incurred prior to the Commitment Termination Date in order to
assure compliance with any Environmental Law, including provisions regarding
clean-up, to the extent that any of such conditions, construction or other
capital costs or clean-up obligations, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, unless the Majority
Lenders waive compliance in writing:
7.1. Affirmative Covenants. Each of the Borrower and Holdings agrees
with each Agent and each Lender that, the Borrower and Holdings will, and will
cause each other Obligor to, perform, comply with and be bound by all of the
agreements, covenants and obligations contained in Article VII of the Holdings
Credit Agreement, each such agreement, covenant and obligation contained in
such Article VII, together with all related definitions, exhibits and ancillary
provisions, being hereby incorporated into this Agreement by reference as
though specifically set forth in this Section and all of such agreements,
covenants and obligations, for purposes of this Agreement, shall survive the
termination and/or expiration of the Holdings Credit Agreement, and, for
purposes of this Agreement, no amendment, waiver, supplement or other
modification of any of the terms or provisions of the Holdings Credit Agreement
shall have any force or effect unless separately consented to in writing by the
Majority Lenders in a writing making specific reference to this Agreement;
provided that all references in such Article VII of the Holdings Credit
Agreement to the term (i) "Borrower" shall for purposes of this Agreement be
deemed to be a reference to "Holdings" and the "Borrower" under this Agreement,
(ii) "Obligor" shall for the purposes of this Agreement be deemed to be a
reference to an
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"Obligor" under this Agreement (iii) "Administrative Agent" shall for the
purposes of this Agreement be deemed to be a reference to the "Administrative
Agent, under this Agreement, and (iv) all references in such Article VII of the
Holdings Credit Agreement to the term "Lender" or "Lenders" shall for all
purposes of this Agreement be deemed to be references to the term "Lender" or
"Lenders" as defined in this Agreement.
7.2. Amendments, etc. to Holdings Credit Agreement. Each of the
Borrower and Holdings hereby agrees to deliver, promptly upon the effectiveness
thereof, true and complete copies of any amendment, supplement, extension or
other modification of, or any replacement, refinancing, or restructuring of,
the Holdings Credit Agreement, to each Agent and each Lender, and hereby agrees
that if, in their sole discretion, the Agents and the Majority Lenders choose
to incorporate herein any such amendment, supplement, extension or
modification, the Borrower shall enter into a written amendment or modification
to this Agreement to incorporate any such amendment, supplement, or other
modification or other provision.
7.3. Use of Proceeds. The Borrower shall use the proceeds of the
Loans for working capital and general corporate purposes of the Borrower and
its Subsidiaries.
7.4. Mortgages. Within 45 days after the Closing Date, the Borrower
shall deliver to the Agents counterparts of each Mortgage relating to each
Designated Property (or, with respect to the selection by the Agents of any
Designated Property not previously selected (and only with respect to such
Designated Property) in accordance with the terms hereof, 45 days after the
selection of such Designated Property not previously selected), the Borrower
shall cause to be delivered a duly executed Mortgage (together with
documentation, approvals and opinions requested by and reasonably satisfactory
to the Agents), accompanied by legal opinions of outside counsel to the
Borrower in respect of such collateral, reasonably satisfactory to the Agents,
all at the Borrower's expense.
7.5. Pledged Stock of Foreign Subsidiaries. Within 60 days after
the Closing Date, the Borrower shall promptly deliver, or cause to be
delivered, appropriate supplemental security documentation (consistent with the
corresponding terms of the Pledge Agreement) under the law of the jurisdiction
of incorporation of each Foreign Subsidiary which is a direct Subsidiary of the
Borrower or a Domestic Subsidiary to the Administrative Agent, duly executed
and delivered by an Authorized Officer of the pledgor thereof, all in form and
substance satisfactory to the Administrative Agent, and
(a) if not theretofore delivered, shall promptly deliver, or cause to
be delivered, to the Administrative Agent certificates (if any) representing at
least 65% of all of the issued and outstanding shares of capital stock of such
Foreign Subsidiary that is a Material Subsidiary owned by the Borrower or any
Subsidiary of the Borrower, as the case may be, along with undated stock powers
for such certificates, executed in blank, or, if any securities subject thereto
are uncertificated securities or are held through a financial intermediary,
confirmation and evidence satisfactory to the Administrative Agent that
appropriate book entries have been made in the relevant books or records of a
financial intermediary or the issuer of such securities, as the case may be, or
(b) other appropriate steps shall have been taken under the
applicable law of such Foreign Subsidiary's jurisdiction of incorporation,
formation or otherwise to effectuate the foregoing to the reasonable
satisfaction of the Administrative Agent.
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ARTICLE VIII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, unless the Majority
Lenders waive compliance in writing, each of the Borrower and Holdings agrees
with each Agent and each Lender that the Borrower and Holdings will, and will
cause each other Obligor to, perform, comply with and be bound by all of the
agreements, covenants and obligations contained in Article VIII of the Holdings
Credit Agreement, each such agreement, covenant and obligation contained in
such Article VIII, together with all related definitions, exhibits and
ancillary provisions, as modified by the Form of Holdings Credit Agreement
Amendment and, if such agreement is not effected within 10 days of the
effectiveness of this Agreement, the applicable provisions of the Holdings
Credit Agreement then effective being hereby incorporated into this Agreement
by reference as though specifically set forth in this Article and all of such
agreements, covenants and obligations, for purposes of this Agreement, shall
survive the termination and/or expiration of the Holdings Credit Agreement,
and, for purposes of this Agreement, no amendment, waiver, supplement or other
modification of any of the terms or provisions of the Holdings Credit Agreement
shall have any force or effect unless separately consented to in writing by the
Majority Lenders in a writing making specific reference to this Agreement;
provided that all references in such Article VIII of the Holdings Credit
Agreement to the term (i) "Borrower" shall for purposes of this Agreement be
deemed to be a reference to "Holdings" and the "Borrower" under this Agreement,
(ii) "Obligor" shall for the purposes of this Agreement be deemed to be a
reference to an "Obligor" under this Agreement, (iii) "Administrative Agent"
shall for the purposes of this Agreement be deemed to be a reference to the
"Administrative Agent under this Agreement, (iv) all references in such Article
VIII of the Holdings Credit Agreement to the term "Lender" or "Lenders" shall
for all purposes of this Agreement be deemed to be references to the term
"Lender" or "Lenders" as defined in this Agreement, (v) all references in such
Article VIII of the Holdings Credit Agreement to the term "Agreement" shall for
all purposes of this Agreement be deemed to be references to the term
"Agreement" as defined in this Agreement, (vi) all references in such Article
VIII of the Holdings Credit Agreement to the term "Loan Document" shall for all
purposes of this Agreement be deemed to be references to the term "Loan
Document" as defined in this Agreement and, with respect to such reference in
Section 8.1(a) of the Holdings Credit Agreement, as incorporated by reference
herein pursuant to this Article VIII, shall also mean the junior (and, in the
case of the pledge of stock of the Borrower, pari passu) Liens created by the
Loan Documents (as defined in the Holdings Credit Agreement) and (vii) the
reference in Section 8.4(a) of the Holdings Credit Agreement to the term
"Agreement" shall for all purposes of this Agreement be deemed to also include
the Indebtedness incurred pursuant to the Holdings Credit Agreement.
ARTICLE IX
EVENTS OF DEFAULT
9.1. Event of Default. Any of the following shall constitute an
"Event of Default":
(a) Non-Payment. The Borrower fails to make (i) when and as required
to be made herein, payments of any amount of principal of any Loan or (ii)
within five days after the same becomes due,
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payment of any interest, fee or any other amount payable hereunder or under any
other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by
the Borrower or any Subsidiary made or deemed made herein or in any other Loan
Document or which is contained in any certificate, document or financial or
other statement by the Borrower, any Subsidiary or any Responsible Officer,
furnished at any time under this Agreement or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or
(c) Specific Defaults. The Borrower fails to perform or observe any
term, covenant or agreement contained in any of clause (a)(i) of Section 7.3 of
the Holdings Credit Agreement, as incorporated herein pursuant to Article VII
hereof, or Sections 8.1, 8.2 through 8.8 of the Holdings Credit Agreement, as
incorporated herein pursuant to Article VIII hereof, or Section 8 of the Pledge
Agreement or Section 4 of the Security Agreement; or
(d) Other Defaults. The Borrower or any other Obligor fails to
perform or observe any other term or covenant contained in this Agreement or
any other Loan Document to which it is a party, and such default shall continue
unremedied for a period of 30 days after the date upon which (i) a Responsible
Officer of the Borrower has actual knowledge thereof or (ii) written notice
thereof is received by the Borrower or such Obligor, as applicable, from the
Administrative Agent or the Majority Lenders; or
(e) Cross-Default. The Borrower or any of its Subsidiaries (i) (A)
fails to make any payment in respect of any Indebtedness (other than the
Obligations or Indebtedness described in clause (c) of Section 8.4 of the
Holdings Credit Agreement, as incorporated herein pursuant to Article VIII
hereof) when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document
on the date of such failure or (B) fails to perform or observe any other
condition or covenant, or (except in the case of Indebtedness consisting of any
Swap Contract) any other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness, and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure if the effect of such failure,
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause, such Indebtedness to be declared to be due and payable prior to its
stated maturity, or, in the case of Indebtedness consisting of Contingent
Obligations, to become due and payable and (ii) the aggregate amount of such
Indebtedness, together with the aggregate amount of all other Indebtedness in
default for failure to make payment or the maturity of which has been declared,
or could be so declared, to be so due and payable, equals or exceeds
$20,000,000; or
(f) Insolvency; Voluntary Proceedings. The Borrower or any Material
Subsidiary (i) makes a general assignment for the benefit of creditors or
generally fails to pay, or admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) is adjudicated insolvent or bankrupt, or any order
of relief or other order approving any such case or proceeding is entered;
(iii) commences any Insolvency Proceeding with respect to itself; or (iv) takes
any action to effectuate or authorize any of the foregoing; or
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(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Borrower or any Material
Subsidiary, or any writ, judgment, warrant of attachment, execution or similar
process is issued or levied against a substantial part of the Borrower's or any
Material Subsidiary's properties, and any such proceeding or petition shall not
be dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; (ii) the Borrower or any Material
Subsidiary admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under non-U.S.
law) is ordered in any Insolvency Proceeding; or (iii) the Borrower or any
Material Subsidiary acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar Person for itself
or a substantial portion of its property or business; or
(h) ERISA. An ERISA Event shall occur with respect to a Pension Plan
or Multiemployer Plan; or
(i) Judgments. One or more judgments, orders, decrees or arbitration
awards is entered against the Borrower or any of its Restricted Subsidiaries
involving in the aggregate a liability (to the extent not paid or covered by
insurance provided by a carrier that has not disputed coverage in writing) of
$20,000,000 or more, and the same shall remain unsatisfied, unvacated and
unstayed pending appeal for a period of 60 days after the entry thereof; or
(j) Change of Control. There occurs any Change of Control; or
(k) Collateral. Any provision of the Pledge Agreement, the Security
Agreement or any Mortgage shall for any reason (other than as a result of acts
or omissions of the Administrative Agent or any Lender) cease to create a valid
security interest in the collateral purported to be covered thereby (other than
as to any such collateral which is immaterial) or any material provision of the
Pledge Agreement, the Security Agreement, any Mortgage or the Guaranty shall
cease to be valid and binding on or enforceable against the Borrower or any
other Obligor party thereto, or the Borrower or any other Obligor shall deny or
disaffirm in writing its obligations under the Pledge Agreement, the Security
Agreement, any Mortgage or the Guaranty.
9.2. Remedies. If any Event of Default occurs, the Administrative
Agent shall, at the request of, or may, with the consent of, the Majority
Lenders:
(a) declare the commitment of each Lender to make Loans to be
terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
all without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Borrower; and/or
(c) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law; provided, however, that upon the occurrence of any event specified in
clause (f) or (g) of Section 9.1 with respect to the Borrower (in the case of
clause (g)(i), upon the expiration of the 60-day period mentioned therein), the
obligation of each Lender to make Loans shall automatically terminate and the
unpaid principal amount of all outstanding Loans and
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all interest and other amounts as aforesaid without further act of the
Administrative Agent or any Lender.
9.3. Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE X
THE AGENTS
10.1. Appointment and Authorization; "Administrative Agent". Each
Lender hereby irrevocably (subject to Section 10.9) appoints, designates and
authorizes the Administrative Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall the Administrative Agent or any
other Agent have or be deemed to have any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent or any other
Agent. Without limiting the generality of the foregoing sentence, the use of
the term "agent" in this Agreement with reference to the Administrative Agent
or any other Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
10.2. Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
10.3. Limitation on Liability of Agents and Agent-Related Persons.
None of the Agents or Agent-Related Persons shall (a) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct) or (b) be
responsible in any manner to any of the Lenders for any recital, statement,
representation or warranty made by the Borrower, Holdings or any Subsidiary or
Affiliate of the Borrower or Holdings, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent or any other Agent under or in connection with, this
Agreement or any other Loan Document, or for the value of or title to any
collateral security, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of the Borrower or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent or Agent-Related
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Person shall be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower or Holdings or any of the
Borrower's or Holdings' respective Subsidiaries or Affiliates.
10.4. Reliance by Administrative Agent. (a) The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Borrower), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Majority Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Majority Lenders and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 5.1, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Administrative Agent to such Lender
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender.
10.5. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Lenders, unless the Administrative Agent shall have received written notice
from a Lender or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default." The Administrative Agent will notify the Lenders of its receipt of
any such notice. The Administrative Agent shall, subject to the provisions of
this Article X, take such action with respect to such Default or Event of
Default as may be requested by the Majority Lenders in accordance with Article
IX (other than any such action which may conflict with applicable law);
provided, however, that unless and until the Administrative Agent has received
any such request, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Lenders (except to the extent that this Agreement expressly requires
that such action be taken, or not be taken, only with the consent or upon the
authorization of Majority Lenders).
10.6. Credit Decision. Each Lender acknowledges that none of the
Agents or Agent-Related Persons has made any representation or warranty to it,
and that no act by the Agents hereinafter taken, including any review of the
affairs of the Borrower, Holdings and their respective Subsidiaries, shall be
deemed to constitute any representation or warranty by any Agent or
Agent-Related Person to any Lender. Each Lender represents to each Agent that
it has, independently and without reliance upon any Agent or Agent-Related
Person and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations,
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property, financial and other condition and creditworthiness of the Borrower,
Holdings and their respective Subsidiaries, the value of and title to any
collateral security, and all applicable Lender regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon any Agent or
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly herein required to be furnished
to the Lenders by the Agents, the Agents shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower which may come into the
possession of any of the Agents or Agent-Related Persons.
10.7. Indemnification of Agents and Agent-Related Persons. Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agents and Agent-Related Persons (to the extent not
reimbursed by or on behalf of the Borrower and without limiting the obligation
of the Borrower to do so), in accordance with its Loan Percentage or, if
indemnification is sought after Commitments are terminated or expire, the Loan
Percentages in effect immediately prior to such termination or expiration, or,
if indemnification or reimbursement is sought after Loans are paid in full, the
Loan Percentages in effect immediately prior thereto from and against any and
all Indemnified Liabilities; provided, however, that no Lender shall be liable
for the payment to the Agents or Agent-Related Persons of any portion of such
Indemnified Liabilities resulting solely from such Person's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender shall
reimburse the Agents upon demand for its ratable share, in accordance with its
Loan Percentage or, if reimbursement is sought after the commitments have
terminated or expired, the Loan Percentages in effect immediately prior to such
termination or expiration or, if indemnification or reimbursement is sought
after Loans are paid in full, the Loan Percentages in effect immediately prior
thereto of any costs or out-of-pocket expenses (including legal costs and
expenses) incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document or any document contemplated by or referred to herein,
to the extent that the Administrative Agent is not reimbursed for such expenses
by or on behalf of the Borrower. The undertaking in this Section shall survive
the payment of all Obligations hereunder and the resignation or replacement of
the Administrative Agent.
10.8. Agents in Individual Capacity. Each Agent-Related Person may
make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with the Borrower,
Holdings and their respective Subsidiaries and Affiliates as though the
applicable Agent-Related Person were not the Administrative Agent,
Documentation Agent or Syndication Agent hereunder or in connection herewith
and without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Agent-Related Persons may receive information
regarding the Borrower or its Affiliates (including information that may be
subject to confidentiality obligations in favor of the Borrower, Holdings or
such Subsidiary) and acknowledge that each such Agent-Related Person shall be
under no obligation to provide such information to them. With respect
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to its Loans, the applicable Agent-Related Person shall have the same rights
and powers under this Agreement as any other Lender and may exercise the same as
though it were not the Administrative Agent, Documentation Agent or Syndication
Agent, as the case may be, and the terms "Lender" and "Lenders" include the
applicable Agent-Related Person in its individual capacity.
10.9. Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent resigns under this Agreement, the Majority Lenders shall
appoint from among the Lenders a successor agent for the Lenders which
successor agent shall be approved by the Borrower, which approval shall not be
unreasonably withheld. If no successor agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Agents, the Lenders
and the Borrower, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the retiring
Administrative Agent and the term "Administrative Agent" shall mean such
successor agent and the retiring Administrative Agent's appointment, powers and
duties as Administrative Agent shall be terminated. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article X and Sections 11.4 and 11.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor agent has accepted
appointment as Administrative Agent by the date which is 30 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Majority Lenders appoint a
successor agent as provided for above.
10.10. Withholding Tax. (a) If any Lender claims exemption from, or
reduction of, withholding tax under a United States tax treaty by providing IRS
Form 1001 pursuant to clause (d)(i) of Section 4.1 and such Lender sells,
assigns, grants a participation in or otherwise transfers all or part of the
Obligations of the Borrower to such Lender, such Lender agrees to notify the
Administrative Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Borrower to such Lender. To the extent
of such percentage amount, the Administrative Agent will treat such Lender's
IRS Form 1001 as no longer valid.
(b) If any Lender claiming exemption from United States withholding
tax by providing IRS Form 4224 to the Administrative Agent sells, assigns,
grants a participation in or otherwise transfers all or part of the Obligations
of the Borrower to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(c) If any Lender is entitled to a reduction in the applicable
withholding tax, the Administrative Agent may withhold from any interest
payment to such Lender an amount equivalent to the applicable withholding tax
after taking into account such reduction. However, if the forms or other
documentation required by clause (d)(i) of Section 4.1 are not delivered to the
Administrative Agent, then the Administrative Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax imposed by Sections 1441
and 1442 of the Code, without reduction.
(d) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Administrative Agent did
not properly withhold tax from amounts paid to or for
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the account of any Lender (because the appropriate form was not delivered or
was not properly executed, or because such Lender failed to notify the
Administrative Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Lender shall indemnify the Administrative Agent fully for all amounts
paid, directly or indirectly, by the Administrative Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Administrative Agent under this
Section, together with all costs and expenses (including legal costs and
expenses). The obligation of the Lenders under this clause shall survive the
payment of all Obligations and the resignation or replacement of the
Administrative Agent.
10.11. Collateral Matters. (a) The Administrative Agent is
authorized on behalf of all the Lenders, without the necessity of any notice to
or further consent from the Lenders, from time to time to take any action with
respect to any collateral security, the Pledge Agreement, the Security
Agreement or the Mortgages which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the collateral security
granted pursuant to the Loan Documents.
(b) The Lenders irrevocably authorize the Administrative Agent, at
its option and in its discretion, to release (i) any security interest or Lien
granted to or held by the Administrative Agent upon any collateral security (A)
upon termination of the Commitments and payment in full in cash of all
principal of and interest on the Loans, all fees payable pursuant to Sections
2.10 and 11.4, and all other fees, costs and expenses that are payable under
this Agreement or under any other Loan Document and have been invoiced (in
which case the Lenders hereby authorize the Administrative Agent to execute,
and the Administrative Agent agrees to execute, reasonable releases in
connection with this Agreement (other than, in any event, as to items stated to
survive the termination of this Agreement)); (B) constituting property sold or
to be sold or disposed of as part of or in connection with any disposition
permitted hereunder; (C) constituting property in which the Borrower, Holdings
or any of their respective Subsidiaries owned no interest at the time the
security interest and/or Lien was granted or at any time thereafter; (D)
consisting of an instrument evidencing Indebtedness or other debt instrument,
if the Indebtedness evidenced thereby has been paid in full; or (E) if
approved, authorized or ratified in writing by the Majority Lenders or each
Lender, as applicable, and (ii) any Guarantor from its obligations under the
Guaranty in the event such Guarantor is not required to be a Guarantor pursuant
to the terms of this Agreement. Upon request by the Administrative Agent at
any time, the Lenders will confirm in writing the Administrative Agent's
authority to release particular types or items of collateral security pursuant
to this Section.
10.12. Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each notice of request required to be given to the
Administrative Agent by the Borrower pursuant to the terms of this Agreement
(unless concurrently delivered to the Lenders by the Borrower). The
Administrative Agent will distribute to each Lenders each document or
instrument received and copies of all other communications received by the
Administrative Agent in each case from the Borrower for distribution to the
Lenders by the Administrative Agent in accordance with the terms of this
Agreement.
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ARTICLE XI
MISCELLANEOUS
11.1. Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by the Borrower therefrom, shall be effective unless
the same shall be in writing and signed by the Borrower and Majority Lenders
and notified to the Administrative Agent (or signed by the Borrower and the
Administrative Agent at the written request of Majority Lenders) and then any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that, in addition:
(a) no such waiver, amendment or consent shall (i) forgive any
principal of any Loan or extend the final scheduled maturity date of any Loan
(it being understood that any waiver or amendment of any installment or
prepayment or the method of application of any prepayment to the amortization
of the Obligations shall not constitute such an extension), or forgive any
interest or reduce the stated rate or extend the scheduled time of payment of
any interest or fee payable hereunder (other than as a result of waiving the
applicability of any post-default increase in interest rates) or extend the
final expiration date of any Lender's Commitments or increase the aggregate
amount of the Commitments of any Lender, in each case without the consent of
the Lender holding such Loan, to whom such interest or fee is payable or having
such Commitments, or (ii) amend, modify or waive any provision of this Section
11.1 or reduce the percentages specified in the definitions of the terms
"Majority Lenders" or consent to the assignment or transfer by the Borrower of
its rights and obligations under any Loan Document to which it is a party, in
each case without the consent of each Lender directly and adversely affected
thereby, or (iii) release all or substantially all the collateral security
provided under the Loan Documents without the consent of all Lenders;
(b) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent (in addition to the Lenders required under
this Section to sign such amendment, waiver or consent), adversely affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and
(c) the Fee Letter may not be amended, nor may the rights or
privileges thereunder be waived, except in a writing executed by the parties
thereto.
11.2. Notices. (a) Except to the extent otherwise expressly
provided herein, all notices, requests, consents, approvals, waivers and other
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted to or by the Borrower by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on
Schedule 11.2 and (ii) shall be followed promptly by delivery of a hard copy
original thereof) and mailed, faxed or delivered to the address or facsimile
number specified for notices on Schedule 11.2; or, as directed to the Borrower
or the Administrative Agent, to such other address as shall be designated by
such party in a written notice to the other parties, and as directed to any
other party, at such other address as shall be designated by such party in a
written notice to the Borrower and the Administrative Agent.
(b) All such notices, requests and communications shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in
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the case of telecopy notice, when received, except that notices pursuant to
Articles II or Article X to the Administrative Agent shall not be effective
until actually received by the Administrative Agent.
(c) Any agreement of the Administrative Agent and the Lenders herein
to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrower. The Administrative Agent and
the Lenders shall be entitled to rely on the authority of any Person purporting
to be a Person authorized by the Borrower to give such notice and the
Administrative Agent and the Lenders shall not have any liability to the
Borrower or any other Person on account of any action taken or not taken by the
Administrative Agent or the Lenders in reliance upon such telephonic or
facsimile notice. The obligation of the Borrower to repay the Loans shall not
be affected in any way or to any extent by any failure by the Administrative
Agent and the Lenders to receive written confirmation of any telephonic or
facsimile notice or the receipt by the Administrative Agent and the Lenders of
a confirmation which is at variance with the terms understood by the
Administrative Agent and the Lenders to be contained in the telephonic or
facsimile notice.
11.3. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. All remedies provided
in this Agreement are cumulative, and not exclusive of other remedies, at law
or otherwise.
11.4. Costs and Expenses. The Borrower shall:
(a) pay or reimburse each Agent, as the case may be (subject to
clause (e) of Section 5.1) promptly for all reasonable and documented costs and
expenses incurred by such Person in connection with the development,
preparation, delivery, execution and closing of, and all reasonable and
documented costs and expenses incurred by such Person in connection with the
administration and any amendment, supplement, waiver or modification to (in
each case, whether or not consummated), this Agreement, any Loan Document and
any other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including the
reasonable and documented fees, costs and expenses of outside counsel incurred
by such Person with respect thereto; and
(b) pay or reimburse each Agent and each Lender promptly for all
reasonable and documented costs and expenses, including reasonable and
documented legal fees, costs and expenses, incurred by them in connection with
the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or any other Loan Document during the existence
of an Event of Default or after acceleration of the Loans (including in
connection with any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate proceeding).
11.5. Borrower Indemnification. (a) Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify, defend and
hold each Agent, each Agent-Related Person, each Lender and each of their
respective officers, directors, trustees, employees and agents (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including reasonable and documented legal
fees, costs and expenses) of any kind or nature whatsoever which may at any
time (including at any time following repayment of the Loans and the
termination, resignation or
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replacement of the Administrative Agent or replacement of any Lender) be
imposed on, incurred by or asserted against any such Person in any way relating
to or arising out of this Agreement or any document contemplated by or referred
to herein, or the transactions contemplated hereby, or any action taken or
omitted by any such Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate proceeding) related to or
arising out of this Agreement or the Loans or the use of the proceeds thereof,
whether or not the Borrower or any Affiliate of the Borrower or any Indemnified
Person is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided that the Borrower shall have no obligation hereunder to
any Indemnified Person with respect to Indemnified Liabilities resulting from
the gross negligence or willful misconduct of such Indemnified Person or
disputes among the Administrative Agent, the Lenders and/or their transferees.
The agreements in this Section shall survive payment of all other Obligations.
(b) Survival. The obligations in this Section shall survive payment
of all other Obligations.
11.6. Marshalling; Payments Set Aside. Neither the Administrative
Agent nor the Lenders shall be under any obligation to marshal any assets in
favor of the Borrower or any other Person or against or in payment of any or
all of the Obligations. To the extent that the Borrower makes a payment to the
Administrative Agent or the Lenders, or the Administrative Agent or the Lenders
exercise their right of set-off, and such payment or the proceeds of such
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its Pro Rata
Share of any amount so recovered from or repaid by the Administrative Agent.
11.7. Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
11.8. Assignments, Participations, etc. (a) Any Lender may, with
the prior written consent of the Borrower and the Administrative Agent, which
consents shall not be unreasonably withheld, at any time assign and delegate to
one or more Eligible Assignees (provided that no consent of the Borrower shall
be required in connection with any assignment and delegation by a Lender to an
Eligible Assignee that is an Affiliate of such Lender) all or any part of the
Loans and the Commitments and the other rights and obligations of such Lender
hereunder, in a minimum amount of the lesser of $1,000,000 (or such lesser
amount as may be agreed to by the Borrower and the Administrative Agent in
their sole and absolute discretion) and the full remaining amount of such
Lender's Loans or Commitments (except that no such minimum shall be applicable
on an assignment to a Lender or an Affiliate of a Lender); provided, however,
that the Borrower and the Administrative Agent may continue to deal solely and
directly with such Lender in connection with the interest so assigned to an
Eligible Assignee until (i) written notice of such assignment, together with
payment instructions, addresses and related information with respect to the
Eligible Assignee, shall have been given to the Borrower and the Administrative
Agent by such Lender and the Eligible Assignee; (ii) such Lender and its
Eligible
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Assignee shall have delivered to the Borrower and the Administrative Agent an
Assignment and Acceptance substantially in the form of Exhibit H ("Assignment
and Acceptance") together with any Note or Notes subject to such assignment and
(iii) the assignor Lender or Eligible Assignee has paid to the Administrative
Agent a registration and processing fee in the amount of $3,000.
(b) Upon the request of the Eligible Assignee, solely to facilitate
the pledge or assignment of its Loans to any Federal Reserve Bank, the Borrower
shall issue Notes to the Eligible Assignee. Upon the request of the assignor
Lender, if applicable, solely to facilitate the pledge or assignment of its
Loans to any Federal Reserve Bank, the Borrower shall issue a reduced Note to
such assignor in exchange and replacement for its then existing Note.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent specified on Schedule 11.2
(or at such other address as may be designated by the Administrative Agent from
time to time in accordance with Section 11.2) a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Lenders and the Commitment of and principal
amount of the Loans owing to each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders shall treat each Person
whose name is recorded in the Register as the owner of a Loan or other
obligation hereunder as the owner thereof for all purposes of this Agreement
and the other Loan Documents, notwithstanding any notice to the contrary. Any
assignment of any Loan or other obligation hereunder shall be effective only
upon appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Eligible Assignee (and consented to by the
Administrative Agent and, in the case of an Eligible Assignee that is not an
Affiliate of the assigning Lender, by the Borrower (in each case such consent
not to be unreasonably withheld)) together with payment to the Administrative
Agent of the registration and processing fee described in clause (a)(iii), the
Administrative Agent shall record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Borrower. Immediately upon the recordation of such information in the
Register, this Agreement shall be deemed to be amended to the extent, but only
to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom, and (i) the Eligible
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning
Lender pro tanto.
(e) Any Lender may at any time sell to one or more commercial Lenders
or other Persons not Affiliates of the Borrower and which is also an Eligible
Assignee (a "Participant") participating interests in any Loans, the Commitment
of that Lender and the other interests of that Lender (the "Originating
Lender") hereunder and under the other Loan Documents; provided, however, that
(i) the Originating Lender's obligations under this Agreement shall remain
unchanged, (ii) the Originating Lender shall remain solely responsible for the
performance of such obligations, (iii) the Borrower and
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<PAGE> 52
the Administrative Agent shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender's rights and
obligations under this Agreement and the other Loan Documents and (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the
extent such amendment, consent or waiver would require the consent of the
Originating Lender as an affected Lender as described in clause (a)(i) of
Section 11.1. In the case of any such participation, the Participant shall be
entitled to the benefit of Sections 4.1, 4.3 and 11.5 as though it were also a
Lender hereunder, but shall not be entitled to any greater amount than would be
payable to the original Lender if no participation had been made and if amounts
outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event
of Default, each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement.
(f) Subject to Section 11.9, the Borrower authorizes each Lender to
disclose to any Eligible Assignee or Participant (each, a "Transferee") and any
prospective Transferee any and all financial information in such Lender's
possession concerning the Borrower and its Affiliates that has been delivered
to such Lender by or on behalf of the Borrower in connection with such Lender's
credit evaluation of the Borrower and its Affiliates prior to such Transferee
or prospective Transferee becoming a party to this Agreement; provided,
however, that neither the Administrative Agent nor any Lender shall provide to
any Transferee or prospective Transferee any of the Confidential Information
unless such person shall have previously executed a confidentiality agreement
containing substantially similar terms to the terms specified in Section 11.9.
(g) Notwithstanding any other provision in this Agreement, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and the Note held by it in
favor of any Federal Reserve Bank in accordance with Regulation A of the FRB or
U.S. Treasury Regulation 31 CFR Section 203.14, or any successor thereto, and
such Federal Reserve Bank may enforce such pledge or security interest in any
manner permitted under applicable law.
11.9. Confidentiality. Each Lender agrees to maintain, in accordance
with its customary procedures for handling confidential information, the
confidentiality of all information provided to it by or on behalf of the
Borrower or any Subsidiary, or by the Administrative Agent on the Borrower's or
such Subsidiary's behalf, under this Agreement or any other Loan Document
("Confidential Information"), and neither it nor any of its Affiliates shall
use any such information other than in connection with or in enforcement of
this Agreement and the other Loan Documents or in connection with other
business now or hereafter existing or contemplated with the Borrower or any
Subsidiary, except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by the Lender or
(ii) was or becomes available on a non-confidential basis from a source other
than the Borrower, provided that such source is not bound by a confidentiality
agreement with the Borrower known to the Lender; provided, however, that any
Lender may disclose such information (A) at the request or pursuant to any
requirement of any Governmental Authority to which the Lender is subject or in
connection with an examination of such Lender by any such Authority; (B)
pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable Requirement of Law; (D) to the
extent reasonably required in connection with any litigation or proceeding to
which the Administrative Agent, any Lender or their respective Affiliates may
be party; (E) to the extent reasonably required in connection with the exercise
of any
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<PAGE> 53
remedy hereunder or under any other Loan Document; (F) to such Lender's
independent auditors and other professional advisors who have been advised that
such information is confidential pursuant to this Section 11.9; (G) to any
Participant or Assignee, actual or potential, provided that such Person shall
have agreed in writing to keep such information confidential to the same extent
required of the Lenders hereunder; and (H) to its Affiliates who have been
advised that such information is confidential pursuant to this Section 11.9.
Unless prohibited by applicable law or court order, each Lender and the
Administrative Agent shall notify the Borrower of any request by any
Governmental Authority (other than any request in connection with an
examination of the financial condition of such Lender) for disclosure of
Confidential Information prior to such disclosure; provided that in no event
shall the Administrative Agent or any Lender be obligated to return any
materials furnished by the Borrower, Holdings or any of their respective
Subsidiaries. This Section shall supersede any confidentiality letter or
agreement with respect to the Borrower or the Facilities entered into prior to
the date hereof.
11.10. Set-off. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness, credits or claims (in each case, in any
currency and whether direct or indirect, absolute or contingent, matured or
unmatured) at any time owing by such Lender (or any branch or agency thereof)
to or for the credit or the account of the Borrower against any and all
Obligations then due and payable by the Borrower hereunder (whether at the
stated maturity, by acceleration or otherwise). Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
11.11. Notification of Addresses, Lending Offices, etc. Each Lender
shall notify the Administrative Agent in writing of any changes in the address
to which notices to the Lender should be directed, of addresses of any Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Administrative
Agent shall reasonably request.
11.12. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
11.13. Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
11.14. No Third Parties Benefited. This Agreement is made and
entered into for the sole protection and legal benefit of the Borrower, the
Lenders, each Agent and the Agent-Related Persons, and their permitted
successors and assigns, and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any of the other Loan Documents.
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<PAGE> 54
11.15. Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE
NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
LOCATED IN THE COUNTY OF NEW YORK OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF THE BORROWER, THE AGENTS AND THE LENDERS CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH OF THE BORROWER, THE AGENTS AND THE LENDERS IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF
THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWER, THE AGENTS AND
THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
11.16. Waiver of Jury Trial. THE BORROWER, THE LENDERS AND THE
AGENTS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE THEIR RESPECTIVE RIGHTS TO
A TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. THE BORROWER
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF THIS AGREEMENT AND EACH OTHER
LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH
SUCH OTHER LOAN DOCUMENT.
11.17. Entire Agreement. This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding among the
Borrower, the Lenders and the Agents, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
SPALDING & EVENFLO COMPANIES, INC.,
as the Borrower
By: ___________________________________
Name:
Title:
EVENFLO & SPALDING HOLDINGS
CORPORATION, as a Guarantor
By: ___________________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION, as
Administrative Agent
By: ___________________________________
Name:
Title:
MERRILL LYNCH CAPITAL CORPORATION,
as Documentation Agent
By: ___________________________________
Name:
Title:
NATIONSBANK N.A. SOUTH, as
Syndication Agent
By: ___________________________________
Name:
Title:
<PAGE> 56
Lenders:
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
By: ___________________________________
Name:
Title:
MERRILL LYNCH CAPITAL CORPORATION
By: ___________________________________
Name:
Title:
NATIONSBANK N.A. SOUTH
By: ___________________________________
Name:
Title:
<PAGE> 1
[EXECUTION COPY]
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of March 31, 1998, among EVENFLO
& SPALDING HOLDINGS CORPORATION, a Delaware corporation (the
"Borrower"), the undersigned Subsidiaries of the Borrower
(each a "Subsidiary Grantor" and collectively, the "Subsidiary
Grantors"; the Borrower and the Subsidiary Grantors,
collectively, the "Grantors") and BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION ("BofA"), as administrative agent
(in such capacity, the "Administrative Agent") for the lenders
(the "Lenders") from time to time parties to the Credit
Agreement, dated as of September 30, 1996 (as amended by the
First Amendment to Credit Agreement, dated as of December 11,
1996, and as the same may be otherwise amended, amended and
restated, supplemented or modified from time to time, the
"Credit Agreement"), among the Borrower, the Lenders, BofA, as
swing line lender and as fronting lender, Merrill Lynch
Capital Corporation, as documentation agent (in such capacity,
the "Documentation Agent") for the Lenders, NationsBank N.A.
South, as syndication agent (in such capacity, the
"Syndication Agent") for the Lenders, the several financial
institutions specifically identified as Co-Agents on the
signature pages thereof and the Administrative Agent, for the
ratable benefit of the Secured Parties (as defined below).
W I T N E S S E T H
WHEREAS, (a) pursuant to the Credit Agreement, the Lenders
have severally agreed to make Credit Extensions (such capitalized term, and
other capitalized terms used in these recitals, to have the meanings set forth,
or defined by reference, in Section 1) to the Borrower upon the terms of and
subject to the conditions set forth therein and (b) one or more Lenders
(including those of its Affiliates that have appointed the Administrative Agent
to act on such Affiliate's behalf hereunder on terms substantially similar to
those set forth in Article X of the Credit Agreement, including the provisions
relating to exculpation and indemnification therein) may from time to time
enter into Swap Contracts with the Borrower (such Affiliates, together with
such Lenders, the Administrative Agent, the Documentation Agent, the
Syndication Agent, being referred to herein as the "Secured Parties");
WHEREAS, (a) the Borrower owns 100% of the capital stock of
each Subsidiary Grantor and (b) each Subsidiary Grantor has, pursuant to the
Guaranty (as the same may be amended, supplemented or otherwise modified),
guaranteed to the Administrative Agent, for the ratable benefit of the Secured
Parties and their respective successors, endorsees, transferees and assigns,
the prompt and complete payment and performance by the Borrower when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations;
WHEREAS, the proceeds of the Credit Extensions will be used in
part to enable the Borrower to make valuable transfers to the Subsidiary
Grantors in connection with the operation of their respective businesses;
<PAGE> 2
WHEREAS, the Borrower and the Subsidiary Grantors are engaged
in related businesses, and each Grantor will derive substantial direct and
indirect benefit from the making of the Credit Extensions; and
WHEREAS, it is a condition precedent to (a) the obligation of
the Lenders to continue to make their respective Credit Extensions to the
Borrower under the Credit Agreement and (b) the effectiveness of the agreements
set forth in Amendment No. 2 to the Credit Agreement, that the Borrower and the
Subsidiary Grantors shall have executed and delivered this Security Agreement
to the Administrative Agent for the ratable benefit of the Secured Parties;
NOW, THEREFORE, in consideration of the premises and to induce
the Secured Parties (as defined below) to make additional Credit Extensions and
as consideration for Credit Extensions previously made, each of the Grantors
hereby agrees with the Administrative Agent, for the ratable benefit of the
Secured Parties, as follows:
1. Defined Terms.
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
in the Credit Agreement, and the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined: Chattel Paper, Farm Products, Instruments and
Investment property.
(b) The following terms shall have the following meanings:
"Accounts": with respect to each Grantor, any and all right,
title and interest of such Grantor to payment for goods and services
sold or leased, including any such right evidenced by Chattel Paper,
whether due or to become due, whether or not it has been earned or
performed, and whether now or hereafter acquired or arising in the
future, including, without limitation, accounts receivable from
Affiliates of such person, except to the extent that the grant of a
security interest in Accounts owed by Affiliates not incorporated or
otherwise organized in the United States of America would result in
material adverse tax or legal consequences to such Grantor.
"Accounts Receivable": with respect to each Grantor, all
right, title and interest of such Grantor to Accounts and all of its
right, title and interest in any returned goods, together with all
rights, titles, securities and guaranties with respect thereto,
including any rights to stoppage in transit, replevin, reclamation and
resales, and all related security interests, liens and pledges,
whether voluntary or involuntary in each case whether due or become
due, whether now or hereafter arising in the future.
"Agreement": this Security Agreement, as the same may be
amended, amended and restated, modified or otherwise supplemented from
time to time.
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 2.1 of this Agreement.
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<PAGE> 3
"Collateral Account": any collateral account established by
the Administrative Agent as provided in Section 5.3 or Section 7.2.
"Computer Hardware and Software Collateral" means with respect
to each Grantor, its interests in the following, in each case to the extent the
grant by such Grantor of a security interest pursuant to this Agreement is not
prohibited without the consent of any other Person:
(a) all computer and other electronic data
processing hardware, integrated computer systems, central
processing units, memory units, display terminals, printers,
features, computer elements, card readers, tape drives, hard
and soft disk drives, cables, electrical supply hardware,
generators, power equalizers, accessories and all peripheral
devices and other related computer hardware;
(b) all software programs (including both source
code, object code and all related applications and data
files), whether now owned, licensed or leased or hereafter
acquired by each Grantor, designed for use on the computers
and electronic data processing hardware described in clause
(a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic
diagrams, manuals, guides and specifications) with respect to
such hardware, software and firmware described in the
preceding clauses (a) through (c); and
(e) all rights with respect to all of the foregoing,
including any and all copyrights, licenses, options,
warranties, service contracts, program services, test rights,
maintenance rights, support rights, improvement rights,
renewal rights and indemnifications and any substitutions,
replacements, additions or model conversions of any of the
foregoing.
"Contracts": with respect to each Grantor, all rights of such
Grantor under contracts and agreements to which such Grantor is a party or
under which such Grantor has any right, title or interest or to which such
Grantor or any property of such Grantor is subject, as the same may from time
to time be amended, supplemented or otherwise modified, including, without
limitation, (a) all rights of such Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (b) all rights of such Grantor
to damages arising out of, or for, breach or default in respect thereof and (c)
all rights of such Grantor to exercise all remedies thereunder, in each case to
the extent the grant by such Grantor of a security interest pursuant to this
Agreement in its rights under such contract or agreement is not prohibited
without the consent of any other person, or is permitted with consent if all
necessary consents to such grant of a security interest have been obtained from
all such other persons.
"Copyright Collateral" means with respect to each Grantor, its
interests in the following, in each case to the extent the grant by such
Grantor of a security interest pursuant to this Agreement is not prohibited
without the consent of any other Person:
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<PAGE> 4
(a) all copyrights (including copyrights for
semi-conductor chip product mask works) of each Grantor,
whether statutory or common law, registered or unregistered,
now or hereafter in force throughout the world including,
without limitation, all of each Grantor's right, title and
interest in and to all copyrights and mask works registered in
the United States Copyright Office or anywhere else in the
world and also including, without limitation, the copyrights
and mask works referred to in Item A of Schedule IV attached
hereto, and all applications for registration thereof
(including pending applications), including the copyright and
mask works registrations and applications referred to in Item
A of Schedule IV attached hereto, if any, and all copyrights
resulting from such applications;
(b) all extensions and renewals of any of the items
described in clause (a);
(c) all copyright and mask works licenses and other
agreements providing each Grantor with the right to use any of
the items of the type referred to in clauses (a) and (b),
including each copyright license referred to in Item B of
Schedule IV attached hereto, if any;
(d) the right to sue third parties for past, present
and future infringements of any of the Copyright Collateral
referred to in clauses (a) and (b) and, to the extent
applicable, clause (c); and
(e) all proceeds of, and rights associated with, the
foregoing, including, without limitation, licenses, royalties,
income, payments, claims, damages and proceeds of infringement
suits and all rights corresponding thereto throughout the
world.
"Deposit Accounts" means any and all demand, time, savings,
passbook or other accounts with a bank or other financial institution.
"Documents": with respect to each Grantor, all Instruments,
files, records, ledger sheets and documents covering or relating to any of the
Accounts, Equipment, General Intangibles, Intellectual Property, Inventory or
Proceeds.
"Equipment": with respect to each Grantor, all equipment,
furniture and furnishings, tools, accessories, parts and supplies of every kind
and description, wherever located, now or hereafter existing, and all
improvements, accessions or appurtenances thereto, including Fixtures, and all
other tangible personal property whether or not similar to any of the foregoing
items which are now or hereafter acquired by such Grantor.
"Fixtures": with respect to each Grantor, all items that
would otherwise constitute items of Collateral, whether now owned or hereafter
acquired, that become so related to particular real estate that an interest in
them arises under any real estate law applicable thereto to the extent that a
security interest therein may be perfected by filing a financing statement in
the applicable jurisdiction set forth on Schedule I hereto.
"General Intangibles": with respect to each Grantor, as
defined in the Uniform Commercial Code in effect in the State of New York on
the date hereof to the extent, in the case
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<PAGE> 5
of any General Intangibles arising under any contract or agreement, that the
grant by such Grantor of a security interest pursuant to this Agreement in its
rights under such contract or agreement is not prohibited without the consent
of any other person, or is permitted with consent if all necessary consents to
such grant of a security interest have been obtained from all such other
persons (it being understood that the foregoing shall not be deemed to obligate
such Grantor to obtain such consents), provided, that the foregoing limitation
shall not affect, limit, restrict or impair the grant by such Grantor of a
security interest pursuant to this Agreement in any Account or General
Intangible or any money or other amounts due or to become due under any such
contract or agreement to the extent provided in Section 9-318 of the Code as in
effect on the date hereof, and provided, further, that "General Intangibles"
shall not include any of the items within Section 2.1(h) herein and any General
Intangibles owed by Affiliates not incorporated or otherwise organized in the
United States of America to the extent that the grant of a security interest in
such General Intangibles would result in material adverse tax or legal
consequences to such Grantor.
"Indemnitee": the Secured Parties and their respective
officers, directors, trustees, affiliates and controlling persons.
"Intellectual Property Collateral" means, collectively, the
Computer Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"Inventory": with respect to each Grantor, all right, title
and interest of such Grantor in and to goods intended for sale or lease by such
person, or consumed in such person's business (including, without limitation,
all operating parts and supplies), together with all raw materials and finished
goods, whether now owned or hereafter acquired or arising.
"Material Intellectual Property Collateral": means the
following Trademarks: Spalding, Top-Flite, Etonic, Evenflo, Snugli, Gerry
Dudley, Strata and Hogan.
"Obligations": the collective reference to (i) the unpaid
principal of and interest on the Credit Extensions and all other obligations
and liabilities of the Borrower to the Administrative Agent or any Lender
(including, without limitation, interest accruing at the then-applicable rate
provided in the Credit Agreement after the maturity of the Credit Extensions
and interest accruing at the then-applicable rate provided in the Credit
Agreement after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, that may arise under, out of,
or in connection with, the Credit Agreement, the other Loan Documents, the
Letters of Credit, Acceptances or any other documents made, delivered or given
in connection therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid by the
Borrower or any Subsidiary Grantor pursuant to the terms of the Credit
Agreement or any other Loan Document), (ii) all obligations and liabilities of
the Borrower to any Secured Party, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, that may
arise under, out
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<PAGE> 6
of, or in connection with, any Swap Contract or any other document made,
delivered or given in connection therewith and (iii) all obligations of each
Obligor (other than the Borrower) now or hereafter existing under this
Agreement and each other Loan Document to which it is or may become a party.
"Patent Collateral" means with respect to each Grantor, its
interests owned in the following, in each case to the extent the grant by such
Grantor of a security interest pursuant to this Agreement is not prohibited
without the consent of any other Person:
(a) all letters patent and applications for letters
patent throughout the world, including all patent applications
in preparation for filing anywhere in the world and including
each patent and patent application referred to in Item A of
Schedule V attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations
of any of the items described in clause (a);
(c) all patent licenses and other agreements
providing each Grantor with the right to use any of the items
of the type referred to in clauses (a) and (b), including each
patent license referred to in Item B of Schedule V attached
hereto;
(d) the right to sue third parties for past, present
or future infringements of any Patent Collateral described in
clauses (a) and (b) and, to the extent applicable, clause (c);
and
(e) all proceeds of, and rights associated with, the
foregoing (including license royalties and proceeds of
infringement suits), the right to sue third parties for past,
present or future infringements of any patent or patent
application, including any patent or patent application
referred to in Item A of Schedule V attached hereto, and for
breach or enforcement of any patent license, including any
patent license referred to in Item B of Schedule V attached
hereto, and all rights corresponding thereto throughout the
world.
"Proceeds": with respect to each Grantor, any consideration
received from the sale, exchange or other disposition of any asset or property
which constitutes Collateral, any value received as a consequence of the
possession of any Collateral and any payment received from any insurer or other
person or entity as a result of the destruction, loss, theft, damage or other
involuntary conversion of whatever nature of any asset or property which
constitutes Collateral, and shall include, without limitation, (a) all cash and
negotiable Instruments received or held on behalf of the Administrative Agent
pursuant to Section 5.3 and (b) any claim of such Grantor against a third party
for (and the right to sue and recover for and the rights to damages or profits
due or accrued arising out of or in connection with) any and all amounts from
time to time paid or payable under or in connection with any of the Collateral.
"Secured Parties" is defined in the first recital.
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<PAGE> 7
"Select Liens": means Liens permitted pursuant to Section 8.1
of the Credit Agreement other than Specified Liens and Liens permitted pursuant
to Section 8.1(a) of the Credit Agreement.
"Specified Equipment": means Equipment, the aggregate book
value of which does not exceed $100,000, consisting of certain injection mold
machinery.
"Specified Liens": means Liens permitted pursuant to Sections
8.1(b), (f), (h), (l), (q) and (r) of the Credit Agreement, which Liens do not,
as of the date hereof, in the aggregate, secure obligations valued in excess of
$5,000,000.
"Senior Security Agreement": means the Security Agreement to
be executed by the Grantors in favor of BofA, as administrative agent
under, and for the ratable benefit of the administrative agent, the
documentation agent, the syndication agent, in each case, parties to, the
Liquidity Facility, dated as of March 30, 1998, among such Persons, the
Borrower, as a guarantor and Spalding & Evenflo Companies, Inc., a Delaware
corporation, as the borrower (as such Liquidity Facility may be amended,
amended and restated, supplemented or otherwise modified from time to time).
"Subject IP Collateral" is defined in clause (a) of Section
3.7.
"Subsidiary": a Subsidiary incorporated or otherwise
organized in the United States of America.
"Trademark Collateral" means with respect to each Grantor, its
interests owned in the following, in each case to the extent the grant by such
Grantor of a security interest pursuant to this Agreement is not prohibited
without the consent of any other Person:
(a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names,
trade styles, trade dress, service marks, certification marks,
collective marks, logos, other source of business identifiers,
prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature
and designs (all of the foregoing items in this clause (a)
being collectively called a "Trademark"), now existing in the
United States or hereafter adopted or acquired in the United
States, and all registrations and recordings thereof and all
applications in connection therewith, including registrations,
recordings and applications in the United States Patent and
Trademarks Office, including those referred to in Item A of
Schedule VI attached hereto, and all renewals thereof;
(b) all Trademark licenses and other agreements
providing each Grantor with the right to use any items of the
type described in clause (a), including each Trademark license
referred to in Item B of Schedule VI attached hereto, and all
renewals thereof;
(c) all of the goodwill of the business connected
with the use of, and symbolized by the items described in,
clause (a);
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(d) the right to sue third parties for past, present
and future infringements of any Trademark Collateral described
in clause (a) and, to the extent applicable, clause (b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by each Grantor against third
parties for past, present or future infringement or dilution
of any Trademark, Trademark registration or Trademark license,
including any Trademark, Trademark registration or Trademark
license referred to in Item A and Item B of Schedule VI
attached hereto, or for any injury to the goodwill associated
with the use of any such Trademark or for breach or
enforcement of any Trademark license and all rights
corresponding thereto throughout the world.
"Trade Secrets Collateral" means with respect to each Grantor,
its interests in the following, in each case to the extent the grant by such
Grantor of a security interest pursuant to this Agreement is not prohibited
without the consent of any other Person: all common law and statutory trade
secrets and all other confidential or proprietary or useful information (to the
extent such confidential, proprietary or useful information is protected by
each Grantor against disclosure and is not readily ascertainable) and all
know-how obtained by or used in or contemplated at any time for use in the
business of each Grantor (all of the foregoing being collectively called a
"Trade Secret"), whether or not such Trade Secret has been reduced to a writing
or other tangible form, including all documents and things embodying,
incorporating or referring in any way to such Trade Secret, all Trade Secret
licenses, including each Trade Secret license referred to in Schedule VII
attached hereto, and including the right to sue for and to enjoin and to
collect damages for the actual or threatened misappropriation of any Trade
Secret and for the breach or enforcement of any such Trade Secret license.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section references are to this Agreement
unless otherwise specified. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation".
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
2. Security Interest.
2.1 Grant of Security Interest. As collateral security for
the prompt and complete payment and performance when due, whether at the stated
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise of the Obligations (including the payment of all amounts that
constitute part of the Obligations and would be owed by the Obligors to the
Administrative Agent or the Secured Parties under the Loan Documents and any
Swap Contracts but for the fact that they are unenforceable or not allowable
due to the existence of an Insolvency Proceeding involving any such Obligor),
each Grantor hereby grants to the Administrative Agent, for the ratable benefit
of the Secured Parties, a first priority security interest in all of the
following property now owned or at any time hereafter acquired by such Grantor,
subject only to Liens permitted pursuant to Section 3.3 hereof (collectively,
with respect to each Grantor, the "Collateral"):
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<PAGE> 9
(a) all Accounts Receivable;
(b) all Contracts;
(c) all Documents;
(d) all Equipment;
(e) all General Intangibles;
(f) all Instruments;
(g) all Inventory;
(h) all Intellectual Property Collateral;
(i) all Investment property;
(j) all books and records pertaining to the Collateral;
(k) all other personal property in which a security interest
may be perfected by filing a financing statement in the applicable
jurisdictions set forth in Schedule I hereto; and
(l) to the extent not otherwise included, all Proceeds,
products, offspring, rents, issues, profits, returns and income of any and all
of the foregoing.
Notwithstanding anything contained in this Agreement or any Loan Document to
the contrary, "Collateral" shall not include any property of the type specified
in Sections 2.1(b), (d) (to the extent such Equipment constitutes Fixtures),
(e), (f), (g) and (h) if the granting of a Lien by such Grantor hereunder would
violate the terms of, or otherwise constitute a default under, any document or
instrument to which any Grantor is a party (other than those documents or
Instruments between or among any of the Grantors only) relating to the
ownership of, or pertaining to any rights or interests held in, such property.
Such security interests are granted as security only and shall
not subject any Secured Party to, or in any way alter or modify, any obligation
or liability of any Grantor with respect to or arising out of the Collateral.
2.2 Security Interest Absolute. All rights of the
Administrative Agent and the security interests granted to the Administrative
Agent hereunder, and all Obligations of the Grantors hereunder, shall be
absolute and unconditional, irrespective of
(a) to exercise any right or remedy against any guarantor of,
or collateral securing, any Obligations,
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations or any other
extension, compromise or renewal of any Obligation,
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<PAGE> 10
(c) any reduction, limitation, impairment or termination of
any Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and each Grantor hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Obligations or otherwise,
(d) any amendment to, rescission, waiver, or other
modification of, or any consent to or departure from, any of the
terms of the Credit Agreement, any Note, any Letters of Credit,
any Acceptances or any other Loan Document,
(e) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Obligations, or
(f) any other circumstances which might otherwise constitute
a defense available to, or a legal or equitable discharge of, the
Borrower, any other Obligor, any surety or any guarantor.
2.3 Postponement of Subrogation, etc. No Grantor will
exercise any rights which it may acquire by reason of any payment made
hereunder, whether by way of subrogation, reimbursement or otherwise, until the
prior payment, in full and in cash, of all Obligations, the irrevocable
termination of all Commitments, the termination or expiration of all Letters of
Credit and the maturity of all Acceptances. Any amount paid to a Grantor on
account of any payment made hereunder prior to the payment in full in cash of
all Obligations, the termination or expiration of all Letters of Credit and the
maturity of all Acceptances, shall be held in trust for the benefit of the
Secured Parties and shall immediately be paid to the Secured Parties and
credited and applied against the Obligations, whether matured or unmatured, in
accordance with the terms of Section 7.3; provided, however, that if
(a) any Grantor has made payment to the Secured Parties of
all or any part of the Obligations, and
(b) all Obligations have been paid in full in cash and all
Commitments have been irrevocably terminated, the Letters of Credit
are terminated or expired and the Acceptances are matured,
each Secured Party agrees that, at such Grantor's request and expense, the
Secured Parties will execute and deliver to the applicable Grantor appropriate
documents (without recourse and without representation or warranty) necessary
to evidence the transfer by subrogation to such Grantor of an interest in the
Obligations resulting from such payment by such Grantor. In furtherance of the
foregoing, for so long as any Obligations remain outstanding or Commitments
remain outstanding, each Grantor shall refrain from taking any action or
commencing any proceeding against the Borrower or any other Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in respect of payments made under this
Agreement to any Secured Party.
3. Representations and Warranties. Each Grantor hereby
represents as follows:
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3.1 Title; No Other Liens. Except for the security interest
granted to the Administrative Agent for the ratable benefit of the Secured
Parties pursuant to this Agreement and any other Liens permitted to exist
pursuant to the Credit Agreement, if any (the "Permitted Liens"), each Grantor
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 such Collateral is on file or of record in
any public office, except such as have been filed, pursuant to this Agreement,
in favor of the Administrative Agent, for the ratable benefit of the Secured
Parties, or in respect of Permitted Liens.
3.2 Authority. Each Grantor has full power and authority to
grant to the Administrative Agent the security interest in the Collateral
pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of
any other person other than any consent or approval that has been obtained.
3.3 Enforceable Obligation; Perfected, First Priority
Security Interests. This Agreement constitutes a legal, valid and binding
obligation of each Grantor, enforceable against such Grantor in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting creditors' rights
generally and except as enforceability may be limited by general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law), and the security interests granted pursuant to this
Agreement (a) upon-completion of the filings and other actions specified in
Schedule I hereto shall constitute perfected security interests in the
Collateral (other than as to the Specified Equipment) in favor of the
Administrative Agent for the ratable benefit of the Secured Parties, and (b)
are prior to all other Liens on the Collateral in existence on the date hereof,
except for (i) any Specified Liens, (ii) any Select Liens and (iii) Liens
granted pursuant to the Senior Security Agreement.
3.4 Inventory and Equipment. The Inventory and the Equipment
owned by such Grantor are kept at the locations listed in Schedule II hereto,
which shall be updated from time to time in accordance with Section 4.5 of this
Agreement, or at such other locations as shall be permitted by Section 4.4.
3.5 Chief Executive Office. As of the Closing Date, each
Grantor's chief executive office and chief place of business is located at the
location under its signature set forth below.
3.6 Intentionally Omitted.
3.7 Intellectual Property Collateral. With respect to any
Material Intellectual Property Collateral maintained in the United States and
any other market material to the Borrower's and its Subsidiaries' businesses,
each Grantor has kept such Material Intellectual Property Collateral registered
with the applicable federal, state or foreign authority, as the case may be,
with an appropriate notice of such registration and has taken all reasonable
steps to maintain such Material Intellectual Property Collateral and any and
all rights with respect thereto and has not abandoned, or permitted to become
unenforceable, any Material Intellectual Property Collateral, in each case,
except where the same could not reasonably be expected to have a Material
Adverse Effect. No consent of any other Person is required in order for any
Grantor to grant a first priority security interest in the Material
Intellectual Property Collateral to the Administrative Agent pursuant to this
Agreement.
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<PAGE> 12
4. Covenants. Each Grantor covenants and agrees with the
Secured Parties that, from and after the date of this Agreement until (a) the
payment in full in cash of all Obligations, (b) this Agreement is terminated
and the security interests created hereby are released, (c) all Commitments are
terminated, (d) the Letters of Credit are terminated or expired and (e) the
Acceptances are matured, such Grantor will perform, comply with and be bound by
the obligations set forth in this Section:
4.1 Delivery of Instruments and Chattel Paper. If an Event
of Default shall have occurred and be continuing and if any amount payable
under or in connection with any of the Collateral owned by such Grantor shall
be or become evidenced by any promissory note, other instrument or Chattel
Paper, upon the request of the Administrative Agent, such promissory note,
instrument or Chattel Paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner reasonably satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement.
4.2 Maintenance of Insurance. Each Grantor shall maintain
insurance policies in accordance with the requirements of Section 7.6 of the
Credit Agreement. Within thirty (30) days of the date hereof, the Borrower
shall provide the Administrative Agent with a certificate of the Secretary or
Assistant Secretary of the Borrower setting forth the nature and extent of all
insurance maintained by the Borrower and its Subsidiaries, which certificate
shall also indicate where appropriate any such insurance policy for which the
Administrative Agent is named as "loss payee" or "additional insured", in
accordance with customary practice for transactions of this type, in each case,
as reasonably satisfactory to the Administrative Agent and as customary for
transactions of this type.
4.3 Maintenance of Perfected Security Interest; Further
Documentation. (a) Each Grantor shall cause all filings and other actions
listed in Schedule I to be taken. Each Grantor shall maintain the security
interests created by this Agreement as first, perfected security interests
subject only to Liens permitted pursuant to Section 3.3 hereof, and shall
defend such security interests against all claims and demands of all persons
whomsoever (other than those pursuant to Liens permitted pursuant to Section
3.3 hereof).
(b) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of a Grantor, such
Grantor shall 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 Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements
under the Uniform Commercial Code in effect in any jurisdiction with respect to
the security interests created hereby.
4.4 Changes in Locations, Name, etc. A Grantor shall not,
except (x) upon ten (10) days' prior written notice to the Administrative Agent
and delivery to the Administrative Agent of a written supplement to Schedule II
showing the additional location or locations at which Inventory or Equipment
shall be kept, and (y) if filings under the Code or otherwise have been made
which maintain in favor of the Administrative Agent a valid, legal and
perfected security interest in the Collateral subject to no Liens, other than
Liens permitted pursuant to Section 3.3 hereof,
(a) permit any of the Inventory or Equipment to be kept at a
location other than those listed in Schedule II hereto, except for
Inventory and Equipment (i) in transit between locations described in
this paragraph (a), (ii) in transit as part of a delivery to a
purchaser thereof, (iii) as to
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Specified Equipment only, when, as part of such Grantor's ordinary
course of business, such Specified Equipment is located in
jurisdictions where no financing statement in favor of the
Administrative Agent has been duly filed, or (iv) transferred to a
Foreign Subsidiary in a transaction, in each case, as permitted by the
Credit Agreement;
(b) change the location of its chief executive office and
chief place of business from that specified in Section 3.5; or
(c) change its (i) corporate name or any trade name
used to identify it in its conduct of business or in the ownership of
its properties, (ii) identity or (iii) corporate structure to such an
extent that any financing statement filed in favor of the
Administrative Agent in connection with this Agreement would become
seriously misleading.
4.5 Further Identification of Collateral. Each Grantor shall
furnish to the Administrative Agent from time to time statements and schedules
further identifying and describing the Collateral and, subject to Section 4.9
hereof, Deposit Accounts, and such other reports in connection with such
Collateral and Deposit Accounts as the Administrative Agent may reasonably
request, all in reasonable detail.
4.6 Notices. A Grantor shall advise the Administrative Agent
promptly in reasonable detail, at its address set forth pursuant to Section
11.2 of the Credit Agreement of:
(a) any Lien (other than security interests created hereby or
Permitted Liens) on, any material portion of the Collateral;
(b) the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the security interests created
hereby or on the aggregate value of (i) the Collateral and (ii) all other
Collateral (as such term is defined in the Pledge Agreements) of the Borrower
and its Subsidiaries taken as a whole; and
(c) the changing of the location of any Deposit Account and
the creation of a new, and the closing of a theretofore existing, Deposit
Account.
4.7 Administrative Agent's Liabilities and Expenses;
Indemnification. (a) Notwithstanding anything to the contrary provided
herein, the Administrative Agent assumes no liabilities with respect to any
claims regarding each Grantor's ownership (or purported ownership) of, or
rights or obligations (or purported rights or obligations) arising from, the
Collateral or any use (or actual or alleged misuse) whether arising out of any
past, current or future event, circumstance, act or omission or otherwise, or
any claim, suit, loss, damage, expense or liability of any kind or nature
arising out of or in connection with the Collateral or the production,
marketing, delivery, sale or provision of goods or services under or in
connection with any of the Collateral. All of such liabilities shall, as
between the Administrative Agent and the Grantors, be borne exclusively by the
Grantors.
(b) Each Grantor hereby agrees to pay all expenses of the
Administrative Agent and to indemnify the Administrative Agent with respect to
any and all losses, claims, damages, liabilities and related expenses in
respect of this Agreement or the Collateral in each case to the extent the
Borrower is required to do so pursuant to Section 10.7 of the Credit Agreement.
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(c) Any amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the Pledge Agreements. Without
prejudice to the survival of any other agreements contained herein, all
indemnification and reimbursement obligations contained herein shall survive
the payment in cash in full of the principal and interest under the Credit
Agreement and the termination of the Commitments or this Agreement.
4.8 Use and Disposition of Collateral. A Grantor shall not
(a) make or permit to be made an assignment, pledge or hypothecation of the
Collateral, and shall grant no other security interest in such Collateral
(other than (i) pursuant hereto, (ii) any Permitted Liens or (iii) pursuant to
the Senior Security Agreement) or (b) make or permit to be made any transfer of
such Collateral, and shall remain at all times in possession thereof other than
transfers to the Administrative Agent pursuant to the provisions hereof;
notwithstanding the foregoing, such Grantor may use and dispose of such
Collateral in any lawful manner not in violation of the provisions of this
Agreement, the Credit Agreement or any other Loan Document, unless the
Administrative Agent shall, after an Event of Default shall have occurred and
during the continuance thereof, notify such Grantor not to sell, convey, lease,
assign, transfer or otherwise dispose of any such Collateral other than
Inventory in the ordinary course of business and other than any other transfers
between the Grantors.
4.9 Deposit Accounts. Within thirty (30) days of the date
hereof, the Borrower shall provide the Administrative Agent with a schedule
(which schedule shall (x) be delivered to the Administrative Agent for
safekeeping purposes only, and (y) not be delivered to the Lenders except upon
their written request therefor in connection with the exercise of rights and
remedies pursuant to this Agreement), substantially in the form of Schedule
VIII hereto, which schedule shall identify all Deposit Accounts owned by the
Grantors and the financial institutions and the locations where such Deposit
Accounts are maintained, which schedule shall be updated from time to time in
accordance with Sections 4.5 and 4.6 of this Agreement. Subject to, and
without limiting the effect of, Section 7.2, following the occurrence and
continuance of an Event of Default and at the direction of the Majority
Lenders, each Grantor shall make its reasonable best efforts to maintain each
of its Deposit Accounts pursuant to a deposit account agreement which is in all
respects satisfactory to the Administrative Agent and which provides, among
other things, that (a) until the deposit account bank shall have received
written notice from the Administrative Agent pursuant to this clause, the
deposit account bank will make all payments from the Deposit Account as
specified by the applicable Grantor, and, after any such notice, the deposit
account bank will make all payments from such Deposit Account to the
Administrative Agent for credit to the Collateral Account, (b) the deposit
account bank (if other than the Administrative Agent or a Lender) waives all
setoff rights (other than setoff rights for reasonable and customary account
service charges and fees and amounts based on items that are dishonored by the
payor thereof and returned to the deposit account bank), and (c) such deposit
account agreement may not be amended without the written consent of the
Administrative Agent. The Administrative Agent will not give the notice
referred to in the preceding clause (a) unless it has given, or is
contemporaneously giving, notice pursuant to Section 7.2. In the event that a
deposit account bank refuses to enter into a deposit account agreement in
accordance with the above listed terms within thirty (30) days of a Grantor's
request, the Administrative Agent shall have the right to direct each Grantor
to transfer the assets in that deposit account to a bank which will enter into
a deposit account agreement in accordance with the above listed terms.
4.10 As to Intellectual Property Collateral. With respect to
any Material Intellectual Property Collateral maintained in the United States
and any other market material to the Borrower's and its Subsidiaries'
businesses, each Grantor covenants and agrees to keep such Material
Intellectual
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Property Collateral registered with the applicable federal, state
or foreign authority, as the case may be, with an appropriate notice of such
registration and covenants and agrees to take all reasonable steps to maintain
such Material Intellectual Property Collateral and any and all rights with
respect thereto and will not abandon, or permit to become unenforceable, any
Material Intellectual Property Collateral, in each case, except where the same
could not reasonably be expected to have a Material Adverse Effect. If any
Grantor shall own any Intellectual Property, such Grantor shall execute and
deliver to the Administrative Agent any documents required to acknowledge or
register or perfect the Administrative Agent's interest in any part of the
Intellectual Property Collateral.
5. Provisions Relating to Accounts.
5.1 Grantors Remain Liable under Accounts. Anything herein
to the contrary notwithstanding, a Grantor shall remain liable under each of
the Accounts 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. No Secured Party shall have
any obligation or liability under any Account (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any Secured Party of any payment relating to such
Account pursuant hereto, nor shall any Secured Party be obligated in any manner
to perform any of the obligations of a Grantor under or pursuant to any Account
(or any agreement giving rise thereto), to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party under any Account (or any
agreement giving rise thereto), to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
5.2 Analysis of Accounts. The Administrative Agent shall
have the right upon the occurrence and during the continuance of an Event of
Default to make test verifications of the Accounts in any manner and through
any medium that it considers reasonably advisable, and each Grantor shall
furnish all such assistance and information as the Administrative Agent may
reasonably require in connection with such test verifications. At any time and
from time to time upon the occurrence and during the continuance of an Event of
Default, upon the Administrative Agent's reasonable request and at the expense
of each Grantor, each Grantor shall cause independent public accountants or
others reasonably 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. Upon the occurrence
and during the continuance of an Event of Default, the Administrative Agent in
its own name or in the name of others may communicate with account debtors on
the Accounts to verify with them to the Administrative Agent's reasonable
satisfaction the existence, amount and terms of any Accounts.
5.3 Collections on Accounts. (a) The Administrative Agent
hereby authorizes each Grantor to collect the Accounts, and the Administrative
Agent may curtail or terminate said authority at any time after the occurrence
and during the continuance of an Event of Default. If required by the
Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Accounts, when collected by
a Grantor during the continuance of such Event of Default, (i) shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Administrative Agent if required, in a Collateral Account maintained under the
sole dominion and control of and on terms and conditions reasonably
satisfactory to the Administrative Agent, subject to withdrawal by the
Administrative Agent
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as provided in Section 7.3, and (ii) until so turned over, shall be held by
such Grantor in trust for the Secured Parties, segregated from other funds of
such Grantor.
(b) At the Administrative Agent's reasonable request after
the occurrence and during the continuance of an Event of Default, each Grantor
shall deliver to 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.
5.4 Representations and Warranties. As of the Closing Date,
the place where each Grantor keeps its records concerning its Accounts is at
the location listed in Schedule III hereto.
5.5 Covenants. (a) The amount represented by each Grantor
to the Secured Parties from time to time as owing by each account debtor or by
all account debtors in respect of the Accounts shall at such time be in all
material respects the correct amount actually owing by such account debtor or
debtors thereunder.
(b) Upon the occurrence and during the continuance of an
Event of Default, a Grantor shall not grant any extension of the time of
payment of any of the Accounts Receivable, compromise, compound or settle the
same for less than the full amount thereof, release, wholly or partly, any
person liable for the payment thereof, or allow any credit or discount
whatsoever thereon other than in the ordinary course of such Grantor's
business, in each case if the Administrative Agent has instructed such Grantor
not to do so.
(c) Unless a Grantor shall deliver ten (10) days' prior
written notice identifying the change of location for its books and records,
such Grantor shall not remove its books and records from the location specified
in Section 5.4.
6. Provisions Relating to Contracts.
6.1 Grantors Remain Liable Under Contracts. Anything herein
to the contrary notwithstanding, each Grantor shall remain liable under each
Contract to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of such Contract. No Secured Party shall have any
obligation or liability under any Contract by reason of or arising out of this
Agreement or the receipt by any such Secured Party of any payment relating to
such Contract pursuant hereto, nor shall any Secured Party be obligated in any
manner to perform any of the obligations of a Grantor 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 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.
6.2 Communication With Contracting Parties. Upon the
occurrence and during the continuance of an Event of Default, the
Administrative Agent in its own name or in the name of others may communicate
with parties to the Contracts to verify with them to the Administrative Agent's
satisfaction the existence, amount and terms of any Contracts.
7. Remedies.
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7.1 Notice to Account Debtors and Contract Parties. Upon the
request of the Administrative Agent at any time after the occurrence and during
the continuance of an Event of Default, a Grantor 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 Secured Parties and that payments in respect thereof during the
continuance of such an Event of Default shall be made directly to the
Administrative Agent.
7.2 Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Administrative Agent and the Secured Parties
specified in Section 5.3 with respect to payments of Accounts, if an Event of
Default shall occur and be continuing all Proceeds received by a Grantor
consisting of cash, checks and other near-cash items shall upon the
Administrative Agent's request be held by such Grantor in trust for the Secured
Parties, segregated from other funds of such Grantor, and shall, upon the
Administrative Agent's request (it being understood that the exercise of
remedies by the Secured Parties in connection with an Event of Default under
Sections 9.1 (f) or (g) of the Credit Agreement, shall be deemed to constitute
a request by the Administrative Agent for the purposes of this sentence)
forthwith upon receipt by such Grantor, be turned over to the Administrative
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Administrative Agent, if required) and held by the Administrative Agent
in a Collateral Account maintained under the sole dominion and control of the
Administrative Agent and on terms and conditions reasonably satisfactory to the
Administrative Agent. All Proceeds while held by the Administrative Agent in a
Collateral Account (or by such Grantor in trust for the Administrative Agent
and the Secured Parties) shall subject to Section 7.3 continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 7.3.
7.3 Application of Proceeds. If an Event of Default shall
have occurred and be continuing, and the Administrative Agent shall have
requested that a Grantor take any action set forth in Section 5.3(a) or 7.2 or
the Administrative Agent shall have taken any action pursuant to Section 7.4,
the Administrative Agent shall apply the proceeds as follows:
First, to the payment of the reasonable costs and expenses of
the Administrative Agent as set forth in Sections 7.4 and 15;
Second, to the payment of all amounts of the Obligations owed
to the Secured Parties in respect of Credit Extensions made by them,
pro rata as among the Secured Parties in accordance with the amount of
such Obligations owed to them;
Third, ratably against Obligations consisting of unpaid and
outstanding principal of the Loans, Obligations then due and owing
under all outstanding Swap Contracts and Obligations consisting of
unreimbursed and owing Special Facility Obligations and other similar
obligations;
Fourth, to collateralize Obligations consisting of Special
Facility Obligations and other similar obligations; and
Fifth, against any other remaining Obligations.
The Administrative Agent may assume that no Obligations are outstanding with
respect to Swap Contracts unless it has received written notice thereof in
accordance with this Agreement prior to any
- 17 -
<PAGE> 18
such application by it, and if so notified may rely upon and deal with the
Secured Party party to such Swap Contract as to Obligations thereunder.
7.4 Code Remedies. If an Event of Default shall have
occurred and be continuing, the Administrative Agent, on behalf of the Secured
Parties may exercise, in addition to all other rights and remedies granted to
them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the Code (whether or not, because of the jurisdiction of the
Collateral, the Code applies to the applicable Collateral). 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 a
Grantor or any other person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give an 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 any Secured Party 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. Any Secured Party shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of (to the extent permitted by law) any right
or equity of redemption in a Grantor, which right or equity is hereby, to the
extent permitted by law, waived or released. Each Grantor 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 Grantor's premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses incurred therein or incidental to the care or
safekeeping of any of such Collateral or reasonably relating to such Collateral
or the rights of the Administrative Agent and the Secured Parties hereunder,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Obligations, in accordance with Section
7.3, 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(l)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to such Grantor. If any
notice of a proposed sale or other disposition of such Collateral shall be
required by law, such notice shall be in writing and deemed reasonable and
proper if given at least ten (10) days before such sale or other disposition.
The Administrative Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Administrative Agent may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
The Administrative Agent shall have absolute discretion as to
the time of application of any such proceeds, money or balances in accordance
with this Agreement. Upon any sale of the Collateral by the Administrative
Agent (including pursuant to a power of sale granted by statute or under a
judicial proceeding), the receipt of the Administrative Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Administrative Agent or such officer or be answerable in any way for the
misapplication thereof.
- 18 -
<PAGE> 19
7.5 Waiver; Deficiency. Each Grantor waives and agrees not
to assert any rights or privileges it may acquire under Section 9-112 of the
Code. Each Grantor 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 reasonable fees and disbursements of any attorneys employed
by any Secured Party to collect such deficiency.
8. Administrative Agent's Appointment as Attorney-in-Fact;
Administrative Agent's Performance of Grantors' Obligations.
8.1 Powers. Each Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, during the continuance of an Event of Default, as its
true and lawful attorney-in-fact, with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name from time to time in the Administrative Agent's discretion, for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement,
and, without limiting the generality of the foregoing, such Grantor hereby
gives the Administrative Agent the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, to do the following upon the
occurrence and during the continuance of an Event of Default:
(a) in the name of such Grantor or its own name, or
otherwise, to take possession of and indorse 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 money due under any
Account, Instrument, General Intangible or Contract or with respect to
any other Collateral whenever payable;
(b) to pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral (other than Permitted Liens), to
effect any repairs or any insurance called for by the terms of this
Agreement and to pay all or any part of the premiums therefor and the
costs thereof,
(c) to execute, in connection with any sale provided for in
Section 7.4 hereof, any endorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(d) (i) 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; (ii) to ask or demand for, collect,
receive payment of and receipt for, any and all money, claims and
other amounts due or to become due at any time in respect of or
arising out of any Collateral; (iii) 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; (iv) 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; (v) to defend any suit, action or proceeding brought
against any Grantor with respect to any Collateral; (vi) to settle,
compromise or adjust any such suit, action
- 19 -
<PAGE> 20
or proceeding and, in connection therewith, to give such discharges or
releases as the Administrative Agent may deem appropriate; and (vii)
generally, to use, 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 at the expense of such Grantor, at any time, or from time
to time, all acts and things which the Administrative Agent reasonably
deems necessary to protect, preserve or realize upon such Collateral
and the Administrative Agent's and the Secured Parties' security
interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.
8.2 Performance by Administrative Agent of Grantor's
Obligations. If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation to do so, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
8.3 Grantor's Reimbursement Obligation. The expenses of the
Administrative Agent reasonably incurred in connection with actions undertaken
as provided in this Section 8, together with interest thereon at a rate per
annum equal to the default rate of interest set forth in Section 2.10(c) of the
Credit Agreement, from the date payment is demanded by the Administrative Agent
to the date reimbursed by such Grantor, shall be payable by the Borrower to the
Administrative Agent on demand.
8.4 Ratification; Power Coupled With An Interest. Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof. All powers, authorizations and agencies contained in
this Agreement are coupled with an interest and are irrevocable until this
Agreement is terminated and the security interests created hereby are released.
9. Duty of Administrative Agent. The Administrative Agent's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar property for its own account. No Secured Party nor any of its
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 a Grantor or any other person or to take any
other action whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the Secured Parties hereunder are solely to protect the
Secured Parties' interests in the Collateral and shall not impose any duty upon
any Secured Party to exercise any such powers. The Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or wilful misconduct.
10. Execution of Financing Statements. Pursuant to Section
9-402 of the Code, each Grantor authorizes the Administrative Agent to file
financing statements with respect to the Collateral without the signature of
such Grantor in such form and in such filing offices as the Administrative
Agent reasonably determines appropriate to perfect the security interests of
the Administrative Agent under this Agreement. A carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement for
filing in any jurisdiction.
- 20 -
<PAGE> 21
11. Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the other Secured Parties, 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
Grantors, the Administrative Agent shall be conclusively presumed to be acting
as agent for the other Secured Parties with full and valid authority so to act
or refrain from acting.
12. Reinstatement. This Agreement 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 Secured Party upon the
filing or commencement of any Insolvency Proceeding in respect of any Grantor,
or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, such Grantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
13. Notices. All notices, requests and demands to or upon
the Secured Parties or the Grantors under this Agreement shall be given or made
in accordance with Section 11.2 of the Credit Agreement and addressed as
follows:
(a) if to any Grantor other than the Borrower, in care of the
Borrower in accordance with Section 11.2 of the Credit Agreement
(b) if to the Borrower, in accordance with Section 11.2 of
the Credit Agreement; and
(c) if to any Secured Party, in accordance with Section 11.2
of the Credit Agreement.
14. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Secured Parties and shall survive the making by
the Lenders of the Credit Extensions, the execution and delivery to the Lenders
of the Loan Documents, the issuance of any Letters of Credit and the creation
of any Acceptances, regardless of any investigation made by the Secured Parties
or on their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or Special Facility
Obligation, or any fee or any other amount payable under or in respect of this
Agreement or any other Loan Document is outstanding and unpaid and so long as
the Commitments have not been terminated, all Letters of Credit have not
terminated or expired and all Acceptances have not matured.
15. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO
- 21 -
<PAGE> 22
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 15.
16. Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that
any Grantor or any Secured Party may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against any
Grantor or any Secured Party or its properties in the courts of any
jurisdiction.
(b) Each Grantor and each Secured Party hereby irrevocably
and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or the other Loan Documents in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 13. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
17. Release. (a) Unless the Grantors and the Administrative
Agent otherwise agree, this Agreement and the security interest created
hereunder shall terminate when all Obligations have been fully and indefeasibly
paid in full in cash, when the Secured Parties have no further Commitments
under the Credit Agreement, the Letters of Credit are terminated or expired and
the Acceptances are matured, at which time the Administrative Agent shall
execute and deliver to each Grantor, or to such person or persons as such
Grantor shall reasonably designate, all at such Grantor's sole expense, all
Uniform Commercial Code termination statements and similar documents prepared
by such Grantor which such Grantor shall reasonably request to evidence such
termination. Any execution and delivery of termination statements or documents
pursuant to this Section 17(a) shall be without recourse to or warranty by the
Administrative Agent.
(b) All Collateral used, sold, transferred or otherwise
disposed of, in accordance with the terms of the Credit Agreement (including
pursuant to a waiver or amendment of the terms thereof) shall be used, sold,
transferred or otherwise disposed of free and clear of the Lien and the
security interest created hereunder. In connection with the foregoing, (i) the
Administrative Agent shall execute
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<PAGE> 23
and deliver to each Grantor, or to such person or persons as such Grantor shall
reasonably designate, all at such Grantor's sole expense, all Uniform
Commercial Code termination statements and similar documents prepared by such
Grantor which such Grantor shall reasonably request to evidence the release of
the Lien and security interest created hereunder with respect to such
Collateral and (ii) any representation, warranty or covenant contained herein
relating to such Collateral shall no longer be deemed to be made with respect
to such used, sold, transferred or otherwise disposed Collateral.
18. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. The parties hereunder
shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions, the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
19. Amendments in Writing; No Waiver; Cumulative Remedies.
19.1 Amendments in Writing. None of the terms or provisions
of this Agreement may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by the Grantors and the Administrative
Agent (on behalf of the Lenders or the Majority Lenders, as the case may be).
19.2 No Waiver by Course of Conduct. No Secured Party shall
by any act (except by a written instrument pursuant to Section 19.1 hereof) or
delay 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, nor any delay in
exercising, on the part of any Secured Party, 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 any Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which such
Secured Party would otherwise have on any future occasion.
20. Remedies Cumulative. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
21. Section Headings. The section and Section headings used
in this Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
22. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of each Grantor and the Secured Parties and their successors and assigns,
provided that this Agreement may not be assigned by any Grantor without the
prior written consent of the Administrative Agent.
23. Loan Document, etc. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.
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<PAGE> 24
24. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
25. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract.
26. Additional Grantors. Pursuant to the Credit Agreement,
each Subsidiary that was not in existence or not a Subsidiary on the date
thereof is required to enter into this Agreement as a Grantor upon becoming a
Subsidiary. Upon execution and delivery, after the date hereof, by the
Administrative Agent and such Subsidiary of an instrument in the form of Annex
1, such Subsidiary shall become a Grantor hereunder with the same force and
effect as if originally named as a Grantor hereunder. The execution and
delivery of any such instrument shall not require the consent of any Grantor
hereunder. The rights and obligations of each Grantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Grantor as a
party to this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 24 -
<PAGE> 25
IN WITNESS WHEREOF, the undersigned have caused this Security
Agreement to be duly executed and delivered as of the date first above written.
EVENFLO & SPALDING HOLDINGS
CORPORATION
SPALDING & EVENFLO COMPANIES, INC.
EVENFLO COMPANY, INC.
ETONIC WORLDWIDE CORPORATION
LISCO, INC.
S&E FINANCE CO., INC.
SPALDING SPORTS CENTERS, INC.
ETONIC LISCO, INC.
LISCO FURNITURE, INC.
LISCO FEEDING, INC.
LISCO SPORTS, INC.
By: ______________________________
Name: W. Michael Kipphut
Title: Treasurer and Vice President
S&E FINANCE CO., INC.
By: ______________________________
Name: Paul L. Whiting
Title: President & CEO
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
as Administrative Agent
By: ______________________________
Name:
Title:
<PAGE> 26
Schedules:
Schedule I Filings and Other Actions Required to Perfect Security
Interests
Schedule II Inventory and Equipment
Schedule III Records of Accounts
Schedule IV Copyrights and Mask Works
Schedule V Patents
Schedule VI Trademarks
Schedule VII Trade Secrets
Schedule VIII Deposit Accounts
- 26 -
<PAGE> 27
SCHEDULE I
TO SECURITY AGREEMENT
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
Name of Grantor Filing Jurisdiction
--------------- -------------------
- 27 -
<PAGE> 28
SCHEDULE II
TO SECURITY AGREEMENT
INVENTORY AND EQUIPMENT LOCATIONS
Name of Grantor Location
--------------- --------
- 28 -
<PAGE> 29
SCHEDULE III
TO SECURITY AGREEMENT
RECORDS OF ACCOUNTS
Name of Grantor Location
--------------- --------
- 29 -
<PAGE> 30
SCHEDULE IV
TO SECURITY AGREEMENT
Item A. Copyrights/Mask Works
Registered Copyrights/Mask Works
--------------------------------
<TABLE>
<CAPTION>
Grantor Registration No. Registration Date Author(s) Title
- ------- ---------------- ----------------- --------- -----
<S> <C> <C> <C> <C>
</TABLE>
Copyright/Mask Work Pending Registration Applications
-----------------------------------------------------
<TABLE>
<CAPTION>
Grantor Serial No. Filing Date Author(s) Title
- ------- ---------- ----------- --------- -----
<S> <C> <C> <C> <C>
</TABLE>
Item B. Copyright/Mask Work Licenses
<TABLE>
<CAPTION>
Effective Expiration Subject
Grantor Licensor Licensee Registration No. Date Date Matter
- ------- -------- -------- ---------------- --------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
- 30 -
<PAGE> 31
SCHEDULE V
TO SECURITY AGREEMENT
Item A. Patents
<TABLE>
<CAPTION>
Issued Patents
--------------
Grantor Patent No. Issue Date Inventor(s) Title
- ------- ---------- ---------- ----------- -----
<S> <C> <C> <C> <C>
</TABLE>
Pending Patent Applications
---------------------------
<TABLE>
<CAPTION>
Grantor Serial No. Filing Date Inventor(s) Title
- ------- ---------- ----------- ----------- -----
<S> <C> <C> <C> <C>
</TABLE>
Item B. Patent Licenses
<TABLE>
<CAPTION>
Effective Expiration Subject
Grantor Licensor Licensee Patent No. Date Date Matter
- ------- -------- -------- ---------- --------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
- 31 -
<PAGE> 32
SCHEDULE VI
TO SECURITY AGREEMENT
Item A. Trademarks
Registered Trademarks
---------------------
<TABLE>
<CAPTION>
Grantor Trademark Registration No. Registration Date
- ------- --------- ---------------- -----------------
<S> <C> <C> <C>
</TABLE>
Pending Trademark Applications
------------------------------
<TABLE>
<CAPTION>
Grantor Trademark Serial No. Filing Date
- ------- --------- ---------- -----------
<S> <C> <C> <C>
</TABLE>
Item B. Trademark Licenses
<TABLE>
<CAPTION>
Effective Expiration
Grantor Trademark Licensor Licensee Registration No. Date Date
- ------- --------- -------- -------- ---------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
- 32 -
<PAGE> 33
SCHEDULE VII
TO SECURITY AGREEMENT
Trade Secret or Know-How Licenses
---------------------------------
<TABLE>
<CAPTION>
Effective Expiration Subject
Grantor Licensor Licensee Date Date Matter
- ------- -------- -------- ---- ---- ------
<S> <C> <C> <C> <C> <C>
</TABLE>
- 33 -
<PAGE> 34
SCHEDULE VIII
TO SECURITY AGREEMENT
Deposit Accounts
----------------
<TABLE>
<CAPTION>
Account
Grantor Bank Address of Bank Type of Account Number
- ------- ---- --------------- --------------- ------
<S> <C> <C> <C> <C>
</TABLE>
- 34 -
<PAGE> 35
ANNEX 1 TO
SECURITY AGREEMENT
SUPPLEMENT NO. dated as of , to
the Security Agreement dated as of March 31, 1998 (the
"Security Agreement"), among EVENFLO & SPALDING HOLDINGS
CORPORATION, a Delaware corporation (the "Borrower"), each of
the Subsidiaries (such term and each other capitalized term
used but not defined herein having the meaning given it in the
Security Agreement) and BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION ("BofA"), as administrative agent (in such
capacity, the "Administrative Agent") for the Secured Parties.
A. Reference is made to the Credit Agreement, dated as of
September 30, 1996 (as amended by the First Amendment to Credit Agreement,
dated as of December 11, 1996, and as the same may be otherwise amended,
amended and restated, supplemented or modified from time to time, the "Credit
Agreement"), among the Borrower, the Lenders, the Documentation Agent,
Syndication Agent, the several financial institutions specifically identified
as Co-Agents on the signature pages thereof and the Administrative Agent.
B. The Grantors have entered into the Security Agreement in
order to induce the Lenders to make additional Credit Extensions and as
consideration for Credit Extensions previously made pursuant to, and upon the
terms and subject to the conditions specified in, the Credit Agreement.
Pursuant to the Credit Agreement, each Subsidiary that was not in existence or
not a Subsidiary on the date thereof is required to enter into the Security
Agreement as a Grantor upon becoming a Subsidiary. Section 26 of the Security
Agreement provides that additional Subsidiaries may become Grantors under the
Security Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned (the "New Grantor") is a Subsidiary of the
Borrower and is executing this Supplement in accordance with the requirements
of the Credit Agreement to become a Grantor under the Security Agreement in
order to induce the Lenders to make additional Credit Extensions and as
consideration for Credit Extensions previously made.
Accordingly, the Administrative Agent and the New Grantor
agree as follows:
SECTION 1. In accordance with Section 26 of the Security
Agreement, the New Grantor by its signature below becomes a Grantor under the
Security Agreement with the same force and effect as if originally named
therein as a Grantor and the New Grantor hereby agrees to all the terms and
provisions of the Security Agreement applicable to it as a Grantor thereunder.
Each reference to a "Grantor" in the Security Agreement shall be deemed to
include the New Grantor. The Security Agreement is hereby incorporated herein
by reference.
SECTION 2. The New Grantor represents and warrants to the
Secured Parties that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to the effects of
applicable bankruptcy, insolvency or similar laws effecting creditors' rights
generally and equitable principles of general applicability.
<PAGE> 36
SECTION 3. This Supplement may be executed in two or
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument. This Supplement shall
become effective when the Administrative Agent shall have received counterparts
of this Supplement that, when taken together, bear the signatures of the New
Grantor and the Administrative Agent.
SECTION 4. Except as expressly supplemented hereby, the
Security Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable
in any respect, neither party hereto shall be required to comply with such
provision for so long as such provision is held to be invalid, illegal or
unenforceable, but the validity, legality and enforceability of the remaining
provisions contained herein and in the Security Agreement shall not in any way
be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be
in writing and given as provided in the Security Agreement. All communications
and notices hereunder to the New Grantor shall be given to it at the address
set forth under its signature, with a copy to the Borrower.
IN WITNESS WHEREOF, the New Grantor and the Administrative Agent have
duly executed this Supplement to the Security Agreement as of the day and year
first above written.
[NAME OF NEW GRANTOR]
By: ______________________________
Name:
Title:
Address: __________________________
__________________________
Fax No.: __________________________
Attention:_________________________
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<PAGE> 37
BANK OF AMERICA NATIONAL SAVINGS
& TRUST ASSOCIATION, as
Administrative Agent
By: ______________________________
Name:
Title:
Address:__________________________
__________________________
Fax No.: _________________________
Attention:________________________
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<PAGE> 1
[EXECUTION COPY]
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March 30, 1998, by EVENFLO & SPALDING
HOLDINGS CORPORATION, a Delaware corporation ("Holdings"), SPALDING & EVENFLO
COMPANIES, INC., a Delaware corporation (the "Borrower"), the undersigned
Subsidiaries of the Borrower (each a "Subsidiary Pledgor" and collectively, the
"Subsidiary Pledgors") and each other Person which may from time to time
hereafter become a party hereto pursuant to Section 16 (each an "Additional
Pledgor" and collectively, the "Additional Pledgors", and, together with;
Holdings, the Borrower and the Subsidiary Pledgors, collectively, the
"Pledgors"), in favor of BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION
("BofA"), as administrative agent (in such capacity, the "Administrative
Agent") for the lenders (the "Lenders") from time to time parties to the
Liquidity Facility dated as of March 30, 1998 (as the same may be amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Liquidity Facility"), among the Borrower, Holdings, as a guarantor, the
Lenders, Merrill Lynch Capital Corporation, as documentation agent (in such
capacity, the "Documentation Agent") for the Lenders, NationsBank N.A. South,
as syndication agent (in such capacity, the "Syndication Agent") and the
Administrative Agent, for the ratable benefit of the Secured Creditors (as
defined below).
W I T N E S S E T H:
WHEREAS, pursuant to the Liquidity Facility, the Lenders have
severally agreed to make Loans (such capitalized term, and other capitalized
terms used in these recitals, to have the meanings set forth, or defined by
reference, in Section 1) to the Borrower upon the terms of and subject to the
conditions set forth therein (such Lenders, together with the Administrative
Agent, the Documentation Agent and the Syndication Agent, being referred to
herein as the "Secured Creditors");
WHEREAS, Holdings, the Administrative Agent, the Documentation Agent,
the Syndication Agent and certain of the Lenders are parties to that certain
Credit Agreement, dated as of September 30, 1996 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Holdings
Credit Agreement");
WHEREAS, (a) Holdings owns 100% of the capital stock of the Borrower,
(b) each Subsidiary Pledgor is a Subsidiary of the Borrower and (c) Holdings
and each Subsidiary Pledgor has, pursuant to the Guaranty, guaranteed to the
Administrative Agent, for the ratable benefit of the Secured Creditors and
their respective successors, endorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations;
WHEREAS, the proceeds of the Loans will be used in part to enable the
Borrower to make valuable transfers to the Subsidiary Pledgors in connection
with the operation of their respective businesses;
<PAGE> 2
WHEREAS, Holdings, the Borrower and the Subsidiary Pledgors are
engaged in related businesses, and each Pledgor will derive substantial direct
and indirect benefit from the making of the Loans;
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Liquidity Facility
that each Pledgor shall have executed and delivered this Pledge Agreement to
the Administrative Agent for the ratable benefit of the Secured Creditors; and
WHEREAS, each Pledgor is the legal and beneficial owner of the shares
of stock (the "Pledged Shares") described on Schedule I hereto and attributed
to such Pledgor (as the same may be supplemented from time to time in
accordance with the requirements of the Liquidity Facility) and issued by the
corporations named therein, which Pledged Shares constitute the percentage of
all the issued and outstanding shares of capital stock of such corporations
identified on such Schedule I;
NOW, THEREFORE, in consideration of the premises and to induce the
Secured Creditors to enter into the Liquidity Facility with the Borrower, each
Pledgor hereby agrees with the Administrative Agent, for the ratable benefit of
the Secured Creditors, as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined
in the Liquidity Facility and used herein shall have the meanings given to them
in the Liquidity Facility.
(b) "Holdings Creditors" is defined in the definition of "Holdings
Pledge Agreement".
(c) "Holdings Pledge Agreement" means the Pledge Agreement, dated as
of September 30, 1996 (as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time), entered into by Holdings
in favor of BofA, as administrative agent under, and for the ratable benefit
of, the administrative agent, the documentation agent, the syndication agent,
the swing line lender, the fronting lender and the other lenders (the foregoing
parties, collectively, the "Holdings Creditors"), in each case, parties to, the
Holdings Credit Agreement.
(d) "Obligations" means, collectively, the unpaid principal of and
interest on the Loans and all other obligations and liabilities of the Borrower
to the Administrative Agent or any Lender (including interest accruing at the
then-applicable rate provided in the Liquidity Facility after the maturity of
the Loans and interest accruing at the then-applicable rate provided in the
Liquidity Facility after, or which would have accrued but for, the filing or
commencement of, or which would have accrued but for the filing or commencement
of, any Insolvency Proceeding, relating to the Borrower, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding),
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter incurred, that may arise under, out of, or in connection
with, the Liquidity Facility, the other Loan Documents or any other document
made, delivered or given in connection therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including all reasonable fees and other charges of
counsel to the Administrative Agent or to the Lenders that are required to be
paid by Holdings, the Borrower or any Subsidiary Pledgor pursuant to the terms
of the Liquidity Facility or any other Loan Document) and all obligations of
each Obligor (other than the Borrower) now or hereafter existing under this
Pledge Agreement and each other Loan Document to which it is or may become a
party.
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<PAGE> 3
(e) "Pledge Agreement" means this Pledge Agreement, as amended,
amended and restated, supplemented or otherwise modified from time to time.
(f) "Pledged Note Issuer" means each Person identified on Schedule
II hereto as the issuer of the Pledged Note identified opposite the name of
such Person.
(g) "Pledged Notes" means all promissory notes of any Pledged Note
Issuer in the form or substantially the form of Exhibit A hereto which are
delivered by each Pledgor to the Administrative Agent as Pledged Property
hereunder, as such promissory notes, in accordance with Section 8, are amended,
supplemented, restated or otherwise modified from time to time together with
any promissory note of any Pledged Note Issuer taken in extension or renewal
thereof or substitution therefor.
(h) "Pledged Property" means all Pledged Shares, all Pledged Notes,
and all other pledged shares of capital stock or promissory notes, all other
securities, all assignments of any amounts due or to become due with respect
thereto, all other instruments which are now being delivered by the Pledgor to
the Administrative Agent or may from time to time hereafter be delivered by the
Pledgor to the Administrative Agent for the purpose of pledge under this Pledge
Agreement or any other Loan Document, and all proceeds of any of the foregoing.
(i) "Shared Collateral" means the capital stock of the Borrower (and
proceeds thereof) pledged by Holdings (i) hereunder to the Administrative Agent
on behalf of the Secured Creditors and (ii) pursuant to the Holdings Pledge
Agreement.
(j) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Pledge Agreement shall refer to this Pledge Agreement
as a whole and not to any particular provision of this Pledge Agreement, and
Section references are to Sections of this Pledge Agreement unless otherwise
specified. The word "including" is not limiting and means "including without
limitation".
(k) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Grant of Security. Each Pledgor hereby assigns, pledges and
transfers to the Administrative Agent for the ratable benefit of the Secured
Creditors, and hereby grants to the Administrative Agent for the ratable
benefit of the Secured Creditors, a security interest in, the following,
whether now owned or existing or hereafter acquired or existing (collectively,
the "Collateral"):
(a) all promissory notes of each Pledged Note Issuer identified in
Schedule II;
(b) all other Pledged Notes issued from time to time;
(c) the Pledged Shares and the certificates representing the Pledged
Shares, any other issued and outstanding shares of the "issuers" listed on
Schedule I, and any interest of such Pledgor in the entries on the books of any
financial intermediary pertaining to the Pledged Shares or any such other
shares, and all dividends, cash, warrants, rights, instruments and other
property or proceeds from time to time received,
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<PAGE> 4
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Shares and any such other shares; and
(d) to the extent not covered by clause (a) above, all proceeds of
any or all of the foregoing Collateral. For purposes of this Pledge Agreement,
the term "proceeds" includes whatever is receivable or received when Collateral
or proceeds are sold, exchanged, collected or otherwise disposed of, whether
such disposition is voluntary or involuntary, and includes, without limitation,
proceeds of any indemnity or guaranty payable to such Pledgor or the
Administrative Agent from time to time with respect to any of the Collateral.
3. Security for Obligations. This Pledge Agreement secures the
payment of all Obligations. Without limiting the generality of the foregoing,
this Pledge Agreement secures the payment of all amounts that constitute part
of the Obligations and would be owed by the Obligors to the Administrative
Agent or the Secured Creditors under the Loan Documents but for the fact that
they are unenforceable or not allowable due to the existence of an Insolvency
Proceeding involving any such Obligor.
4. Delivery of the Collateral. All certificates or instruments, if
any, representing or evidencing the Collateral (other than the Shared
Collateral), including all Pledged Notes, shall be delivered to and held by or
on behalf of (and in the case of the Pledged Notes, endorsed to the order of)
the Administrative Agent pursuant hereto, as to Collateral existing on the date
hereof, on the date hereof and, as to Collateral coming into existence after
the date hereof, promptly following the creation thereof, and, in each case,
shall be in suitable form for transfer by delivery, or shall be accompanied by
duly executed undated instruments of transfer or assignment in blank, all in
form and substance reasonably satisfactory to the Administrative Agent. The
Administrative Agent shall have the right, at any time after the occurrence and
during the continuance of an Event of Default and without notice to any
Pledgor, to transfer to or to register in the name of the Administrative Agent
or any of its nominees any or all of the Pledged Shares.
5. Representations and Warranties. Each Pledgor hereby represents
and warrants to each Secured Creditor as follows:
(i) The Pledged Shares set forth on Schedule I hereto represent on
the date hereof the percentage of all the issued and outstanding capital stock
of the Borrower and of each direct Material Subsidiary of the Borrower as
identified on such Schedule I.
(ii) Each of the Pledgors is the legal and beneficial owner of the
Collateral, as indicated on Schedule I, pledged or assigned by such Pledgor
hereunder free and clear of any Lien, except for the Lien and security interest
(A) created by this Pledge Agreement, (B) as to the Shared Collateral only,
created by the Holdings Pledge Agreement, or (C) Liens permitted under Section
8.
(iii) As of the date of this Pledge Agreement, the Pledged Shares
pledged by each Pledgor hereunder have been duly authorized and validly issued
and are fully paid and non-assessable.
(iv) As of the date of this Pledge Agreement, no Pledged Share is
uncertificated.
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<PAGE> 5
(v) The execution and delivery by the Pledgors of this Pledge
Agreement and the pledge of the Collateral pledged by such Pledgors hereunder
pursuant hereto create a valid and perfected first priority security interest
and security entitlement in the Collateral (other than the Shared Collateral)
in favor of the Administrative Agent, on behalf of the Secured Creditors,
securing the payment of the Obligations. As to the Shared Collateral only, the
execution and delivery by Holdings of this Pledge Agreement and the pledge of
the Shared Collateral by Holdings hereunder create a valid and perfected first
priority, pari passu, security interest and security entitlement in the Shared
Collateral (equal in priority to the Lien created pursuant to the Holdings
Pledge Agreement and subject to no other Liens) in favor of the Administrative
Agent, on behalf of the Secured Creditors, securing the payment of the
Obligations.
(vi) In the case of each Pledged Note, all of such Pledged Notes
have been duly authorized, executed, endorsed, issued and delivered, and are
the legal, valid and binding obligation of the issuers thereof, and are not in
default.
(vii) Each Pledgor has full power, authority and legal right to
pledge all the Collateral pledged by such Pledgor pursuant to this Pledge
Agreement and such Pledgor will defend its and the Administrative Agent's title
or interest thereto or therein (and in the proceeds thereof) against any and
all Liens (other than (A) the Lien of this Pledge Agreement, (B) as to the
Shared Collateral only, the first priority, pari passu, Lien granted by
Holdings pursuant to the Holdings Pledge Agreement and (C) as to the Collateral
other than the Shared Collateral, the second priority Lien granted pursuant to
the Holdings Pledge Agreement), however arising, and all persons whomsoever.
(viii) Each of Holdings and the Borrower has furnished to the
Administrative Agent true and complete copies as of the date hereof of the
charter and/or other organizational documents of, and the bylaws of, in the
case of Holdings, the Borrower, and in the case of the Borrower, each
Subsidiary any of the shares of capital stock of which constitute Pledged
Shares, and neither Holdings nor the Borrower is a party as of the date hereof
to any shareholder agreement or other arrangement affecting the voting rights
of any capital stock of the Borrower or any such Subsidiary.
6. Further Assurances. Each Pledgor agrees that (a) at any time and
from time to time, at the expense of such Pledgor, it will promptly execute and
deliver all further instruments and documents, and take all further action that
may be necessary, or that the Administrative Agent may reasonably request, in
order to perfect and protect any pledge, assignment or security interest
granted or purported to be granted hereby or to enable the Administrative Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral and (b) at any time when any Pledged Shares shall become
uncertificated, the Pledgors and the Administrative Agent shall enter into good
faith negotiations to effectuate the provisions of Article 8 of the UCC such
that the Administrative Agent's first priority, in the case of the Collateral
other than the Shared Collateral, and first priority, pari passu, in the case
of the Shared Collateral only, security interests granted hereunder shall be
maintained. The Borrower agrees to notify the Administrative Agent in writing
on a monthly basis, such notice to be delivered concurrently with the reports
delivered by the Borrower to the Administrative Agent in accordance with
Section 7.1(c) of the Holdings Credit Agreement, as incorporated by reference
in the Liquidity Facility pursuant to Article VII thereof, of the amounts of
intercompany indebtedness owing to the Borrower and the identity of each
Subsidiary obligated to repay the same.
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<PAGE> 6
7. Voting Rights; Dividends and Distributions; Etc. (a) So long as
no Event of Default shall have occurred and be continuing:
(i) The Pledgors shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral (as applicable)
or any part thereof for any purpose not prohibited by the terms of this Pledge
Agreement or the other Loan Documents.
(ii) The Administrative Agent shall execute and deliver (or
cause to be executed and delivered) to any Pledgor (at such Pledgor's expense)
all such proxies and other instruments as such Pledgor may reasonably request
for the purpose of enabling such Pledgor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i) above.
(b) Subject to paragraph (c) below, each Pledgor shall be entitled to
receive and retain and use, free and clear of the Lien of this Pledge
Agreement, any and all dividends, distributions and interest paid in respect of
the Collateral (as applicable); provided, however, that any and all dividends
and other distributions in equity securities included in the Collateral shall
be, and shall be forthwith delivered to the Administrative Agent to hold as,
Collateral and shall, if received by a Pledgor, be received in trust for the
benefit of the Administrative Agent, be segregated from the other property or
funds of such Pledgor and be forthwith delivered to the Administrative Agent as
Collateral in the same form as so received (with any necessary endorsement).
(c) Upon written notice to any Pledgor by the Administrative Agent
following the occurrence and during the continuance of an Event of Default:
(i) all rights of such Pledgor to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall cease, and all such
rights shall thereupon become vested in the Administrative Agent, which shall
thereupon have the sole right to exercise or refrain from exercising such
voting and other consensual rights during the continuance of such Event of
Default;
(ii) all rights of such Pledgor to receive the dividends,
distributions, principal and interest payments that such Pledgor would
otherwise be authorized to receive and retain pursuant to Section 7(b) shall
cease, and all such rights shall thereupon become vested in the Administrative
Agent, which shall thereupon have the sole right to receive and hold as
Collateral such dividends and interest payments during the continuance of such
Event of Default;
(iii) all dividends, principal and interest payments that are
received by such Pledgor contrary to the provisions of Section 7(b) shall be
received in trust for the benefit of the Administrative Agent, shall be
segregated from other funds of such Pledgor and shall forthwith be paid over to
the Administrative Agent as Collateral in the same form as so received (with
any necessary endorsements); and
(iv) in order to permit the Administrative Agent to receive
all dividends and other distributions to which it may be entitled under Section
7(b), to exercise the voting and other consensual rights that it may be
entitled to exercise pursuant to Section 7(c)(i), and to receive all dividends,
distributions, principal and interest payments and other distributions that it
may be entitled to receive
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<PAGE> 7
under Section 7(c)(ii), such Pledgor shall, if necessary, upon written notice
from the Administrative Agent, from time to time execute and deliver to the
Administrative Agent, appropriate proxies, dividend payment orders and other
instruments as the Administrative Agent may reasonably request.
8. Transfers and Other Liens; Additional Collateral; Documents; Etc.
No Pledgor shall:
(a) (i) except as permitted by the Liquidity Facility, sell or
otherwise dispose of, or grant any option or warrant with respect to, any of
the Collateral or (ii) create or suffer to exist any consensual Lien upon or
with respect to any of the Collateral, except for (A) the Lien of this Pledge
Agreement, (B) as to the Shared Collateral only, the first priority, pari
passu, Lien granted by Holdings pursuant to the Holdings Pledge Agreement and
(C) as to the Collateral other than the Shared Collateral, the second priority
Lien granted pursuant to the Holdings Pledge Agreement, provided that in the
event such Pledgor sells or otherwise transfers assets as permitted by the
Liquidity Facility in accordance with the terms of the Liquidity Facility and
such assets are or include Collateral, the Administrative Agent shall (at the
expense of such Pledgor) release such Collateral to such Pledgor free and clear
of the lien and security interest under this Pledge Agreement concurrently with
the consummation of such sale;
(b) (i) except as may be permitted by the Liquidity Facility, cause
any issuer of Pledged Shares pledged by such Pledgor to issue any stock or
other securities in substitution for the Pledged Shares issued by such issuer,
except to such Pledgor, (ii) fail to pledge hereunder, immediately upon the
issuance thereof, any and all additional shares of stock or other securities of
each such issuer of Pledged Shares and (iii) permit the issuance of any
additional shares of stock of such issuer unless permitted by the Liquidity
Facility and, if so permitted, any proceeds thereof required to be applied
under the Liquidity Facility are so applied in accordance therewith or, if any
such additional shares are issued to such Pledgor, such additional shares are
immediately pledged hereunder upon the issuance thereof;
(c) amend, supplement or otherwise modify, or permit the amendment,
supplementation or other modification of, the charter or other organizational
documents or the bylaws of any entity any of the capital stock of which
constitute Pledged Shares of such Pledgor in any respect that would be
materially adverse to the interests or position of the Administrative Agent or
the Secured Creditors hereunder or in connection herewith, nor shall it, nor
shall it permit any entity any of the capital stock of which constitutes
Pledged Shares to, enter into or agree to any shareholder or other agreement
that would be materially adverse to the interests or position of the
Administrative Agent or the Secured Creditors hereunder or in connection
herewith; and
(d) enter into any agreement amending any provision of any Pledged
Note or forgive the obligation of the maker thereof to repay any principal or
interest due and owing thereunder;
provided, however, that notwithstanding any provision to the contrary contained
herein or in any other Loan Document, the Borrower shall, at all times during
the period from the date hereof until the payment in full in cash of the
Obligations and the termination of all Commitments, have pledged to the
Administrative Agent for the ratable benefit of the Secured Creditors pursuant
to the terms of this Pledge Agreement all of the outstanding shares of the
capital stock of each Material Subsidiary of the Borrower, provided that, in
the event such Subsidiary is a Foreign Subsidiary, the Borrower shall not be
required to have so pledged to the Administrative Agent more than 65% of the
outstanding shares of the capital stock of such Subsidiary.
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<PAGE> 8
9. Administrative Agent Appointed Attorney-in-Fact. Each Pledgor
hereby irrevocably appoints the Administrative Agent as such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor
and in the name of such Pledgor or otherwise to take any action and to execute
any instrument, in each case after the occurrence and during the continuance of
an Event of Default, that the Administrative Agent may deem reasonably
necessary or advisable to accomplish the purposes of this Pledge Agreement,
including to receive, endorse and collect all instruments made payable to such
Pledgor representing any dividend, interest payment or other distribution in
respect of the Collateral or any part thereof and to give full discharge for
the same and otherwise to collect on any Collateral or enforce the rights of
the Administrative Agent with respect thereto. Each Pledgor hereby
acknowledges, consents and agrees that this power of attorney is irrevocable
and coupled with an interest.
10. The Administrative Agent's Duties. The powers conferred on the
Administrative Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Collateral in its possession and the
accounting for money actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Shares, whether or not the Administrative
Agent or any Secured Creditor has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Collateral. The
Administrative Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which the Administrative
Agent accords its own property or if the Administrative Agent decides to take
any action for such purpose that has been requested by any Pledgor (it being
understood and agreed that the failure of the Administrative Agent to comply
with any such request at any time shall not in itself be deemed a failure to
exercise reasonable care and that the Administrative Agent is not obligated to
comply with any such request unless otherwise required to do so hereunder or
under the Liquidity Facility).
11. Remedies. If any Event of Default shall have occurred and be
continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured creditor
upon default under the Uniform Commercial Code in effect in the State of New
York at such time (the "UCC") and also may without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any exchange broker's board or at any of the Administrative
Agent's offices or elsewhere, for cash, on credit or for future delivery, at
such price or prices and upon such other terms as are commercially reasonable
irrespective of the impact of any such sales on the market price of the
Collateral. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of any Pledgor, and each
Pledgor hereby waives (to the extent permitted by law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Each Pledgor agrees that, to the extent notice of sale shall be required by
law, at least ten (10) days' notice to such Pledgor of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Administrative Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Administrative Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed
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<PAGE> 9
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. To the extent permitted by law, each
Pledgor hereby waives any claim against the Administrative Agent arising by
reason of the fact that the price at which any Collateral may have been sold at
such a private sale was less than the price that might have been obtained at a
public sale, even if the Administrative Agent accepts the first offer received
and does not offer such Collateral to more than one offeree.
(b) Subject to Section 18 hereof, all cash proceeds received by the
Administrative Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied (after
payment of any amounts payable to the Administrative Agent pursuant to Sections
11.4 and 11.5 of the Liquidity Facility) by the Administrative Agent for the
ratable benefit of the Secured Creditors in the following order: first, against
Obligations consisting of unpaid and outstanding interest on the Loans, second,
ratably against Obligations consisting of unpaid and outstanding principal of
the Loans, and third, against any other remaining Obligations. Any surplus of
such cash or cash proceeds held by the Administrative Agent and remaining after
payment in full of all the Obligations (other than indemnities, costs and
expenses that survive termination of a Loan Document but as to which demand for
payment has not then been made) and the termination of all Commitments shall be
paid over to the applicable Pledgor or to any other Person notified in writing
to the Administrative Agent that may be lawfully entitled to receive such
surplus.
(c) The Administrative Agent may exercise any and all rights and
remedies of each Pledgor in respect of the Collateral.
(d) All payments received by any Pledgor after the occurrence and
during the continuance of an Event of Default in respect of the Collateral
shall be received in trust for the benefit of the Administrative Agent, shall
be segregated from other funds of such Pledgor and, upon written notice to such
Pledgor from the Administrative Agent, shall be forthwith paid over to the
Administrative Agent in the same form as so received (with any necessary
endorsement).
(e) Each Pledgor shall remain liable to the extent of any deficiency.
(f) Each Pledgor agrees that in any sale of any of the Collateral in
the exercise of remedies hereunder whenever an Event of Default shall have
occurred and be continuing, the Administrative Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it
may be advised by counsel is reasonably necessary in order to avoid any
violation of applicable law (including compliance with such procedures as may
restrict the number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and restrict
such prospective bidders and purchasers to persons who will represent and agree
that they are purchasing for their own account for investment and not with a
view to the distribution or resale of such Collateral), or in order to obtain
any required approval of the sale or of the purchaser by any governmental
regulatory authority or official, and such Pledgor further agrees that such
compliance shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner, nor shall the Administrative
Agent be liable nor accountable to such Pledgor for any discount allowed by
reason of the fact that such Collateral is sold in compliance with any such
limitation or restriction.
-9-
<PAGE> 10
12. Amendments, etc. with Respect to the Obligations; Waiver of
Rights. Each Pledgor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against such Pledgor and without notice to or
further assent by such Pledgor, any demand for payment of any of the
Obligations made by the Administrative Agent or any Secured Creditor may be
rescinded by such party and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any Secured Creditor, and the Liquidity
Facility and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Majority
Lenders under the terms of the Liquidity Facility, as the case may be) may deem
advisable from time to time (in accordance with the Liquidity Facility), and
any collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Secured Creditor for the payment of the Obligations
may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Secured Creditor shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Obligations or for this Pledge Agreement or any property subject
thereto. When making any demand hereunder against any Pledgor, the
Administrative Agent or any Secured Creditor may, but shall be under no
obligation to, make a similar demand on any other pledgor, or any other
provider of collateral or guarantor, and any failure by the Administrative
Agent or any Secured Creditor to make any such demand or to collect any
payments from such Pledgor or any other pledgor, provider of collateral or
guarantor, and any release of such Pledgor or any other pledgor, provider of
collateral or guarantor shall not relieve such Pledgor of its 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
Secured Creditor against such Pledgor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
13. Continuing Security Interest, Assignments Under the Liquidity
Facility. This Pledge Agreement shall create a continuing security interest in
the Collateral and shall (a) unless the Pledgors and the Administrative Agent
otherwise agree, remain in full force and effect until the payment in full in
cash of the Obligations (other than indemnities, costs and expenses that
survive termination of a Loan Document but as to which demand for payment has
not then been made) and the termination of all Commitments, notwithstanding
that from time to time prior thereto the Pledgors may be free from any
Obligations, (b) be binding upon each Pledgor, its successors and assigns and
(c) inure, together with the rights and remedies of the Administrative Agent
hereunder, to the benefit of the Administrative Agent, the Secured Creditors
and their respective successors, transferees and assigns.
Without limiting the foregoing clause (c), any Secured Creditor may assign or
otherwise transfer (in whole or in part) any Note, Loan or other Obligation
held by it to any other Person, and such other Person shall thereupon become
vested with all the rights and benefits in respect thereof granted to such
Secured Creditor under any Loan Document (including this Pledge Agreement) or
otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the provisions of Section 11.8 and Article X of the Liquidity
Facility.
14. Reinstatement. This Pledge Agreement 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
-10-
<PAGE> 11
otherwise be restored or returned by the Administrative Agent or any Secured
Creditor upon the filing or commencement of any Insolvency Proceeding in
respect of any Pledgor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, such
Pledgor or any substantial part of its property, or otherwise, all as though
such payments had not been made.
15. Notices. All notices, requests and demands to or upon the
Secured Creditors or the Pledgors under this Pledge Agreement shall be given or
made in accordance with Section 11.2 of the Liquidity Facility and addressed as
follows:
(a) if to any Pledgor other than the Borrower, in care of the
Borrower in accordance with Section 11.2 of the Liquidity Facility
(b) if to the Borrower, in accordance with Section
11.2 of the Liquidity Facility; and
(c) if to any Secured Creditor, in accordance with Section
11.2 of the Liquidity Facility.
16. Additional Pledgors. Upon the execution and delivery by any
other Person of an instrument in the form of Annex 1 hereto, such Person shall
become a "Pledgor" hereunder with the same force and effect as if originally
named as a Pledgor herein. The execution and delivery of any such instrument
shall not require the consent of any other Pledgor hereunder. The rights and
obligations of each Pledgor hereunder shall remain in full force and effect
notwithstanding the addition of any new Pledgor as a party to this Pledge
Agreement.
17. Foreign Pledgor Supplements. This Pledge Agreement may be
supplemented from time to time by Foreign Subsidiary Pledge Supplements as to
pledges of capital stock of Foreign Subsidiaries which supplements shall make
express reference to this Pledge Agreement.
18. Intercreditor Arrangements. For perfection purposes only, the
Administrative Agent shall be deemed to be holding the Collateral (other than
the Shared Collateral) hereunder on behalf of the Secured Creditors on a first
priority basis and on behalf of the Holdings Creditors on a second priority
basis. In furtherance of the foregoing, the Administrative Agent shall be
deemed to have all the benefits of appointment, authorization, exculpation and
indemnity provided to the administrative agent under the Holdings Credit
Agreement mutatis mutandis.
19. Counterparts. This Pledge Agreement may be executed by the
Pledgors and the Administrative Agent on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. A set of the counterparts of this Pledge Agreement
signed by the Pledgors and the Administrative Agent shall be lodged with the
Administrative Agent, Holdings and the Borrower.
20. Severability. Any provision of this Pledge Agreement that 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.
-11-
<PAGE> 12
21. Integration; Loan Document. This Pledge Agreement represents the
entire agreement of the Pledgors and the Administrative Agent with respect to
the subject matter hereof and there are no agreements relative to the subject
matter hereof not reflected herein or, to the extent expressly referred to
herein, in the other Loan Documents. This Pledge Agreement is a Loan Document
executed pursuant to the Liquidity Facility and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions of the Liquidity Facility.
22. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None
of the terms or provisions of this Pledge Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Pledgor and the Administrative Agent in accordance with Section 11.1 of
the Liquidity Facility.
(b) Neither the Administrative Agent nor any Secured Creditor shall by
any act (except by a written instrument pursuant to Section 22(a)), 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, nor
any delay in exercising, on the part of the Administrative Agent or any Secured
Creditor, 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 Secured Creditor of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Administrative
Agent or such Secured Creditor would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
23. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS PLEDGE AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE,
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
23.
24. Jurisdiction; Consent to Service of Process. (a) Each Pledgor
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
this Pledge Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in
-12-
<PAGE> 13
such federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Pledge Agreement shall affect any right that any Pledgor or any
Secured Creditor may otherwise have to bring any action or proceeding relating
to this Pledge Agreement or the other Loan Documents against any Pledgor or any
Secured Creditor or its properties in the courts of any jurisdiction.
(b) Each Pledgor and each Secured Creditor hereby irrevocably
and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Pledge Agreement or the other Loan Documents in any New York State or
federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Pledge Agreement irrevocably consents
to service of process in the manner provided for notices in Section 15.
Nothing in this Pledge Agreement will affect the right of any party to this
Pledge Agreement to serve process in any other manner permitted by law.
25. Section Headings. The Section 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.
26. Successors and Assigns. 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 Secured Creditors and their successors and
assigns, except no Pledgor may assign, transfer or delegate any of its rights
or obligations under this Pledge Agreement without the prior written consent of
the Administrative Agent.
27. Protection of Collateral. The Administrative Agent may from time
to time take any action which the Administrative Agent reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein, and at any time after and
during the continuance of an Event of Default, the Administrative Agent may
from time to time, at its option and at the expense of the applicable Pledgor,
perform any act which such Pledgor agrees hereunder to perform and which such
Pledgor shall fail to perform.
28. GOVERNING LAW. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-13-
<PAGE> 14
IN WITNESS WHEREOF, each of the undersigned has caused this Pledge
Agreement to be duly executed and delivered by its duly authorized officer as
of the day and year first above written.
EVENFLO & SPALDING HOLDINGS
CORPORATION
SPALDING & EVENFLO COMPANIES, INC.
EVENFLO COMPANY, INC.
ETONIC WORLDWIDE CORPORATION
LISCO, INC.
S&E FINANCE CO., INC.
SPALDING SPORTS CENTERS, INC.
ETONIC LISCO, INC.
LISCO FURNITURE, INC.
LISCO FEEDING, INC.
LISCO SPORTS, INC.
By: ______________________________
Name:
Title:
S&E FINANCE CO., INC.
By: ______________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
as Administrative Agent
By: ______________________________
Name:
Title:
<PAGE> 15
ACKNOWLEDGED AND AGREED:
BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION,
as Administrative Agent under the
Holdings Credit Agreement, on behalf of
the lenders thereunder
By: ______________________________
Name:
Title:
<PAGE> 16
SCHEDULE I
TO THE PLEDGE AGREEMENT
PLEDGED SHARES
<TABLE>
<CAPTION>
Percentage
Stock of
Class of Certificate Number of Outstanding
Pledgor Issuer Stock/Par Value No(s) Shares Shares
------ ------ --------------- ----- ------ ------
<S> <C> <C> <C> <C> <C>
Evenflo & Spalding Holdings Spalding & Evenflo Companies, Common C 2 190,000 100%
Corporation Inc. Stock/$1.00
Spalding & Evenflo
Companies, Inc.
[SUBSIDIARIES]
</TABLE>
<PAGE> 17
SCHEDULE II
TO THE PLEDGE AGREEMENT
PLEDGED NOTES
<TABLE>
<CAPTION>
Pledged Note Issuer Description
- ------------------- -----------
<S> <C>
</TABLE>
<PAGE> 18
ANNEX 1 TO
PLEDGE AGREEMENT
SUPPLEMENT NO. dated as of , to
the Pledge Agreement dated as of March 30, 1998 (the "Pledge
Agreement"), among EVENFLO & SPALDING HOLDINGS CORPORATION, a
Delaware corporation ("Holdings"), SPALDING & EVENFLO
COMPANIES, INC., a Delaware corporation (the "Borrower"), each
of the Subsidiaries (such term and each other capitalized term
used but not defined herein having the meaning given it in the
Pledge Agreement) and BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION, as administrative agent (in such capacity, the
"Administrative Agent") for the Secured Creditors.
A. Reference is made to the Liquidity Facility, dated as of
March 30, 1998 (as amended, amended and restated or otherwise modified from
time to time, the "Liquidity Facility"), among the Borrower, the Lenders, the
Administrative Agent, the Documentation Agent and the Syndication Agent.
B. The Pledgors have entered into the Pledge Agreement in
order to induce the Lenders to make Loans pursuant to, and upon the terms and
subject to the conditions specified in, the Liquidity Facility. Pursuant to
the Liquidity Facility, each Material Subsidiary that was not in existence or
not a Material Subsidiary on the date thereof is required to enter into the
Pledge Agreement as a Pledgor upon becoming a Material Subsidiary. Section 16
of the Pledge Agreement provides that additional Persons may become Pledgors
under the Pledge Agreement by execution and delivery of an instrument in the
form of this Supplement. The undersigned (the "New Pledgor") is a Material
Subsidiary of the Borrower and is executing this Supplement in accordance with
the requirements of the Liquidity Facility to become a Pledgor under the Pledge
Agreement in order to induce the Lenders to make additional Loans and as
consideration for Loans previously made.
Accordingly, the Administrative Agent and the New Pledgor
agree as follows:
SECTION 1. In accordance with Section 16 of the Pledge
Agreement, the New Pledgor by its signature below becomes a Pledgor under the
Pledge Agreement with the same force and effect as if originally named therein
as a Pledgor and the New Pledgor hereby agrees to all the terms and provisions
of the Pledge Agreement applicable to it as a Pledgor thereunder. Each
reference to a "Pledgor" in the Pledge Agreement shall be deemed to include the
New Pledgor. The Pledge Agreement is hereby incorporated herein by reference.
SECTION 2. The New Pledgor represents and warrants to the
Secured Creditors that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to the effects of
applicable bankruptcy, insolvency or similar laws effecting creditors' rights
generally and equitable principles of general applicability.
SECTION 3. This Supplement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one
<PAGE> 19
instrument. This Supplement shall become effective when the Administrative
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Pledgor and the Administrative Agent.
SECTION 4. Except as expressly supplemented hereby, the
Pledge Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable
in any respect, neither party hereto shall be required to comply with such
provision for so long as such provision is held to be invalid, illegal or
unenforceable, but the validity, legality and enforceability of the remaining
provisions contained herein and in the Pledge Agreement shall not in any way be
affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be
in writing and given as provided in the Pledge Agreement. All communications
and notices hereunder to the New Pledgor shall be given to it at the address
set forth under its signature, with a copy to the Borrower.
IN WITNESS WHEREOF, the New Pledgor and the Administrative Agent have
duly executed this Supplement to the Pledge Agreement as of the day and year
first above written.
[NAME OF NEW PLEDGOR]
By: ______________________________
Name:
Title:
Address: _________________________
_________________________
Fax No.: _________________________
Attention:_________________________
-3-
<PAGE> 20
BANK OF AMERICA NATIONAL SAVINGS &
TRUST ASSOCIATION, as
Administrative Agent
By: ______________________________
Name:
Title:
Address: _________________________
_________________________
Fax No.: _________________________
Attention:_________________________
-4-
<PAGE> 21
EXHIBIT A
TO PLEDGE AGREEMENT
PROMISSORY NOTE
_________________, 19__
FOR VALUE RECEIVED, the undersigned, ______________, a
_______________ corporation (the "Maker"), promises to pay to the order of
SPALDING & EVENFLO COMPANIES, INC., a Delaware corporation (the "Payee"), on
DEMAND, advances made from time to time pursuant to intercompany loans made by
the Payee to the Maker.
The unpaid principal amount of this promissory note (this "Note")
from time to time outstanding shall bear interest at a rate of interest
determined by the Payee from time to time, which the Maker represents to be a
lawful and commercially reasonable rate, payable quarterly, and all payments of
principal of and interest on this Note shall be payable in lawful currency of
the United States of America. All such payments shall be made by the Maker to
an account established by the Payee and notified to the Maker and shall be
recorded on the grid attached hereto by the holder hereof (including the
Administrative Agent as pledgee). Upon notice from the Administrative Agent
(hereinafter defined) that a Default (as defined in the Liquidity Facility,
hereinafter defined) of the nature referred to in Section 9.1(f) or (g) of the
Liquidity Facility or an Event of Default (as defined in the Liquidity
Facility) has occurred and is continuing under the Liquidity Facility, the
Maker shall make such payments, in same day funds, to such other account as the
Administrative Agent shall direct in such notice.
This Note is one of the notes referred to in, and evidences
Indebtedness incurred pursuant to Article VIII of the Liquidity Facility (which
Article incorporates by reference, inter alia, clause (c) of Section 8.4 of the
Holdings Credit Agreement, as incorporated by reference in the Liquidity
Facility pursuant to Article VIII thereof. Upon the occurrence and continuance
of an Event of Default under the Liquidity Facility, and notice thereof by the
Administrative Agent to the Maker, the Administrative Agent shall have all
rights of the Payee to collect and accelerate, and enforce all rights with
respect to, the Indebtedness evidenced by this Note. Unless otherwise defined
herein or the context otherwise requires, terms used herein have the meanings
provided in the Liquidity Facility.
Reference is made to the Liquidity Facility for a description of the
Pledge Agreement pursuant to which this Note has been pledged to the
Administrative Agent as security for the Obligations outstanding from time to
time under the Liquidity Facility and each other Loan Document.
-1-
<PAGE> 22
In addition to, but not in limitation of, the foregoing, the Maker
further agrees to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the holder (including the Administrative Agent as
pledgee) of this Note endeavoring to collect any amounts payable hereunder which
are not paid when due, whether by acceleration or otherwise.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON
THIS NOTE. THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
[Name of Maker]
By_____________________________
Title:_______________________
Pay to the order of ________________
SPALDING & EVENFLO COMPANIES, INC.
By: __________________________
Title:
-2-
<PAGE> 23
GRID
Intercompany Loans made by Spalding & Evenflo Companies, Inc. to
________________ and payments of principal of such Loans.
<TABLE>
<CAPTION>
Amount of Amount of Outstanding
Intercompany Principal Principal Notation Made
Date Loan Payment Balance By
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
[EXECUTION COPY]
GUARANTY
This GUARANTY, dated as of March 30, 1998, is made by the undersigned
Subsidiaries (each a "Subsidiary Guarantor" and collectively, the "Subsidiary
Guarantors") of Spalding & Evenflo Companies, Inc., a Delaware corporation (the
"Borrower"), and each other Person which may from time to time hereafter become
a party hereto pursuant to Section 13 (each, individually, an "Additional
Guarantor", and, collectively, the "Additional Guarantors", and, together with
the Subsidiary Guarantors, each, individually, a "Guarantor", and,
collectively, the "Guarantors"), in favor of Bank of America National Trust &
Savings Association, as administrative agent (in such capacity, the
"Administrative Agent") for the various financial institutions from time to
time parties (collectively, the "Lenders") to that certain Liquidity Facility,
dated as of March 30, 1998 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Liquidity Facility"), among the
Borrower, Evenflo & Spalding Holdings Corporation, a Delaware corporation, as a
guarantor ("Holdings"), the Lenders, Merrill Lynch Capital Corporation, as
documentation agent (in such capacity, the "Documentation Agent") for the
Lenders, NationsBank N.A. South, as syndication agent (in such capacity, the
"Syndication Agent") and the Administrative Agent, for the ratable benefit of
the Secured Creditors (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to the Liquidity Facility, the Lenders have
severally agreed to make Loans (such capitalized term, and other capitalized
terms used in these recitals, to have the meanings set forth, or defined by
reference in, Section 1) to the Borrower upon the terms and subject to the
conditions set forth therein (such Lenders, together with the Administrative
Agent, the Documentation Agent and the Syndication Agent, being referred to
herein as the "Secured Creditors");
WHEREAS, each Guarantor is a Domestic Subsidiary, in each case, of the
Borrower;
WHEREAS, the proceeds of the Loans will be used in part to enable the
Borrower to make valuable transfers to the Guarantors in connection with the
operation of their respective businesses;
WHEREAS, the Borrower and the Guarantors are engaged in related
businesses, and each Guarantor will derive substantial direct and indirect
benefits from the making of the Loans; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Liquidity Facility
that the Guarantors shall have executed and delivered this Guaranty to the
Administrative Agent for the ratable benefit of the Secured Creditors;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Liquidity Facility and
to induce the Lenders to make their respective Loans to the Borrower under the
Liquidity Facility, the Guarantors hereby agree with the Administrative Agent,
for the ratable benefit of the Secured Creditors, as follows:
<PAGE> 2
1. Defined Terms. (a) Unless otherwise defined herein, terms defined
in the Liquidity Facility and used herein shall have the meanings ascribed to
them in the Liquidity Facility.
(b) As used herein, "Obligations" means, collectively, the unpaid
principal of and interest on the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or any Lender
(including interest accruing at the then-applicable rate provided in the
Liquidity Facility after the maturity of the Loans and interest accruing at the
then-applicable rate provided in the Liquidity Facility after, or which would
have accrued but for, the filing or commencement of, or which would have
accrued but for the filing or commencement of, any Insolvency Proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter incurred, that may arise under, out of, or in connection with, the
Liquidity Facility, the other Loan Documents or any other document made,
delivered or given in connection therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including all reasonable fees and other charges of counsel to the
Administrative Agent or to the Lenders that are required to be paid by
Holdings, the Borrower or any Guarantor pursuant to the terms of the Liquidity
Facility or any other Loan Document) and all obligations of each Obligor (other
than the Borrower) now or hereafter existing under this Guaranty and each other
Loan Document to which it is or may become a party.
(c) "Guaranty" means this Guaranty, as amended, amended and
restated, supplemented or otherwise modified from time to time.
(d) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Guaranty shall refer to this Guaranty as a
whole and not to any particular provision of this Guaranty, and Section
references are to Sections of this Guaranty unless otherwise specified. The
word "including" is not limiting and means "including without limitation".
(e) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Guaranty. (a) Subject to the provisions of Section 2(b), each of
the Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantees to the Administrative Agent, for the ratable benefit of the Secured
Creditors and their respective successors, endorsees, transferees and assigns,
the prompt and complete payment and performance by the Borrower when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under
the other Loan Documents shall in no event exceed the amount that can be
guaranteed by such Guarantor under applicable federal and state laws relating
to the insolvency of debtors.
(c) Each Guarantor further agrees to pay any and all reasonable
expenses (including all reasonable fees and disbursements of counsel) that may
be paid or incurred by the Administrative Agent or any Secured Creditor in
enforcing or obtaining advice of counsel in respect of any rights with respect
to, or collecting, any or all of the Obligations and/or enforcing any rights
with respect to, or collecting against, such Guarantor under this Guaranty.
Unless the Guarantors and the Administrative Agent shall
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<PAGE> 3
otherwise agree, this Guaranty shall remain in full force and effect until the
Obligations are paid in full and the Commitments are terminated,
notwithstanding that from time to time prior thereto the Borrower may be free
from any Obligations.
(d) Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing this Guaranty or affecting the rights and remedies
of the Administrative Agent or any Secured Creditor hereunder.
(e) No payment or payments made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Secured Creditor from the Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder, which shall, notwithstanding any such payment or payments other than
payments made by such Guarantor in respect of the Obligations or payments
received or collected from such Guarantor in respect of the Obligations, remain
liable for the Obligations up to the maximum liability of such Guarantor
hereunder until the Obligations are paid in full and the Commitments are
terminated.
(f) Each Guarantor agrees that whenever, at any time, or from time
to time, it shall make any payment to the Administrative Agent or any Secured
Creditor on account of its liability hereunder, it will notify the
Administrative Agent in writing that such payment is made under this Guaranty
for such purpose.
3. Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of
any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder who has not
paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of Section 5. The
provisions of this Section 3 shall in no respect limit the obligations and
liabilities of any Guarantor to the Administrative Agent and the Secured
Creditors, and each Guarantor shall remain liable to the Administrative Agent
and the Secured Creditors for the full amount guaranteed by such Guarantor
hereunder.
4. Right of Set-off. In addition to any rights and remedies of the
Administrative Agent and each Secured Creditor provided by law, if an Event of
Default exists or the Loans have been accelerated, each Guarantor hereby
irrevocably authorizes the Administrative Agent and each Secured Creditor at
any time and from time to time, without prior notice to such Guarantor, any
such notice being waived by such Guarantor to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by, and other indebtedness,
credits or claims (in each case, in any currency and whether direct or
indirect, absolute or contingent, matured or unmatured) at any time owing by
the Administrative Agent or such Secured Creditor (or any branch or agency
thereof) to or for the credit or the account of such Guarantor against any and
all Obligations then due and payable by such Guarantor hereunder (whether at
the stated maturity, by acceleration or otherwise). Each Secured Creditor
agrees to promptly notify the Guarantor and the Administrative Agent after any
such set-off and application made by such Secured Creditor; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application.
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<PAGE> 4
5. Postponement of Subrogation, etc. Each Guarantor hereby expressly
waives, until the Obligations are paid in full and the Commitments are
terminated, any rights which it may now have or hereafter acquire against the
Borrower or any Guarantor by way of subrogation, reimbursement, contribution or
setoff by virtue of any payment made pursuant to the terms hereof or otherwise
and any claim, right or remedy which such Guarantor may now have or hereafter
acquire against the Borrower or any Guarantor that arises from the existence or
performance by such Guarantor of its obligations hereunder, including any
claim, right or remedy of the Administrative Agent or any Secured Creditor
against the Borrower or any security which the Administrative Agent or any
Secured Creditor now have or hereafter acquire, whether or not such claim,
right or remedy arises in equity, under contract, by statute, under color of
law or otherwise. If any amount shall be paid to any Guarantor on account of
such subrogation, reimbursement, contribution, setoff or other rights at any
time when all the Obligations shall not have been paid in full and all the
Commitments terminated, such amount shall be held by such Guarantor in trust
for the benefit of the Administrative Agent and the Secured Creditors,
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 (after payment of any amounts payable
to the Administrative Agent pursuant to Section 11.4 and 11.5 of the Liquidity
Facility) applied by the Administrative Agent for the ratable benefit of the
Secured Creditors in the following order: first, against Obligations consisting
of unpaid and outstanding interest on the Loans, second, ratably against
Obligations consisting of unpaid and outstanding principal of the Loans, and
third, against any other remaining Obligations. Any surplus of such cash or
cash proceeds held by the Administrative Agent and remaining after payment in
full of all the Obligations (other than indemnities, costs and expenses that
survive termination of a Loan Document but as to which demand for payment has
not then been made) and the termination of all Commitments shall be paid over
to the Borrower or to any other Person notified in writing to the
Administrative Agent that may be lawfully entitled to receive such surplus.
6. Amendments, etc. with Respect to the Obligations; Waiver of
Rights. Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to
or further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Administrative Agent or any Secured Creditor may be
rescinded by such party and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any Secured Creditor, and the Liquidity
Facility and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Majority
Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Secured Creditor for the payment of the Obligations
may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Secured Creditor shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Obligations or for this Guaranty or any property subject thereto. When
making any demand hereunder against any of the Guarantors, the Administrative
Agent or any Secured Creditor may, but shall be under no obligation to, make a
similar demand on the Borrower or any other Guarantor or guarantor, and any
failure by the Administrative Agent or any Secured Creditor to make any such
demand or to collect any payments from the Borrower or any such other Guarantor
or guarantor or any release of the Borrower or
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<PAGE> 5
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 Secured Creditor against any
of the Guarantors. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
7. Guaranty Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent or
any Secured Creditor upon this Guaranty or acceptance of this Guaranty; 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 Guaranty; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Administrative Agent and the Secured
Creditors, on the other hand, likewise shall be conclusively presumed to have
been had or consummated in reliance upon this Guaranty. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the Guarantors with respect to the
Obligations. Each Guarantor understands and agrees that this Guaranty shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the genuineness, legality, validity, regularity or
enforceability of the Liquidity Facility or any other Loan Document, 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 Secured Creditor, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) that may at any
time be available to or be asserted by the Borrower against the Administrative
Agent or any Secured Creditor or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Borrower or such Guarantor) that
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Obligations, or of such Guarantor under this
Guaranty, in bankruptcy or in any other instance. When pursuing its rights and
remedies hereunder against any Guarantor, the Administrative Agent and any
Secured Creditor may, but shall be under no obligation to, pursue such rights
and remedies as it may have against the Borrower 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
Secured Creditor to pursue such other rights or remedies or to collect any
payments from the Borrower 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 Borrower or any such other Person or any such collateral
security, guarantee or right of offset, shall not relieve such Guarantor of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent and the Secured Creditors against such Guarantor. Unless the Guarantors
and the Administrative Agent shall otherwise agree, this Guaranty 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 Secured Creditors, and
their respective successors, endorsees, transferees and assigns, until all the
Obligations and the obligations of each Guarantor under this Guaranty shall
have been satisfied by payment in full and the Commitments are terminated,
notwithstanding that from time to time during the term of the Liquidity
Facility the Borrower may be free from any Obligations; provided, that, upon
the sale or other disposition of any Guarantor hereunder in accordance with the
terms of the Liquidity Facility, such Guarantor shall be automatically released
from all obligations hereunder to the extent that such sale or other
disposition causes such Guarantor to cease being a Domestic Subsidiary of the
Borrower.
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<PAGE> 6
8. Reinstatement. This Guaranty 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 Secured Creditor in connection with
an Insolvency Proceeding of the Borrower or any Guarantor, including upon or as
a result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
9. Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent set forth in
Schedule 11.2 to the Liquidity Facility.
10. Representations and Warranties; Covenants. (a) Each Guarantor
hereby represents and warrants that the representations and warranties set
forth in Article VI of the Liquidity Facility as they relate to such Guarantor
or the Loan Documents, if any, to which such Guarantor is a party, each of
which is hereby incorporated herein by reference, are true and correct, and the
Administrative Agent and each Secured Creditor shall be entitled to rely on
each of them as if they were fully set forth herein.
(b) Each Guarantor hereby covenants and agrees with the
Administrative Agent and each Secured Creditor that, from and after the date of
this Guaranty until the Obligations are paid in full and the Commitments are
terminated, 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 Article VII or
VIII of the Liquidity Facility, and so that no Default or Event of Default, is
caused by any act or failure to act of such Guarantor or any of its
Subsidiaries.
11. Authority of Agent. Each Guarantor acknowledges that the rights
and responsibilities of the Administrative Agent under this Guaranty 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 Guaranty shall, as between the Administrative Agent and the Secured
Creditors, be governed by the Liquidity Facility and by such other agreements
with respect thereto as may exist from time to time among them, but, as between
the Administrative Agent and such Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Creditors with full
and valid authority so to act or refrain from acting, and no Guarantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
12. Notices. All notices, requests and demands pursuant hereto shall
be made in accordance with Section 11.2 of the Liquidity Facility, provided
that any such notice, request or demand to or upon any Guarantor shall be
addressed to such Guarantor in care of the Borrower in accordance with such
Section.
13. Additional Guarantors. Upon the execution and delivery by any
other Person of an instrument in the form of Annex I hereto, such Person shall
become a "Guarantor" hereunder with the same force and effect as if originally
named as a Guarantor herein. The execution and delivery of any such instrument
shall not require the consent of any other Guarantor hereunder. The rights and
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<PAGE> 7
obligations of each Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor as a party to this Guaranty.
14. Counterparts. This Guaranty may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument. A set of the counterparts of this
Guaranty signed by all the Guarantors shall be lodged with the Administrative
Agent.
15. Severability. Any provision of this Guaranty that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Integration; Loan Document. This Guaranty represents the
agreement of each Guarantor with respect to the subject matter hereof and there
are no promises or representations by the Administrative Agent or any Secured
Creditor relative to the subject matter hereof not reflected herein or, to the
extent expressly referred to herein, in the other Loan Documents. This
Guaranty constitutes a Loan Document.
17. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None
of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the affected Guarantor(s) and the Administrative Agent in accordance with
Section 11.1 of the Liquidity Facility.
(b) Neither the Administrative Agent nor any Secured Creditor
shall by any act (except by a written instrument pursuant to Section 17(a)),
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,
nor any delay in exercising, on the part of the Administrative Agent or any
Secured Creditor, 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 Secured Creditor of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Administrative
Agent or such Secured Creditor would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
18. Section Headings. The Section headings used in this Guaranty are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
19. Successors and Assigns. This Guaranty shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of the
Administrative Agent and the Secured Creditors and
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<PAGE> 8
their successors and assigns, except that no Guarantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the
prior written consent of the Administrative Agent.
20. WAIVER OF JURY TRIAL. EACH GUARANTOR AND THE ADMINISTRATIVE
AGENT (ON ITS BEHALF AND ON BEHALF OF THE SECURED CREDITORS) HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
21. Submission to Jurisdiction; Waivers. Each Guarantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Guaranty or any other Loan Document, or for
recognition and enforcement of any judgement 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 in
care of the Borrower at the Borrower's address referred to in Section 11.2 of
the Liquidity Facility or at such other address of which the Administrative
Agent shall have been notified pursuant to Section 11.2 of the Liquidity
Facility;
(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 Section any special, exemplary, punitive or consequential damages.
22. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 9
IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty
to be duly executed and delivered as of the date first above written.
EVENFLO COMPANY, INC.
ETONIC WORLDWIDE CORPORATION
LISCO, INC.
S&E FINANCE CO., INC.
SPALDING SPORTS CENTERS, INC.
ETONIC LISCO, INC.
LISCO FURNITURE, INC.
LISCO FEEDING, INC.
LISCO SPORTS, INC.
By:_____________________________________
Name: W. Michael Kipphut
Title: Treasurer and Vice President
S&E FINANCE CO., INC.
By:_____________________________________
Name: Paul L. Whiting
Title: President and CEO
ACCEPTED BY:
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION,
as Administrative Agent
By:__________________________
Name:
Title:
<PAGE> 10
ANNEX I to
Guaranty
SUPPLEMENT NO. ___ dated as of _____________ ___, _____
(this "Supplement"), to the Guaranty, dated as of March 30,
1998 (as amended, supplemented, or otherwise modified, from
time to time, the "Guaranty"), among the initial signatories
thereto and each other Person which from time to time
thereafter became a party thereto pursuant to Section 13
thereof (each, individually, a "Guarantor", and, collectively,
the "Guarantors"), in favor of Bank of America National Trust
& Savings Association, as Administrative Agent (in such
capacity, the "Administrative Agent") for the ratable benefit
of the Secured Creditors (as defined in the Guaranty).
W I T N E S S E T H:
WHEREAS, capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Guaranty;
WHEREAS, the Guaranty provides that additional parties may become
Guarantors under the Guaranty by execution and delivery of an instrument in the
form of this Supplement;
WHEREAS, pursuant to the provisions of Section 13 of the Guaranty, the
undersigned is becoming an Additional Guarantor under the Guaranty; and
WHEREAS, the undersigned desires to become a Guarantor under the
Guaranty in order to induce the Lenders to continue to make and maintain Loans
under the Liquidity Facility as consideration therefor;
NOW, THEREFORE, the undersigned agrees, for the benefit of the
Administrative Agent and Secured Creditors, as follows:
1. In accordance with the Guaranty, the undersigned by its signature
below becomes a Guarantor under the Guaranty with the same force and effect as
if it were an original signatory thereto as a Guarantor and the undersigned
hereby (a) agrees to all the terms and provisions of the Guaranty applicable to
it as a Guarantor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Guarantor thereunder are true
and correct on and as of the date hereof. In furtherance of the foregoing,
each reference to a "Guarantor" or an "Additional Guarantor" in the Guaranty
shall be deemed to include the undersigned.
2. The undersigned hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by the undersigned
and the Guaranty constitutes a legal, valid and binding obligation of the
undersigned, enforceable against it in accordance with its terms.
<PAGE> 11
3. In the event any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guaranty shall not in any way be affected or impaired.
4. Without limiting the provisions of the Liquidity Facility (or any
other Loan Document, including the Guaranty), the undersigned agrees to
reimburse the Administrative Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including reasonable attorneys' fees and
expenses of the Administrative Agent.
5. WITHOUT LIMITING THE EFFECT OF SECTION 20 OF THE GUARANTY, THE
UNDERSIGNED AND THE ADMINISTRATIVE AGENT (ON ITS BEHALF AND ON BEHALF OF THE
SECURED CREDITORS) HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS SUPPLEMENT, THE GUARANTY OR
ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
6. Without limiting the effect of Section 21 of the Guaranty, the
undersigned hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Supplement, the Guaranty or any other Loan
Document, or for recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State
of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof.
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to the undersigned in
care of the Borrower at the Borrower's address referred to in Section 11.2 of
the Liquidity Facility or at such other address of which the Administrative
Agent shall have been notified pursuant to Section 11.2 of the Liquidity
Facility;
(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 Section any special, exemplary, punitive or consequential damages.
7. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
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<PAGE> 12
8. This Supplement hereby incorporates by reference the provisions of
the Guaranty, which provisions are deemed to be a part hereof, and this
Supplement shall be deemed to be a part of the Guaranty.
9. This Supplement is a Loan Document executed pursuant to the
Liquidity Facility and the Guaranty.
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<PAGE> 13
IN WITNESS WHEREOF, the undersigned has duly executed this Supplement
to the Supplement as of the day and year first above written.
[NAME OF ADDITIONAL GUARANTOR]
By ______________________________
Name:
Title:
ACCEPTED BY:
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION,
as Administrative Agent
By _______________________________
Name:
Title:
<PAGE> 1
Exhibit 99.1
______________________________________________________________________________
NEWS RELEASE
______________________________________________________________________________
601 S. Harbour Island Boulevard W. Michael Kipphut
P.O. Box 30101 Vice President
Tampa, FL 33630-3101
(813) 204-5200
EVENFLO & SPALDING HOLDINGS CORPORATION
ANNOUNCES SENIOR CREDIT FACILITY
[EVENFLO SPALDING LOGO] AMENDMENT AND ADDITIONAL $25 MILLION
SEASONAL CREDIT FACILITY
TAMPA, FLORIDA, APRIL 1, 1998 -- Evenflo & Spalding Holdings Corporation today
announced that it has reached an agreement with its bank syndicate to amend its
senior credit agreement and to provide Spalding & Evenflo Companies, Inc., a
subsidiary of the Company, with an additional $25 million senior secured credit
facility.
The amendment provides for a modification of financial ratio covenants for
fiscal periods through September 30, 1998, a 25 basis point increase in
interest rates, pledge of stock of subsidiaries, collateralization of certain
domestic assets, an amendment fee, and revisions to certain other provisions.
The $25 million credit facility is available to support the Company's seasonal
working capital needs through August 31, 1998.
Paul L. Whiting, Chief Executive Officer noted, "This agreement gives the
Company the financial flexibility to continue to pursue its growth strategies
at both the Spalding and Evenflo businesses."
Evenflo & Spalding Holdings Corporation is a leading global manufacturer and
licensor of branded consumer products serving the golf, sporting goods, infant
and juvenile product markets under the Spalding, Top-Flite, Hogan, Etonic,
Dudley, Evenflo, Gerry and Snugli brand names.
______________________________________________________________________________
